Another of Lower Manhattan’s office buildings could be headed for a residential conversion.
The last office tenants at 160 Water Street, a 1970s-era office building in the Financial District, will be vacating the 24-story property at the start of October. And with the nearly 500,000-square-foot building about to be empty, owner Vanbarton Group is looking to sell the glass-and-steel property, pitching it as a potential residential conversion.
Vanbarton, headed by managing partners Gary Tischler and Richard Coles, is aiming to get about $200 million for the building, sources familiar with the offering said. It might cost another $200 million to convert the building into roughly 600 apartments.
A representative for Vanbarton Group could not be immediately reached. A Cushman & Wakefield team led by Adam Spies and Adam Doneger is marketing the property.
Office-to-residential conversions are nothing new, particularly in the Financial District, but have received more attention since the pandemic emptied out much of New York City’s office space.
The Real Estate Board of New York in December identified 210 million square feet of office space in the five boroughs that could be converted into housing.
Then-Gov. Andrew Cuomo took up the idea in his State of the State address in January, proposing to relax zoning regulations for developers who agreed to set aside 25 percent of housing as affordable.
The levels of distress that would have made large-scale conversion more economically attractive, though, never really hit New York’s real estate market and the idea appears to have lost some steam. Democratic Mayoral candidate Eric Adams, however, recently threw his support behind an idea to convert struggling hotels into supportive housing for the homeless.
A conversion on 160 Water Street, however, could be done as-of-right and would not require that any units be set aside as income-restricted housing.
That will leave 160 Water as a blank canvas for conversion. The building has some attractive qualities: It’s got light and air on three sides and relatively small floor plates, meaning a new owner could avoid the expensive process of cutting an atrium into the core of the building to create legal apartments. (Every bedroom must have a window, for example.)
One name almost certain to look at 160 Water Street is Nathan Berman of Metro Loft Management, who has converted more office buildings in the Financial District into apartments than any other developer in the city.
In fact, Berman teamed up with Vanbarton next door at 180 Water Street, which they bought in 2013 for $151 million and converted to 574 apartments four years later.
Across the street, Berman paid $270 million in 2019 to buy the former headquarters of housing crash villain AIG at 175 Water Street, which it recently converted to residential.