Silverstein scores $165M to build Astoria apartment building
Office tenant sues to stop 55 Broad resi conversion
Silverstein, Metro Loft plan 571-unit project at Financial District office property
One would think a residential real estate firm would support two of New York City’s biggest developers teaming up to convert a Financial District office building.
But it appears the pitch for a new multifamily property lands differently when it comes at the expense of your own office.
Allen London’s Solstice Residential Group filed a lawsuit Wednesday to stop Silverstein Properties and Metro Loft Management’s office-to-residential conversion of 55 Broad Street, claiming it would be a violation of the firm’s lease and “extremely disruptive and dangerous” to the company.
The complaint also names Rudin Management Company, who Solstice claims knew about Silverstein and Metro Loft’s plans when Bill Rudin’s firm agreed to sell the Lower Manhattan office building to the developers last May.
Silverstein and Metro Loft unveiled plans last summer to convert the office building into a 571-unit residential property, with work expected to begin soon and continue for at least two years.
The company said it “never imagined, and would never have countenanced, moving into a residential apartment building for the conduct of its business.”
Solstice moved its office from 257 Park Avenue South in the Flatiron District to Rudin’s 30-story, 425,000-square-foot property in 2019 because it was a “first class office building.” The residential firm inked a 10-year lease for 11,000 square feet on the building’s 26th floor.
Building rules outlined in the firm’s lease stated that no tenant could use its space for residential purposes, and Solstice and Rudin reached an agreement that the landlord would not seek to redevelop the office property for an alternative use before the company’s lease expired in September 2029, according to the complaint.
The only way in which the landlord could move forward with redeveloping the property would be if it invoked a demolition clause, which would require it to terminate Solstice’s lease.
But Solstice accused Silverstein and Metro Loft of trying to circumvent the firm’s lease by going forward with their office-to-resi conversion play without invoking such a clause. The tenant claims the conversion would harm Solstice’s ability to conduct business and “severely disrupt” its right to occupy its office.
“All our planned landlord renovation work will be undertaken in accordance with applicable law and lease terms,” a spokesperson for Silverstein said. “We are working closely with the building’s tenants to ensure a smooth move, in some cases to other office buildings we own.”
Solstice also claimed that asbestos removal at the property “would cause an imminently hazardous condition that would jeopardize the life, health and safety” of employees and visitors. The firm is now asking the court to stop the conversion before its lease expires in six years.
Metro Loft, Rudin and Solstice did not immediately respond when reached for comment.
The office building, commonly known as the New York Technology Center, was developed and owned by Rudin for more than 50 years before it sold to Silverstein and Metro Loft last year for $180 million. The closing deadline was extended in the fall and the deal is slated to close in the first quarter.