Are people willing to pay luxury prices to live in buildings not far removed from housing office workers? The Vanbarton Group is about to find out.
The developer launched sales this week at Pearl House, an office-to-residential conversion in the Financial District, Bloomberg reported. Construction on the 588-unit project at 160 Water Street is expected to finish by the middle of next year.
The property’s arrival marks a development for Manhattan’s commercial real estate sector, where a push for conversions rose in the wake of the pandemic. Redeveloped office buildings in the last two years have often been cited as one answer two problems — too little housing, too much office space.
Rents for studio apartments at the Pearl House start at $3,500. One-bedroom units are starting at $4,700, while two-bedroom units start at $6,400. Amenities at the property include a bowling alley and a hyperbaric oxygen therapy chamber.
Last year, Vanbarton secured a $272 million construction loan from Brookfield’s lending arm for the conversion of the 24-story, 533,000-square-foot office building. The developer considered selling the property after pitching a $200 million residential conversion before deciding to undertake the effort itself.
The developer in 2017 converted nearby 180 Water Street in a 570-unit building, and in Midtown debuted the 300-unit Hollingsworth at 70 West 37th Street. The company is plotting more conversions, including transforming a former WeWork space at 980 Sixth Avenue into 100 rental units.
Vanbarton, led by Gary Tischler and Richard Coles, purchased the 1970s-era office building in 2014 for $165 million. The largest tenant then was New York City Health and Hospitals Corporation, which has moved to 100 Pearl Street.
Conversions have caught on with real estate observers outside of Manhattan. White House recently announced a plan to facilitate more office-to-residential transformations across the country, putting resources and $35 billion in financing behind the push.
— Holden Walter-Warner