The conversion of commercial buildings into housing is gaining momentum once again in New York City. In the 1990s, it was a trend in the Financial District, driven by a surplus of office space following a commercial real estate downturn and aided by tax breaks from New York.
At the forefront this time are developers including Vanbarton Group, Metro Loft and GFP Realty.
Vanbarton is in contract to purchase the office building at 77 Water Street for $95 million, with plans to transform the 542,000-square-foot property into approximately 600 rental units. This follows its transformation of Pearl House at 160 Water Street, where it has launched sales for luxury units. Vanbarton previously converted 180 Water Street into a 570-unit building and is working on transforming a former WeWork space at 980 Sixth Avenue into 100 rental units.
Nathan Berman’s Metro Loft has several projects in the pipeline, including an agreement to convert Pfizer’s former headquarters at 219-235 East 42nd Street in Midtown into roughly 1,500 rentals, which would be the city’s largest office-to-residential conversion. Metro Loft is working with GFP and Rockwood Capital to convert 25 Water Street and is also converting InterVest Capital Partners’ 111 Wall Street.
But Berman is facing challenges with at his completed conversion of 20 Broad Street, where Metro Loft is poised to default on a $250 million mortgage despite 98 percent occupancy of the 533 apartments. The conversion of this 1950s property opened in 2018 but has encountered difficulties from high interest rates, and pandemic rent concessions reduced revenue.
Just getting a conversion to the starting line can be a struggle. It can take years — and tens of millions of dollars in lease buyouts and forsaken rent — to empty an office building of tenants. Sometimes the owner of the ground under a building can balk, as Charles Cohen recently alleged at 135 East 57th Street.
Cohen is pursuing a residential conversion of his office property at 623 Fifth Avenue in Midtown East, where occupancy is down to 12 percent. Cohen Brothers Realty filed an application to transform the upper floors of the 38-story building into 172 condominium units. The conversion is estimated to take 18 months and wrap up in 2026.
In a modest-sized but high-profile project, the Brodsky Organization, GFP Real Estate and Sorgente Group are moving forward with plans to convert the Flatiron Building into 60 condominium units without significantly altering the exterior of the landmark. They aim to finish by 2026.
A TRD analysis identified 26 properties slated for conversion across New York City, with filings submitted between 2020 and 2024.
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1. 219-229 East 42nd Street | The former Pfizer headquarters is being transformed by Metro Loft and architect Gensler into a 29-story mixed-use building with 1,463 rental apartments, marking a major Midtown East residential addition.
2. 25 Water Street | GFP, Metro Loft Management and Rockwood Capital are transforming over 900,000 square feet into 1,200 rental units, marking a major shift from the office building’s former life as a Financial District hub for J.P. Morgan Chase and American Media.
3. 212 Broadway | The Financial District project by TPG and GFP Real Estate is set to feature 798 residential units. The 724,000-square-foot building will be expanded slightly to 740,000.
4. 49 Broad Street | Silverstein Properties and Metro Loft bought the 400,000-square-foot office building for $172.5 million and plan to create 571 market-rate rentals, adding six floors and a rooftop pool, gym, private club and other amenities.
5. 110 Maiden Lane | Joseph Hoffman’s Bushburg is converting the downtown office building to a residential one, spanning 48,946 square feet and is set to include 500 residential units.
6. 330 West 42nd Street | Resolution Real Estate is converting 560,000 square feet of the landmarked McGraw-Hill Building into 224 rental units, from studios to two bedrooms, on floors 12 through 32.
7. 175 Pearl Street | Watermark Capital Group is converting the 185,000-square-foot office building into luxury housing, following its $66.5 million acquisition with $50.6 million in financing from BridgeCity Capital.
8. 830 Third Avenue | Empire Capital Holdings and Namdar Realty Group are converting the 14-story office building into 188 rental apartments, following their $72 million acquisition of the Class-B property originally designed by Skidmore, Owings & Merrill in 1958.
9. 650 First Avenue | Lalezarian Properties quickly moved on its $33.5 million acquisition of 650 1st Avenue, securing approval to transform the eight-story office building into a mixed-use property with 116,000 square feet of housing and 23,000 square feet of commercial space.
10. 1751 Park Avenue | Yitzchok Joseph of 1163 Fulton Realty LLC is breathing new life into East Harlem’s 1751 Park Avenue, expanding the mixed-use building to eight stories with 110 rental units, alongside space for community facilities and manufacturing.
11. 95 Madison Avenue | Sunlight Development is transforming the 16-story landmarked 95 Madison Avenue into a mixed-use commercial-residential building, with interior renovations from the cellar to the 16th floor, and plans for 70 residential units. The property was acquired for $65 million in June after years of bankruptcy and family feuds.
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12. 115 Seventh Avenue | The seven-story building at 115 Seventh Avenue in Chelsea is being transformed into a 12-story mixed-use development, adding residential space above the existing commercial structure. Formerly a Barney’s department store, the 53,624-square-foot building will feature 50 rental units across 38,911 square feet, with 14,713 square feet designated for commercial use.
13. 181 North 11th Street | Yitzchok Schwartz is transforming a 42,963-square-foot office building at 181 North 11th Street in North Williamsburg into a residential development featuring 44 units across five stories.
14. 245 West 55th Street | Madigan Development is converting a 12-story Midtown property into a 17-story residential building that will feature 42 units within a total area of 85,378 square feet.
15. 131-10 Avery Avenue | The Avery Group is converting this Flushing building, formerly a medical facility, to include 37 residential units spread across seven stories, with 12,000 square feet of living space, as well as dedicated office space across 7 to 19 stories.
16. 1713 Eighth Avenue | Lipa Engel plans to convert his three-story creative co-working space at the edge of Park Slope and Windsor Terrace into a residential building of 29 units.
17. 428 East 149th Street | This three-story Bronx building will be converted into 24 residential units.
18. 179 North 10th Street | KSK Construction Group is converting a two-story commercial property in Williamsburg into a six-story residential building with a total area of 38,795 square feet. The company is currently under FBI scrutiny in connection with an investigation into Mayor Eric Adams’ fundraising and has faced over $400,000 in fines for building safety violations since 2004, The New York Post reported.
19. 114 East 25th Street | Adellco Management is converting its 12-story, 48,000-square-foot office building in Kips Bay into a mixed-use residential structure.
20. 3 Bleecker Street | The owner is creating 15 residential units across six stories, spanning 44,000 square feet, at its NoHo project.
21. 711 Fifth Avenue | Nightingale Properties and Wafra Capital Partners’ property will soon feature 11 residential units on the 14th floor of the 17-story, 300,000-square-foot building. The project includes a partial residential conversion of the 14th floor, with the 15th floor designated for marketing. The owners purchased the building in 2019 from Coca-Cola for $909 million, with a subsequent valuation of $937 million following a stake sale by Wafra.
22. 67 Irving Place | CIM Group’s Gramercy Park project plan, filed in June 2023, is expected to feature 11 residential units within a total area of 49,000 square feet.
23. 147 East 26th Street | In Kips Bay, the owner of this 19,000-square-foot building plans to carve out 10 apartments and convert the cellar from accessory storage to office space. The conversion filing was submitted in 2021.
24. 248 West 35th Street | Kechek Realty’s Garment District project proposes eight apartments, spanning 6,165 square feet and rising to 16 stories.
25. 38-01 23rd Avenue | At this 49,000-square foot Astoria office building, six residential units across four stories and 6,000 square feet of residential space are planned.
26. 87-46 Van Wyck Expressway | 87-46 Van Wyck Expressway | Baichu and Associates plans to add eight residential units across four stories and 6,000 square feet at its Queens project.