Dune, TF Cornerstone Launch $1B Office-to-Resi Venture

Dune Real Estate Partners and Tom Elghanayan’s TF Cornerstone are joining forces for a vast investment venture.

The firms announced on Tuesday the creation of a $1 billion venture to advance office-to-residential conversions across the country. The firms will source and analyze conversion opportunities on behalf of the venture, Alta Residential.

The partners will provide construction oversight of local developments they invest in, including in New York City. Alta will also team with TF Cornerstone on certain conversions in the Big Apple.

TFC has completed 15 commercial-to-resi conversions spanning 5 million square feet, including the 318-unit development at 95 Horatio Street in Manhattan’s Meatpacking District. The firm recently picked up a waterfront site in Brooklyn’s Greenpoint neighborhood for $175 million, potentially eyeing a residential project.

In addition to New York City, the venture is casting its investment net to Boston, Charlotte, Raleigh, Atlanta, Dallas, San Francisco, Los Angeles and Washington, D.C.

While not specified in the announcement, Alta Residential plans to invest in about 20 projects in the next three years, the Wall Street Journal previously reported.

Dune CEO Dan Neidich said in a statement the venture is already receiving “significant” investor interest. Elghanayan added that the team was confident in its ability to “scale Alta very quickly,” citing the need for new housing and office owners’ evaluations of their properties.

The logic behind office-to-residential conversions is obvious, but the economics of the process are daunting.

But conversions are already up from last year’s total with 73 completed so far in 2024, according to CBRE Group. Another 309 projects are in the pipeline — a majority of them specifically office-to-residential conversions — accounting for 38,000 units in all.

There’s room for more. While conversions in the pipeline span 71 million square feet, that accounts for less than 2 percent of the country’s office inventory, according to CBRE.

Elsewhere, Dune recently fully leased a Canarsie warehouse it co-owns with Turnbridge Equities, only months after the industrial development was completed.