Vanbarton Seals Loan For Latest Office-To-Resi Conversion

Vanbarton Group locked in a large loan from Brookfield to close a Midtown office deal, marking the developer’s latest office-to-residential play.

Brookfield provided a $300 million loan to finance Vanbarton’s $135 million purchase of 6 East 43rd Street from the Milstein family’s Emigrant Savings Bank. The loan will also be used for Vanbarton’s conversion of the 400,000-square-foot building to 441 rental apartments, including 111 affordable units.

Vanbarton will take advantage of a tax break ushered in by Gov. Kathy Hochul, known as 467m. Developers who set aside 25 percent of a conversion’s units as affordable to those making 80 percent of the area median income can nab a 90 percent off coupon on property taxes under the abatement.

The conversion of the 1968 building is possible thanks to last year’s City of Yes for Housing Opportunity. Before the City Council approved Mayor Eric Adams’ signature housing policy, buildings constructed after 1961, apart from those in Lower Manhattan, were ineligible for conversion. Now, anything that went up before 1991 is fair game.

Skyline Properties’ Robert Khodadadian, Daniel Shirazi and Daniel Davidov represented Vanbarton in the deal. Eastdil Secured represented the Milstein family.

Vanbarton, led by Gary Tischler and Richard Coles, has been doing conversions for more than two decades, and its appetite shows no signs of slowing. It’s the third office building Vanbarton’s bought in the past year as bargains in the office market and demand for new apartments have led to a boom in conversion opportunities.

The developer is paying roughly $100 million to buy the home of the Archdiocese of New York at 1011 First Avenue, which it plans to transform into 420 apartments. And in December, it bought 77 Water Street in the Financial District for $95 million, which will turn into 600 units.