Silberstein Scores Debt on David Werner Conversion Target

David Werner’s loss is Hershy Silberstein’s gain.

The Blue Sky Builders honcho landed $102 million in construction financing for the office-to-residential conversion of 311 West 43rd Street in Hell’s Kitchen, the Commercial Observer reported. S3 Capital provided the debt for the redevelopment of the Press Building.

Silberstein’s involvement in the project wasn’t previously disclosed. Instead, it appeared that one of New York City’s conversion kings, David Werner, would be spearheading the redevelopment.

Werner was in contract to buy the 193,000-square-foot building for slightly more than $40 million, The Real Deal reported in April, about one-third of the $131 million that seller DivcoWest paid for the property in 2018.

But that deal never closed, and Silberstein acquired the property at an undisclosed price, according to S3, which is financing its first office-to-residential conversion.

An Arrow Real Estate Advisors team including Morris Betesh, Israel Mermelstein and Jack McPhail arranged the financing.

Silberstein’s plans call for a 160-unit rental project with 40,000 square feet of commercial space. The developer is expected to tap the 467-m tax abatement program, meaning 25 percent of the units will be designated for those earning an average of 80 percent of the area median income.

A large part of the building was previously leased to WeWork, before the coworking giant allegedly abandoned the location in 2023 and rejected the lease in bankruptcy. Divco sued the firm for $30 million but then dropped the case.

Last year, Silberstein’s firm filed plans for an 11-story mixed-use project with more than 60 apartments and ground-floor retail space at 579 Sackett Street in Gowanus, adding to the growing number of developments in the Brooklyn neighborhood following a 2021 rezoning.

In April, meanwhile, New York-based S3 provided the Eichner family’s Continuum Co. and partner Aksoy Holding with $350 million in financing for a mixed-use district in North Bay Village, a three-island town between Miami and Miami Beach in Florida. The debt package included $261 million for construction and $83 million for predevelopment.

— Holden Walter-Warner