NEW YORK – (Realty News Report) – The largest ever office-to-residential conversion project in the United States is underway – the transformation of a 1.1 million SF skyscraper into 1,300 apartments.
Financing has been secured for the project, which is called 25 Water Street, Newmark reported.
Newmark arranged a $535.8 million loan on behalf of GFP Real Estate, Metro Loft Management and Rockwood Capital for the acquisition and redevelopment of 25 Water Street.
“This transaction represents the largest ever office-to-residential conversion in the United States,” a Newmark press release said.
National Trend Takes Root
With office vacancies high and the inventory of housing low, the trend to convert office buildings to residential is taking off across the nation.
Some experts have pooh-poohed the significance of the impact of the conversion trend on the office market.
But when 1.1 million SF of office space is taken out of inventory, the office-to-residential conversion trend cannot be dismissed as insignificant.
Hines Converting Tower in Salt Lake City
Hines – the Houston-based developer with 200 projects now under development around the world – has taken notice of the trend. Earlier this year, Hines acquired the 24-story South Temple Tower in downtown Salt Lake City for its first residential redo. The 217,000-SF building will become 255 upscale rental homes.
Dougal Cameron Tackles The Espersons in Houston
In downtown Houston, the adjacent Niels and Mellie Esperson buildings, 1927 and 1941 respectively, are slated to become “a vertical entrepreneurial village,” said Dougal Cameron, president of Cameron Management. Plans for the combined 600,000 SF of space include a mix of 100,000 SF of residential — with its related amenities – atop 400,000 SF of office and another 100,000 SF for more flexible uses, such as co-working or even start-ups. The ornate building is located at 808 Travis Street at Walker Street. When it was completed decades ago, it was the tallest building in Houston and called the tallest building west of the Mississippi River. The Esperson is adorned with columns, urns and terraces.
In another downtown Houston conversion, the 1801 Smith building will soon be 321 apartment units. The building was acquired last year for $20.6 million.
Barry Sternlicht’s Houston Redo
In Houston’s Galleria/Tanglewood area, a group led by billionaire Barry Sternlicht is evaluating the prospects for added residential to its 5555 San Felipe tower. The 41-story, 1.2 million-SF office tower is about 30 percent leased, leaving plenty of room for living units. The 5555 San Felipe tower was formerly the home of Marathon Oil.
San Antonio Tower Life to be Converted by Ed Cross
In San Antonio, Ed Cross of Cross & Co. is a partner in the 1927 Tower Life building, a 31-story office tower located on the River Walk he called “the original mixed use of its era.” Plans incorporate 234 housing units, an amenity deck with River Walk views, and 150,000 square feet of retail in space long-walled off at street level.
Why NYC’s 25 Water Street is Redo Candidate (40,000 SF Floor Plates)
Upon redevelopment, the 25 Water Street tower in New York, will be refitted to feature 1,300 residential units ranging from studios to four-bedrooms. The property’s 12’4″ slab-to-slab ceiling heights and expansive 40,330-SF floor plates provide an attractive canvas for residential conversion.
Fitness amenities are expected to include a basketball court, a steam room/sauna, indoor and outdoor pools and sports simulators. Lifestyle amenities are expected to include an expansive sky lounge and landscaped outdoor rooftop terrace and multiple entertainment and coworking spaces.
The residential conversion of 25 Water Street will be executed by a team led by GFP in collaboration with Metro Loft Management. GFP has recently acquired and redeveloped 13 properties comprising $2.2 billion invested into 3.9 million square feet and recently completed a $550 million renovation of David Geffen Hall at Lincoln Center for the Performing Arts. Metro Loft Management has a market-leading track record of conversions in lower Manhattan, including over five million SF over the past 20 years.
The Newmark team was led by Vice-Chairmen and Co-Heads of the Debt & Structured Finance team Dustin Stolly and Jordan Roeschlaub and Senior Managing Director Chris Kramer. MSD and Apollo provided the loan.
Built in 1969
Built in 1969, 25 Water Street enjoys uninterrupted light and air on three sides, offering broad views of lower Manhattan and New York Harbor from all floors. The property is situated on a double-wide street corridor with the widest exposure fronting Water Street protected by the property’s own broad plaza, the low-rise Fraunces Tavern historic district and Coenties Slip park directly across Water Street.
The property is also surrounded by two acres of plazas and public parks. A dozen subway lines are near the property.
Lower Manhattan has transformed into a 24/7 neighborhood. The 2020 census revealed a residential population that is 33 percent higher than in 2010 and a massive four-fold increase from 2000. It is now the fastest-growing neighborhood in Manhattan.
Dec. 29, 2022
THE RALPH BIVINS PROJECT PODCAST
Rendering Courtesy of courtesy of CetraRuddy.
File: Skyscraper Becoming 1300 Apartments
File: GFP Real Estate, Metro Loft Management and Rockwood Capital. Skyscraper Becoming 1300 Apartments