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NYC Financial District Office Tower Will Convert to Apartments

Two New York developers who have acquired an aging office tower in NYC’s financial district have revealed their plans to convert the 30-story building into 571 market-rate apartment units.

A joint venture of Silverstein Properties and Metro Loft agreed in May to purchase 55 Broad Street, which opened in 1967, for $180M from Rudin Management.

Recently, the partnership said the building will be converted to apartments during the next three years, making it the largest office-to-apartment adaptive reuse project in NYC thus far this year.

According to a report in The Wall Street Journal, a third of the office space at 55 Broad currently is empty. Tenants in the building are primarily financial services and tech firms.

The conversion to apartments is “the right evolution of these struggling, underperforming older office assets that are approaching their obsolescence,” Nathan Berman, Metro Loft founder and managing principal, told WSJ.

Silverstein and Metro Loft are planning to convert the 425K SF 55 Broad building into apartments ranging from studios to three-bedroom units.

When the Rudin family developed 55 Broad, it was planned as the headquarters for Goldman Sachs, but the investment bank moved out in 1983. The building was renovated in 2019, including a new lobby.

Office occupancy rates in NYC have been hovering around 42% for the past three months, according to Kastle’s Back to Work Barometer, which tracks entry-card swipes in 10 cities. 

As businesses embrace hybrid work strategies, many are reducing their office footprints and choosing to migrate into newer buildings with more amenities.

Older buildings are becoming candidates for adaptive reuse, and not only because they’re having trouble keeping their office space filled. Structures that were built before the 1970s tend to be more suitable for conversion to apartments because of their floor plans and the amount of natural light they let in.

Modern office buildings—those that are less than 50 years old—tend to have large floors that are not conducive to residential space. Converting newer office buildings to apartments in many cases would require the installation of windows, increasing the cost of an adaptive reuse project.

Office conversions to apartments created a total of more than 13,000 apartment units in 2020 and 2021, according to RentCafe. That total is expected to increase substantially in 2022 as hybrid work patterns take hold.
Reprinted with permission from the Mon, 27 Jun 2022 06:38:12 EDT online edition of GlobeSt © 2022 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-256-2472 or reprints@alm.com.