Rockrose Secures $230M Refi for Financial District Tower

Rockrose Development has secured a $230M refinancing of 200 Water Street, a 430K, 576-unit multifamily tower in Manhattan’s Financial District.

Equitable Financial Life Insurance will provide a 10-year, fixed-rate loan for the 32-story tower. Avison Young arranged the financial package.

Rockrose began a renovation of the property two years ago, including remodeled apartments and a new lobby. When occupancy in the building dropped to 75% during the pandemic, the company turned to Equitable for a $150M a short-term, floating-rate loan to finance the renovation project.

The Water Street tower, opposite the South Street Seaport on New York’s East Side a block north of Wall Street, was acquired by Rockrose in 1996 as an office building.

The 32-story building was built in 1971 by the William Kaufman Organization. The tower featured a unique, sleek design that included a Water Street entrance accessed through a large, corrugated steel, neon-lit tunnel, and a Fulton Street entrance that was decorated with cascading canvas.

The digital clock at the building’s base on Water Street was the world’s largest at the time, quickly becoming a local landmark, along with a full-size sculpture of a WWI-vintage Sopwith Camel fighter plane—the aircraft that Snoopy made famous in the Charley Brown comic strips—on an Astroturf runway that included a windsock.

Other unique features included a wooden-front general store fronting on a meandering stream lined with day-glo love seats with plastic backs that formed giant tiddly-wings.

In 1997, after NYC zoning laws were changed to facilitate residential buildings in the area, Rockrose converted the Water Street tower into apartments. According to the New York Times, the $80M conversion was the first in NYC in which a modern office tower was converted to apartments.

Until 2009, the building was used as a student dormitory for New York University, with the students giving the tower the nickname “NYU at the Seaport.” In 2009, Rockrose converted the facility to rental apartments.

Conversions of Financial District office buildings into apartments accelerated after 9/11, with many developers make use of NYC’s 421a tax abatement, which expired at the end of June 2022.

The 421 tax provision, first enacted 51 years ago, offered a property tax exemption for housing projects in NYC that include a percentage of units designated for lower-income residents. According to a study by NYU’s Furman Center, nearly 70% of rental housing built in the past decade in NYC used the tax abatement.

The expiration of 421 forced multifamily developers in the city to scramble to install a project’s foundation before June 15 in order to be eligible for the property tax exemption, which also required that the project complete construction before June 15, 2026, GlobeSt.com reported.

The 421 abatement was widely credited with spurring a wave of office-to-residential conversions in Lower Manhattan in the wake of 9/11.