Partners Secure $536M for Financial District Tower Conversion

Financing has been arranged for NYC’s largest office-to-apartment conversion, the adaptive reuse of a 22-story, 1,1M SF tower at 25 Water Street in the Financial District in Lower Manhattan.

GFP Real Estate, Metro Loft Management and Rockwood Capital have secured $536M in acquisition and redeveloping financing for the project, which will create nearly 1,300 apartments ranging from studios to four-bedroom units.

Newmark arranged the financing for the project, which was provided by MSD and Apollo.

The 53-year-old tower at 25 Water Street was a suitable candidate for an adaptive reuse conversion from offices to apartments due to its 12-foot ceiling heights, 40K SF floor plates and the fact that three of its four sides are not blocked by other buildings.

The building, which will feature a rooftop terrace after the conversion, is surrounded by plazas and public parks.

During the past 20 years, Metro Loft Management has been the leading office-to-apartment conversion developer in Lower Manhattan, which has seen it residential population surge during the same period.

According to its website, Metro Loft has converted for residential use properties encompassing more than 5M SF in Lower Manhattan, including a former bookbindery at 443 Greenwich Street that was originally built in 1882 and designed by renowned architect Charles Haight; a 24-story tower at 180 Water Street and a 30-story tower at 20 Broad Street that was once the home of the New York Stock Exchange.

Earlier this month, NYC Mayor Eric Adams unveiled “Get Stuff Built,” a comprehensive effort to address New York City’s affordable housing crisis and underlying housing shortage by rapidly accelerating the pace of housing production, with a “moonshot” goal of creating 500,000 new homes over the next decade.

One of the steps outlined in the mayor’s plan is to increase allowable floor area ratios in order to make it easier for commercial-to-residential adaptive reuse conversion projects. As a report in this week’s NY Times makes clear, not all office buildings are suitable for conversion for residential use.

The Times noted that most office buildings are laid out differently from residential spaces. They might have columns every 20 feet, windows that don’t open and too much space from wall to wall.

Office real estate has historically been far more expensive per square foot than apartment, the report said, and in many markets office conversions may be more expensive than new construction.