US: Manhattan’s Office-to-Residential Conversions Rise

Continuing the post-pandemic trend, more Manhattan office buildings are set for conversion into residential units, reshaping urban living.

US: Manhattan's Office-to-Residential Conversions Rise

In a continuation of the post-pandemic metamorphosis, an increasing number of office edifices in Manhattan are being earmarked for conversion into residential havens. The latest candidate to enter this burgeoning trend is 77 Water St., a 26-story tower nestled in the Financial District. Reports indicate that the esteemed real estate firm Vanbarton, based in the Big Apple, is poised to transform this structure into approximately 600 rental apartments, as disclosed by sources familiar with the negotiations to Crain’s.

Vanbarton is reportedly under contract to acquire the 1970s-era tower for a sum nearing $95 million, with expectations that the transaction will reach fruition before the calendar year concludes. Historically, the building has housed a plethora of commercial tenants, including corporate giants such as AT&T, Goldman Sachs, and the law firm Lewis Brisbois Bisgaard & Smith. According to data from the real estate management firm VTS, the Water Street property boasts around 546,000 square feet of usable office space, complemented by amenities that include an open plaza adorned with locust trees, a whimsical Wild West-themed candy store within its confines, and a rooftop featuring a striking steel replica of a World War I fighter plane.

The trend of repurposing vacant or underutilized office spaces has gained traction as remote work becomes the new norm for many employees, while the ongoing affordable housing crisis intensifies the demand for residential options. Currently, over 60 office buildings across New York City are in various stages of conversion efforts, with some structures proving more amenable to such transformations than others. Among the more noteworthy cases is the iconic Flatiron Building, a celebrated office tower for which residential conversion plans were submitted just last month, further underscoring the evolving landscape of urban real estate in a post-pandemic world.