BH3 Obtain $208M for Brooklyn Office-to-Residential Project
This conversion comes with an unusual twist.
Capstone Equities and BH3 Fund Advisors have obtained a $208 million construction loan for the office-to-residential conversion of 141 Willoughby Street, a 24-story, 355,000-square-foot office tower in downtown Brooklyn.
Northwind Group, a Manhattan-based real estate private equity firm and debt fund manager, originated the financing.
Loan proceeds retired the existing debt on the property and are funding the creation of 239 rental apartments from floors 8 through 23. The developers are keeping the first through the seventh floors as commercial space, except for amenity space occupying the second floor.
Capstone and BH3 took control of 141 Willoughby in 2025. The property was originally delivered in 2023 to full Class A institutional specs, but has never been occupied. That fact allows the conversion to proceed without the tenant buyouts, deferred maintenance or other structural work.
READ ALSO: Top Marketers: When Development Marketing Starts Before the Project
The property’s configuration and nearly column-free floorplates—roughly 30 feet deep—will allow for a more efficient conversion, according to the developers. Also, slab-to-slab heights of 15 feet to 17 feet will result in finished ceilings measuring out well above those within standard new multifamily construction.
Common-area amenities for the residential space in the lower level and second floor will include a fitness center, an entertainment lounge, coworking space and a wellness center. The amenity floors will also include a golf simulator, sports court, games room and children’s playroom, as well as landscaped terraces on the 10th and 20th floors. The commercial component will operate with its own separate entrances and dedicated elevator bank.
Fogarty Finger, the original design architect for the tower, has been re-engaged as executive architect for the residential conversion. Newmark has been retained to market the commercial space.
Another record year for conversions in the Big Apple
New York remains a hotspot for office-to-residential conversions, with 324.8 million square feet of office space suitable for residential conversion, according to a RentCafe report from earlier this year. Some 16,358 residential units were slated for creation out of former office space in New York at the beginning of this year.
Indeed, the New York metro area leads the nation in office-to-residential conversions, the report notes, with 2025 representing a near doubling of conversion activity in the region compared with the year before. New York happens to have a sizable stock of older office buildings that are convertible—their layouts are easier to adapt for residential use than in many places—as well as strong housing demand.
At the start of 2026, 90,300 apartments were in the process of being created through conversion nationwide. That is up 28 percent from a year earlier, and another record year for office-to-residential projects.
