CSC to Convert Midtown Office Tower to Mixed-Use Property
Some of the building's features make it uniquely suited for redevelopment.
CSC has taken out a $45 million senior first-mortgage loan to acquire and redevelop 300 East 42nd Street, an 18-story, 235,000-square-foot office building located in Manhattan’s Midtown East neighborhood. The new owner will convert the office building into a mixed-use property that will include 135 apartments.
Northwind Group originated the loan through its Debt Fund III, a closed-ended, credit-oriented investment vehicle focused on urban developments. The 467-m tax abatement program is also part of the project’s funding, as it incentivizes residential conversions and supports mixed-income housing.
Minimally-difficult redevelopment
This 1964-built property, located at the corner of 42nd Street and 2nd Avenue, will maintain its long-term leased office component, with the residential units coming up in the middle section. The building will also keep its 15,000 square feet of retail space.
A unique facet of the project is that the building has residential-friendly floor plates that won’t require the addition of new lighting and ventilation systems. These are located in the building’s middle section, which was already vacant at the time of sale. The building’s upper and lower floors will remain as office space, hosting a mix of diplomacy-oriented tenants. In addition to residential features, the developer plans to add dedicated lobbies for both the future residents and office tenants.
“(300 East 42nd Street) is ideal for immediate residential conversion, addressing the strong demand in a supply-constrained submarket,” said Ran Eliasaf, founder and managing partner at Northwind Group.
Earlier this month, Bank Hapoalim joined Northwind Group for the initiation of $170 million in construction financing for development the 200 W. 88th St. Nortco Development will lead this luxury condo project, located in Manhattan’s Upper West Side.
Conversion hotspot
Midtown Manhattan has seen a flurry of recent conversion activity, commensurate with New York City having the largest redevelopment pipeline in the nation. A recent report from RentCafe shows that the city has 8,310 conversions underway.
READ ALSO: MHN Asks: Are Office-to-Residential Conversions Taking Flight?
Earlier this month, a joint venture between The Feil Organization, the Nakash Family and private investor Lloyd Goldman closed on a $65 million construction loan to redevelop 140 W. 57th St., a 14-story office building. The property will be converted into luxury condos.
In March, a joint venture between David Werner Real Estate Investment and Metro Loft Management unveiled redevelopment plans for 675 Third Ave., a 32-story office tower that could potentially become a 430-unit apartment building. Northwind also provided a $90 million senior first-mortgage loan for the project.
