David Werner JV Eyes Manhattan Office-to-Resi Conversion
The partners have recently acquired the 32-story building.
The joint venture between David Werner Real Estate Investments and Metro Loft Management has conversion plans for 675 Third Avenue, a 32-story office building in Manhattan it recently acquired. The partners intend to repurpose it into a rental community with some 430 units.
Northwind Group provided a $90 million senior first-mortgage loan for the acquisition and predevelopment of the 342,000-square-foot property previously owned by The Durst Organization. The firm’s Northwind Debt Fund III, which launched this January, originated and structured the financing.
Located at 675 Third Ave. close to Midtown Manhattan, the high-rise is within walking distance of Empire State Building and Rockefeller Center. Central Park is 1 mile away, while JFK International Airport is 15 miles southeast.
Completed in 1966, the building underwent cosmetic improvements in 2014 and was completely renovated two years later. The Class A, LEED Gold-certified tower also comprises more than 10,000 square feet of retail space.
READ ALSO: Where Office-to-Resi Conversions Are Growing Most—and Why
Last year, CommercialEdge developed the Conversion Feasibility Index, a Yardi-powered tool that assesses the possibilities of repurposing office buildings based on multiple criteria, including the property’s age, square footage and building depth, as well as walkability and transit accessibility. The high-rise at 675 Third Ave. scores 92, making it a strong candidate for redevelopment.
The joint venture is also working on the largest office-to-residential conversion in Manhattan: The adaptive reuse of Pfizer’s formal headquarters into more than 1,600 units. Northwind Group provided $135 million in financing for that project, as well as a $75 million first mortgage acquisition loan.
Manhattan’s office-to-residential conversion possibilities
The CFI score puts buildings in one of the following three tiers: Tier I includes scores from 90 to 100 points, Tier II scores range from 75 to 89 points, and Tier III encompasses scores below 75 points, indicating more conversion challenges.
As of April, Manhattan had 906 office buildings totaling approximately 100.2 million square feet classified as Tier I for office-to-residential conversions—the highest figure in the U.S.—according to CommercialEdge. Additionally, 559 properties fell into the Tier II category, suggesting they are suitable for redevelopment, but with potential obstacles.
