Dune, TF Cornerstone Form $1B Office-to-Resi JV
The partnership will target potential conversion projects in major markets from coast to coast.
Dune Real Estate Partners and TF Cornerstone have formed a $1 billion venture aimed at office-to-residential conversions, the companies said on Tuesday. The joint venture, Alta Residential, will aim to capitalize on office distress while adding critical housing throughout the nation.
Alta is set to target locations with high barriers to entry and transit-oriented areas. Markets the venture plans to explore include New York City, Los Angeles, Washington, D.C., Dallas, Boston, San Francisco, Raleigh, Atlanta and Charlotte.
The partnership will assess potential projects as well as providing construction oversight. In New York City, Alta and TFC anticipate working jointly to develop some conversions.
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In prepared remarks, Dune CEO Dan Neidich reported that a wide range of investors have already expressed interest in Alta. Considering the distress in the office market, combined with the nationwide need for housing supply, the joint venture views the opportunity for conversions as on a similar scale to the single-family rental opportunity following the Great Recession.
TF Cornerstone has developed more than 21 million square feet of residential and commercial projects with 15 commercial-to-residential developments under its belt. Dune has raised more than $4 billion of equity capital through its real estate funds to date.
In September, the largest office-to-residential conversion in New York City landed financing. David Werner Real Estate Investments and Metro Loft Management secured $75 million in bridge funds for the conversion of the former Pfizer headquarters. Located in Midtown, two buildings will be converted into luxury multifamily homes.
