Whether to tear down old office towers or convert them into multi-family residential structures involves a lot of consideration—including real estate values and zoning codes—and it's important to note that some towers are not structurally supportive for conversion.
Developers have hired engineers to examine old towers across Manhattan and other boroughs to carefully determine which ones are the least expensive to convert office floors into apartments.
A 24-story office tower at 655 Madison Ave. was slated for demolition months ago as Manhattan's skyline was about to lose another historic mid-century building. This was halted after one of Manhattan's top developers, Extell, known for kickstarting the "Billionaires' Row" towers near Central Park, bought the 310-foot-tall, 200,000-square-foot structure for $160 million, according to Bloomberg, citing public records documents.
People familiar with the matter told the financial publication that Tyko Capital, which Elliott Investment Management backs, provided Extell with financing for the acquisition of the tower.
Other developers are moving in on NYC towers for conversions:
Last week, developer Vanbarton Group agreed to buy the Archdiocese of New York's headquarters building on First Avenue, with plans to convert it into rental housing. That followed a deal in September to purchase a financial district tower for a similar office-to-housing project. -BBG
Hybrid and remote working options have changed the landscape of work forever. This has left parts of the borough with massive gluts of towers - some of which are half abandoned.
The Kastle 'Back to Work Barometer' index of NYC shows that the office tower vacancy rate has been hovering at 50% since the end of 2022.
The glut of towers sent the price of a one-million-square-foot Manhattan tower, once owned by UBS, crashing 97% from the $332.5 million valuation when the bank bought the building in 2006.
At the start of the year, Goldman analyst Jan Hatzius told clients that office tower prices had to move much lower to make financial sense for conversions.
We spoke with the head of one notable property management firm in the Baltimore-DC metro area on Monday, who pointed out that some towers can't even be given away due to high conversion costs. Let's not forget that regional banks hold the bulk of tower debt.
Whether to tear down old office towers or convert them into multi-family residential structures involves a lot of consideration—including real estate values and zoning codes—and it's important to note that some towers are not structurally supportive for conversion.
Developers have hired engineers to examine old towers across Manhattan and other boroughs to carefully determine which ones are the least expensive to convert office floors into apartments.
A 24-story office tower at 655 Madison Ave. was slated for demolition months ago as Manhattan's skyline was about to lose another historic mid-century building. This was halted after one of Manhattan's top developers, Extell, known for kickstarting the "Billionaires' Row" towers near Central Park, bought the 310-foot-tall, 200,000-square-foot structure for $160 million, according to Bloomberg, citing public records documents.
People familiar with the matter told the financial publication that Tyko Capital, which Elliott Investment Management backs, provided Extell with financing for the acquisition of the tower.
Other developers are moving in on NYC towers for conversions:
Last week, developer Vanbarton Group agreed to buy the Archdiocese of New York's headquarters building on First Avenue, with plans to convert it into rental housing. That followed a deal in September to purchase a financial district tower for a similar office-to-housing project. -BBG
Hybrid and remote working options have changed the landscape of work forever. This has left parts of the borough with massive gluts of towers - some of which are half abandoned.
The Kastle 'Back to Work Barometer' index of NYC shows that the office tower vacancy rate has been hovering at 50% since the end of 2022.
The glut of towers sent the price of a one-million-square-foot Manhattan tower, once owned by UBS, crashing 97% from the $332.5 million valuation when the bank bought the building in 2006.
At the start of the year, Goldman analyst Jan Hatzius told clients that office tower prices had to move much lower to make financial sense for conversions.
We spoke with the head of one notable property management firm in the Baltimore-DC metro area on Monday, who pointed out that some towers can't even be given away due to high conversion costs. Let's not forget that regional banks hold the bulk of tower debt.