Midtown’s office-to-residential conversion boom continues. Developer Vanbarton Group announced last week it had acquired the building at 6 East 43rd Street after securing a $300 million loan from Brookfield. Vanbarton plans to convert the 27-story tower, known as the Emigrant Savings Bank building, into 441 apartments, including 111 affordable units.
The affordable apartments will be made possible through the 467-m program, which provides developers a tax exemption on conversion projects if 25 percent of the units are designated affordable.
Vanbarton paid about $140 million for the property. The $300 million loan from Brookfield will finance the acquisition and redevelopment of the property, which will convert the existing office building into a 400,000-square-foot residential tower designed by Gensler.
The property is on a convenient Midtown block, located close to Grand Central Terminal and Bryant Park.
The East 43rd Street office building is the third Vanbarton has purchased in the last year, according to the Real Deal. The developer has joined the wave of office-to-residential conversions underway in the city, with 160 Water Street, which opened last year, 77 Water Street, which will become 600 apartments, and 1011 First Avenue, the former headquarters for the Roman Catholic Archdiocese of New York that will become 420 homes.
“6 East 43rd Street represents a significant opportunity to bring new housing to Midtown at a time when supply remains extremely limited,” Joey Chilelli, principal at Vanbarton Group, said. “We are focused on delivering residences that combine high-quality design with amenities that enhance the daily lives of the residents.”
“Brookfield has been an integral lending partner on our office-to-residential conversions and value-add multifamily platforms for more than a decade, and we are excited to add another transformative project to our long history of working together.”
The project is the latest office conversion planned for Midtown. According to Bloomberg, out of the 12.4 million square feet of conversions proposed or underway in Manhattan as of last month, half are located in Midtown.
That’s largely because City of Yes for Housing Opportunity, passed by the City Council last year, changed the cut-off date of eligibility for office conversions from 1961 in Midtown or 1977 in the Financial District to 1991. Without the change in zoning rules, the Emigrant Savings Bank, which was built in 1968, would not have been able to be converted.
Plus, the state lifted the 12 floor-area-ratio (FAR) cap, allowing residential buildings up to 15 to 18 times their lot size while requiring affordable housing.
Conversion projects in Midtown include the Pfizer headquarters on East 42nd Street, 750 Third Avenue, 675 Third Avenue, and 767 Third Avenue.
This first surge of conversions could yield over 17,000 apartments citywide, a report by Comptroller Brad Lander found.
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