TF Cornerstone is loading up Manhattan’s next office-to-residential conversion in Midtown, where Charles Cohen once reigned.
The real estate firm signed a ground lease with the Wallace family to take control of 135 East 57th Street, the Commercial Observer reported. Details regarding the ground lease’s structure were not disclosed.
A JLL team including Andrew Scandalios, David Giancola and Drew Isaacson represented the Wallaces in the lease deal.
TF Cornerstone will transform the 32-story office building into a 350-unit residential complex, featuring both market-rate and affordable housing; 25 percent of the units will be for those earning up to 80 percent of the area median income. The property has a “very properly dimensioned floorplate for residential” use, according to principal Jeremy Shell.
The developer plans to tap into the state’s 467m tax exemption program, which helps facilitate the conversion of office buildings to residential properties. TF Cornerstone aims to wrap the project by 2028.
The curved tower on Billionaires’ Row was put on the market last year following a lengthy fight between Cohen and the Wallace clan. William Wallace sued to evict Cohen after he allegedly defaulted on the lease in early 2023 and started skipping out on paying millions of city property taxes.
He also neglected repairs, according to court documents, prompting retail tenant Saks Off Fifth to begin another court action and stop paying rent.
Cohen pushed back on the eviction attempt, laying the blame for his struggles on office vacancies and low demand. He also said Wallace gave an “unreasonable refusal” to a plan to convert the office and retail property into a residential condominium; it’s unclear how Cohen’s conversion would’ve compared to TF Cornerstone’s.
Last year, TF Cornerstone and Dune Real Estate Partners created a $1 billion venture to advance office-to-residential conversions across the country. The former has already completed 15 commercial-to-resi conversions spanning 5 million square feet, including a 318-unit development at 95 Horatio Street in Manhattan’s Meatpacking District.
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