Watermark Capital Group secured financing for one of Brooklyn’s notable office-to-residential conversions.
Wolfe Landau’s firm scored $125 million in construction financing for the conversion of 175 Pearl Street in Dumbo, the Commercial Observer reported. Bravo Property Trust — an affiliate of Bravo Capital — and Integritas Capital provided the debt, which closed a year after BridgeCity Capital originated a $50.6 million acquisition loan.
Watermark acquired the eight-story, 185,000-square-foot office property last summer from Cannon Hill Capital Partners for $66.5 million. Landau immediately embarked on plans to convert the 1918-built property into a 19-story complex.
Originally, the plans reportedly called for a 14-story, 230,000-square-foot building with 238 rental units. Those plans have since shifted, with Watermark eyeing multifamily units on the eight converted floors and an 11-story condo property atop the rentals.
Critically, the rental portion of the building will qualify for the city’s 467m program, giving Landau a tax abatement for 35 years in exchange for 25 percent of apartments being earmarked for affordable housing. The abatement provides a 65 percent exemption for the first 30 years before falling to 10 percent annually for the last five years of the abatement.
Occupants at the building included Constangy, Brooks, Smith & Prophete, Thelab and coworking company Spaces. But a BridgeCity analyst said at the time of acquisition that all tenants had either departed or were soon to do so.
Amenities are expected to include tenant lounges and a fitness center. Watermark expects to complete the conversion in 2027.
Last summer, Williamsburg-based Watermark submitted a proposal for a residential project on the site of a shuttered church in Greenwood Heights. The 218-unit project requires a zoning change from the district’s light manufacturing zoning status to residential.
In June, the firm paid $15 million for Brooklyn’s Hanson Place Central United Methodist Church in Fort Greene, while in late 2023, Watermark paid $12.3 million for St. Lucy’s-St. Patrick Roman Catholic Church in Bedford-Stuyvesant and demolished it to make room for housing.
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