222 Broadway in the Financial District could be New York City’s next office-to-residential conversion.
GFP Real Estate is under contract to buy a large, nearly empty office tower in Manhattan’s Financial District at a significant discount.
The firm, founded by former Newmark head Jeff Gural, has agreed to buy 222 Broadway, a 31-story office tower, for $150M, The Real Deal reports.
The price is a huge markdown from when the property last changed hands. Deutsche Bank’s asset management arm, DWS, acquired the property in 2014 for $502M, according to property records.
The building’s offices are just 31% occupied. Bank of America had leased the majority of the space but reportedly let its lease expire.
The deal was brokered by a Newmark team of Doug Harmon, Adam Spies, Josh King and Adam Doneger. Newmark declined to comment on the sale, while GFP and DWS didn’t immediately respond to Bisnow’s requests for comment.
The building could be slated for a residential conversion, TRD reports. The property, built in the 1960s and spanning 778K SF, could yield as many as 600 to 800 apartments in a conversion. GFP is reportedly seeking a $200M construction loan to kick-start the process.
An office-to-resi conversion wouldn’t be Gural’s first. GFP is part of the ownership coalition that last spring seized control of the iconic Flatiron Building and plans a conversion of the building to residential condos.
GFP is also working on converting the 1.1M SF office property at 25 Water St., which is expected to become a 1,300-unit residential property owned by a partnership of GFP, Metro Loft Management and Rockwood Capital.
While a conversion would be a boon to the city’s goals of turning obsolete office towers into desperately needed housing, the reported price shows just how far the values of certain properties have fallen.
Selling 222 Broadway at a 70% discount compared to its last sale represents another institution washing its hands of an office asset rather than trying to rehabilitate it. Earlier this year, the Canada Pension Plan Investment Board offloaded a stake in 360 Park Avenue S. to its joint venture partner for $1.