Vanbarton Group has secured a $300 million loan from Brookfield to fund the acquisition and conversion of 6 E. 43rd St., a 27-story office tower in Midtown Manhattan into 441 apartments. The privately-owned real estate and investment firm acquired the building, previously owned by the Milstein family’s Emigrant Savings Bank, for $135 million, according to The Real Deal.
The project will be Vanbarton’s latest office-to-conversion redevelopment in New York City.
Construction is set to begin immediately on the project that will transform the existing office building into a 400,000-square-foot residential tower designed by Gensler. Initial occupancy is expected to begin by spring 2027. The building is steps from Grand Central Terminal and Bryant Park, at the center of New York City’s financial, legal and corporate office hub.
Vanbarton is using the 467-m tax program aimed at increasing the city’s stock of affordable housing by offering developers up to 90 percent off on property taxes if they set aside at least 25 percent of the conversion’s units as affordable. In this case, 111 of the project’s future apartments are designated as such.
The developer is also able to take advantage of zoning changes contained in Mayor Eric Adams’ City of Yes housing plan that make it easier for office-to-residential conversions to occur in buildings constructed before 1991 throughout the city, not just in Lower Manhattan. The former Emigrant Savings Bank building was completed in 1968.
Situated between Fifth and Madison avenues, the building is vacant except for its ground-floor retail. T-Squared Social, a 20,000-square-dining and entertainment venue that has entrances on East 42nd and East 43rd streets, is still operating.
Longtime lending relationship
Joey Chilelli, principal at Vanbarton Group, said in prepared remarks that the project enables the firm to bring new high-quality housing to Midtown at a time when supply remains limited. He noted Brookfield has been an integral lending partner on Vanbarton’s office-to-residential conversions and value-add multifamily platforms for more than a decade.
Last year, Brookfield provided a $272.5 million loan to Vanbarton for the conversion of 160 Water St., a 24-story office building in the Financial District, into Pearl House, a 30-story residential property with 588 units. Pearl House launched last year and was 95 percent leased within 12 months.
Other conversion projects
Vanbarton has been one of the leaders in office-to-residential conversion strategies, acting as both a credit provider and developer for more than 10 years. In addition to Pearl House and 6 E. 43rd St., Vanbarton has several conversion projects underway in Manhattan and one in Seattle – 2601 Elliot Ave. Other adaptive reuse developments in New York City include 77 Water St., 1011 First Ave. and the recently completed Quincy at 980 Avenue of the Americas.
READ ALSO: Which Residential Conversions Make Sense?
The firm acquired 1011 First Ave. in July from The Roman Catholic Archdiocese of New York for $103 million with a loan provided by Eldridge Real Estate Capital, the real estate investing strategy of Eldridge Capital Management. The 20-story nearly 400,000-square-foot property had been the Archdiocese’s headquarters since 1973. Vanbarton plans to convert the building into a 26-story, 420-unit luxury residential property that will also include 105 affordable units. The building will also have more than 50,000 square feet of amenities and nearly 8,000 square feet of ground-floor retail space.
Growing NYC strategy
Vanbarton is one of several developers investing in the office-to-residential conversion strategy in Manhattan. There are more than 80 proposals in the city’s Conversion Accelerator program, and new projects are routinely being announced to deal with both the city’s housing shortage and stock of older, outdated office buildings. Developers are taking advantage of lower prices to acquire office buildings for residential conversions.
A new report from Cushman & Wakefield on Manhattan office-to-conversion projects notes that conversions that previously averaged less than 1.2 million square feet annually have grown in recent years. There were 1.6 million square feet in 2023; 3.3 million square feet in 2024 and 4.1 million square feet of conversions as of August with another 8.8 million square feet planned or underway.
The Vanbarton 6 E. 43rd St. building is near 235 E. 42nd St., the former headquarters of Pfizer Inc., which Metro Loft and David Werner Real Estate Investments are planning to convert alongside a connected property at 219 E. 42nd St. into approximately 1,600 apartments. In May, the developers secured $720 million in construction financing from Madison Realty Capital for the project. It is the largest loan for an office-to-residential conversion in New York City to date, and will also be the nation’s biggest conversion project upon completion.
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