New York Times



From Offices to Apartments in Lower Manhattan




April 4, 1997, Friday



Leasing has begun at the first two major office buildings being converted to apartments in downtown Manhattan, bringing the vision of turning the area into a 24-hour community one step closer to reality.


Together, the projects are bringing a total of 780 studio to four-bedroom rentals onto the market.


A rental office opened on Tuesday at 45 Wall Street, which is being converted into 435 apartments. The $75 million conversion of the 28-story building, spanning the blockfront on William Street from Wall Street to Exchange Place, is being done by the Rockrose Development Corporation, an experienced Manhattan converter and developer, with Whitehall Street Limited Partnership, an affiliate of Goldman Sachs & Company.


Occupancy is expected to begin sometime in June, said Kevin P. Singleton, vice president and general manager at Rockrose.


Leasing is also under way at the 21-story building at 25 Broad Street at Exchange Place, though the official opening is set for May. It is being turned into 345 apartments at a cost of about $55 million by Crescent Heights Investors, a Miami-based concern that has converted 6,000 units, mostly in South Florida.


Occupancy of the rentals at 25 Broad Street, which marks the company's first foray into Manhattan, will start in August, said Russell W. Galbut, its chief executive officer.


While the projects are the first large-scale conversions ready for leasing, several other conversions are also under way. Since New York City's Lower Manhattan Revitalization Plan was enacted in October 1995, about 2,600 apartments in 17 buildings have been planned and are in various stages of development, according to the Alliance for Downtown New York, the local business improvement district.


Among the incentives that are part of the city's revitalization plan are a 14-year phased tax abatement program for the conversion of office buildings to housing. Zoning changes include reducing the minimum unit size in older buildings to an average of 900 square feet, from 1,800. Projections are that a total of 7,000 units will be created downtown through the year 2002, when the incentives end, said Carl Weisbrod, president of the alliance.


Financing for 45 Wall Street came from the Goldman Sachs Mortgage Company and the partners' own equity. For 25 Broad Street, it came from Ullico, the Washington-based labor union fund in cooperation with CS First Boston.


Both have started leasing at a time when Manhattan's rental market is tight. Because of that, along with offering large apartments at rents that are expected to be 20 percent lower than those in established uptown locations, the projects are likely to draw tenants quickly, brokers said.


The building at 45 Wall Street was built in 1959 as offices for the Atlantic Mutual Insurance Company and U.S. Trust. Last June, Rockrose bought the empty building from the Metropolitan Life Insurance Company, betting, Mr. Singleton said, that “there will be a burgeoning residential neighborhood downtown.” Since then, the company has acquired 127 John Street, which it expects to convert to 576 apartments.


The conversion of 45 Wall Street, now more than 90 percent complete, will result in studio to four-bedroom apartments with 575 to 1,800 square feet on average. Some will have outdoor terraces provided by the natural setbacks of the wedding-cake-style building. Initial rents average $1,390 to $3,200 a month.


Most of the units will be studios and one-bedrooms “for the urban professionals we are targeting and believe will want to live close to where they work,” Mr. Singleton said.


Twenty-five percent of the apartments have been designed as live-work spaces and 20 to 25 percent more will be marketed as corporate rentals. Amenities will include a golf driving range and putting green, a fitness center, two conference rooms and garage parking for 75 cars. There will also be Club 45, where tenants can gather or conduct meetings. Two apartments have already been leased, Mr. Singleton said.


At 25 Broad Street, the Italian Renaissance building that was built in 1897 as the headquarters of Paine Webber, the newly fashioned apartments will be mostly one- to three-bedroom units with luxury finishes and 10- to 15-foot-high ceilings. On average, the apartments will range in size from 800 to 2,400 square feet and initially rent for $1,750 to $4,800 a month.


“Our concept is to give people who could only afford rents of $1,700 to $1,800 the feeling of living in a white-glove building,” said Bruce A. Menin, president of Crescent Heights, the developer. The original marble-clad lobby will be kept intact.


The three-bedroom units have been designed as live-work units and, at this point, “our concept is to have no more than 15 to 20 percent of the units” as corporate rentals, Mr. Menin said. Among the amenities planned are a health club, business center and storage space and laundry rooms on each floor. So far, leases have been signed on eight apartments.

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