Goldman’s Former Broad Street Tower Eyed for Housing Conversion

(Bloomberg)—Manhattan developers have found another potential office to convert to residences: the former Goldman Sachs Group Inc. headquarters at 85 Broad St.

Fortress Investment Group and Metro Loft Management are nearing a deal to acquire a stake in the 30-story Financial District building, with plans to redevelop it into housing, according to people familiar with the matter.

Landlord Ivanhoe Cambridge, the real estate unit of Caisse de Dépôt et Placement du Québec, will maintain an ownership interest, the people said, asking not to be named because the discussions are private. Talks are ongoing and no deal is finalized.

Goldman Sachs, which no longer has ties to 85 Broad St., built the 1.1-million square-foot (102,000-square-meter) tower in the 1980s, and it served as the bank’s headquarters until 2009, when it began moving to its current spot at 200 West St. The building had a vacancy rate of roughly 20% earlier this year, and counts WeWork Inc. and Oppenheimer Holdings Inc. as major tenants.

Spokespeople for Ivanhoe Cambridge and Metro Loft declined to comment, while a Fortress representative didn’t immediately respond to messages seeking comment.

With many older office towers sitting largely empty or facing mounting costs for renovations, landlords including SL Green Realty Corp. to Silverstein Properties have been exploring opportunities to convert the properties into residences. Silverstein is raising $1.5 billion to kick-start a platform focused solely on office conversions, Bloomberg reported last week.

As of the third quarter, about 28% of the office space in the Financial District was available, above Manhattan’s overall average of 18%, according to Savills Research. Many offices in lower Manhattan had been converted to rental apartments or condominiums following the 2001 terrorist attacks. One of the latest projects and largest conversions in the area is One Wall Street, developed by Macklowe Properties.

Metro Loft has been a prolific developer of residential conversions. Earlier this year, it agreed to buy Rudin Management Co.’s 55 Broad St. alongside developer Silverstein Properties. Goldman Sachs had previously been a tenant at 55 Broad, before its 85 Broad tower was built.

Metro Loft is also in contract to buy 25 Water St., formerly known as 4 New York Plaza, with its partners, in a plan to turn the building into housing units.

To contact the author of this story: Natalie Wong in New York at [email protected]

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