Flatiron, Mequity to Convert 152 West 36th Street Office Building Into Self-Storage
By Isabelle Durso September 18, 2024 4:01 pm
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Many developers might be gunning for office-to-residential conversions in New York City, but Flatiron Equities and Mequity Companies are taking a different approach.
The two developers plan to convert their recently purchased office building at 152 West 36th Street into a self-storage facility, a spokesperson for Mequity told Commercial Observer. Flatiron and Mequity bought the building for $23.8 million from Falcon Properties, with the deal closing early last week, the spokesperson said.
Flatiron and Mequity hope to convert the eight-story office building into a 16-story self-storage facility operated by Manhattan Mini Storage, and bought additional air rights for the project, according to Colliers (CIGI)’ Zach Redding, who brokered the sale for Falcon along with Dylan Kane. The listed architect on the project is JMN Architecture PC, records show.
“The extremely heavy floor-load capacity, the permitted zoning on this block, the available development rights obtained from the neighboring building, and the ability to double-stack units due to ceiling heights make this office property the perfect candidate for a conversion to self-storage use,” Kane told CO.
The new storage site is set to open in the spring of 2026, with construction funded by a $50 million loan provided by Elsee Partners, according to the Real Deal, which first reported the news. The financing was also brokered by Colliers.
“152 West 36th Street offered potential buyers a unique opportunity to acquire a loft office building with significant air rights and redevelopment potential,” B6 Real Estate Advisors’ Alex Woodlief, who also worked on the sale, told CO. “I suspect we’ll see more activity and interest for similar properties that can offer flexible possession and addition development potential.”
The Class C office building currently at the Garment District site on West 36th Street between Seventh Avenue and Broadway spans 51,853 square feet, according to PropertyShark. Once Flatiron and Mequity’s project is complete, the building will hold 1,500 climate-controlled storage units across 75,000 square feet, according to Colliers.
This isn’t the first time Atlanta-based Mequity has tried out a self-storage development. Last year, it converted a parking garage at 41-47 East 21st Street into a self-storage facility, Colliers said.
Mequity and Flatiron’s latest venture comes amid a post-pandemic trend of investing in the self-storage industry. Compared to other commercial real estate asset classes, self-storage was resilient during COVID-19, when students sent their dorm belongings to storage and offices had to clear out furniture and supplies.
While the pandemic may be past its peak, the popularity of self-storage sites remains. In May, developer Yacov Smouha landed $21.5 million in financing for the acquisition and conversion of a former office and factory building in Tribeca into a self-storage facility, as CO previously reported.
That property at 78 Walker Street is set to be converted into a 30,540-square-foot storage site operated by Public Storage, with completion expected in early 2025, CO reported.
Isabelle Durso can be reached at idurso@commercialobserver.com.
