Nathan Berman

The word “conversion” is on many real estate professionals’ lips as they look at a tough office market. But Nathan Berman has been thinking about it much, much longer.

Last year found Berman’s Metro Loft, which has specialized in office-to-residential conversions for over two decades, going into contract on the 1.1 million-square-foot building at 25 Water Street in Manhattan. 

A joint venture with GFP Real Estate and Rockwood Capital, 25 Water will add 10 stories to its existing 22 to offer more than 1,300 apartments with over 80,000 square feet of amenities. Berman notes that his vast experience with conversions was essential to making this project happen.

“To someone that hasn’t done conversions, this would essentially be impossible to convert,” said Berman. “The building is 175 feet wide by 275 feet long, with only two sides of legal light and air. That description alone should suggest that this is a football field too deep to do anything with.”

The solution was to add two separate courtyards as amenities in the building’s center, something Berman has experience with from a similar arrangement with one courtyard for an earlier project at 180 Water Street.

Metro Loft also went into contract last year, in a partnership with Silverstein Properties, on a conversion at 55 Broad Street. Slated to close later this month, the building will feature 571 residential rental units with a rooftop pool in a building geared toward younger professionals.

“It’s going to be an emissions-free, fully electric building — one of the first among conversions,” said Berman. “We will eliminate cooling towers and boiler plants. Apartments will have individual hot water heaters with their electric HVAC units. It’s a product that should be completed within the next two and a half years.”

Berman is currently exploring roughly a dozen additional potential projects. While Metro Loft has traditionally worked on one project at a time, moving forward Berman says he hopes to have several in the works concurrently

While Berman believes conversions won’t be enough to solve New York City’s housing crisis, he’s as bullish on them as anyone, believing they are currently the best option to make additions to much-needed housing supply.

Office-to-residential conversions are “the only viable path today to delivering market-rate units, because with construction costs, land costs and the interest rate environment, ground-up construction without any tax abatements doesn’t pencil,” said Berman. “It’s going to be primarily conversions that will add to the market-rate stock. I think it will be in the thousands in the next couple of years.”