Behind The 'Battle' To Complete The Country’s Largest Office-To-Residential Conversion

New Yorkers could be forgiven for thinking that there’s a new building at the southernmost tip of Manhattan.

The tower at 25 Water St. is 10 floors taller than it used to be. For decades, it housed supercomputers and a back office for JPMorgan Chase, its red brick design with tiny slivers for windows — intended to evoke an IBM punch card — loomed over the Financial District.

But in its new life, the white brick building houses 1,320 luxury apartments, two new light wells carved out from its core and 100K SF of amenities like pickleball courts and two pools. When the first residents moved in on Feb. 17, it officially became the largest office-to-residential conversion in U.S. history.

“This is a big building,” John Cetra, founding principal of CetraRuddy and the building's architect, told Bisnow during a tour of the property this week. “It's bigger than some cities and towns.”

GFP Real Estate, Metro Loft Management and Rockwood Capital teamed up to buy 25 Water St. for $251M in 2022 with a plan to turn the then-22-story office into housing. The trio convinced MSD Partners and Apollo Commercial Real Estate Finance to lend them $536M for the acquisition and the conversion of the 50-year-old, 1M SF office building.

“That project scared me, even though we made the loan,” BDT & MSD Partners principal Ross Baldwin said last week at a Bisnow event.

But the result was a 32-story tower that added more than a thousand units to Manhattan’s housing supply, named SoMA as an abbreviation of its Southern Manhattan location. 

“It was so much bigger than just the Financial District or just Battery Park or just the Seaport,” said Sarah Patton, co-head of Compass’s New York new development business, which leads marketing and leasing for SoMA. “It was really about the combination of connecting to all three of those neighborhoods.”

Leasing began on Jan. 29, with market rents starting at $3,595 for studio apartments and reaching $10K for three-bedroom units. While the developers declined to provide initial leasing numbers, a spokesperson said they have been “incredibly pleased with the response from the market to date.”

The owners opted into the state’s 467-m tax abatement toward the tail end of construction, agreeing to reserve 330 units as affordable housing in perpetuity for residents making up to 40%, 80% and 90% of the area median income. In exchange, the building gets a 90% tax break for 35 years. 

“Having a 35-year abatement, where you know that your taxes will not go up more than a certain amount each year, it gives a lot of people comfort that are investing into this project,” said Brian Steinwurtzel, co-CEO of GFP. “So that was worth more than the cost of creating the affordable housing.”

The subsidized tenants and higher-income renters have use of 100K SF of tenant amenities accommodated by hollowing out what used to be an employee cafeteria and mechanical rooms in the building’s basement.

They're not quite ready for tenants to use yet, but there’s now a spa featuring a Himalayan salt room, an infrared sauna and a by-appointment-only nail salon, and community-focused amenities like bowling lanes and an indoor swimming pool. A rooftop terrace features an outdoor pool. 

“The idea of dedicating 100K SF to spaces that people will share — I think it's a pretty awesome thing to do,” Cetra said.

Photos by Ciara Long for Bisnow. Renderings of amenities courtesy of StreetSense.

The scale of 25 Water’s two-year transformation meant that it was unlike anything GFP or CetraRuddy had tackled before. CetraRuddy had worked on other residential conversions in Lower Manhattan, but none of the previous projects had such deep floor plates. It took a year to plan, had a 30,000-line-item schedule and involved an estimated 1,000 professionals, including 700 construction workers on-site.

“It is a feat. It's a battle,” Cetra said. “You have to be prepared, you have to be organized, and you have to have strategy.”

One of the biggest challenges was adding an extra 10 stories on top of the building to make up for the space that was lost when the developers carved out two light wells in the building’s core. The developers had to get structural engineers to add extra bracing throughout the building’s exterior and behind its facade to support the extra weight. 

“We didn't have to touch the foundations, because especially downtown, nobody wants to go below the existing foundation because there's water under the buildings,” Cetra said.

The extra support needed, plus working with the existing bones, affected what amenities could go where. The developers and designers knew they wanted courts for racquet sports in the building, but finding a space uninterrupted by columns proved challenging. They carved out a spot in the basement, placing two pickleball courts behind a glass wall to give gym-goers a courtside view.

The former building’s quirks and the new shapes of the floorplates after the light wells were added also meant designing more than 100 different apartment layouts. The shape of a three-bedroom apartment on the ninth floor, with sweeping views of the expanse of water stretching beyond the Seaport, was dictated by its corner location in what was previously an elevator shaft.

“That's one of the things about a conversion. You don't look at the building and say, ‘That's it.’ Because it isn't,” Cetra said. “You can do a lot to it if you know what you're looking for. So we took advantage of every possibility to create something.”

The developers also added hundreds, perhaps thousands, of windows to the building during the conversion, which meant punching through the walls in every unit while keeping elements of the building’s original design. The result is some window panels that jut out a few inches next to windows that align with inset columns where the original fenestration was.

“We basically cut out the brick on both sides and did these ribbons of windows,” Cetra said. “We kept that shape, that pattern, but we took out all the brick in between.”

While the developers suspect that the original red brick exterior may have been designed to mirror the much-smaller downtown buildings originally around it, they felt that the building’s hulking size left the exterior looking out of place.

In the interim decades, newer-looking office towers with much larger windows and stone facades popped up along the side of Water Street where SoMA sits. Knowing that their building would stand out because of its size alone, GFP, CetraRuddy and Rockwood opted for a modern, white finish.

“Changing it to the lighter color now made it a part of this whole modern development that took place on the water side of Water Street,” Cetra said. “It really then almost created more of an impact with the older buildings, because it wasn't trying to mimic it anymore.”