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Developers and investors in New York City have been scrutinizing office assets for the past year, seeking properties ripe for conversion to residential. And now, one owner has found an opportunity.
Investor Tony Park and South Korean media company MediaWill bought a 113K SF office tower a few blocks from Penn Station for $37M in September 2023. The owners are now thinking about a potential residential conversion for part of that 10-story property at 110 W. 32nd St., Crain’s New York Business reported.
Park, who owns real estate investment firm PD Equities, and MediaWill have already sold the 30K SF retail condo at the tower’s base for almost $30M to an unnamed Korean investor, according to Crain’s.
The retail space includes the mezzanine and cellar as well as the ground floor and will reportedly be used for a supermarket. PD Equities’ brokerage arm, PD Properties, represented the seller in the retail deal.
PD Equities reportedly plans to convert the former office spaces, filling the remainder of the property into 77 studio and one-bed rental apartments. Other features in the conversion include a gym and a rooftop lounge.
New York government leadership has been angling for ways to incentivize office-to-residential conversions in the face of a housing crisis characterized by record-breaking rents and a shortage of new developments.
New York City Mayor Eric Adams introduced measures to cut red tape for conversions in Manhattan’s Midtown South neighborhood last September.
Last week, Gov. Kathy Hochul announced she would be introducing legislation to facilitate office-to-residential conversions in New York, which may sound familiar since she also mentioned conversions in her State of the State speech the previous year.
But developers have repeatedly said over the past year that it’s hard to find properties that are good candidates for conversion and that make sense amid the current financing environment.
“There's a million things that can go wrong, not to be the naysayer here … The only way to really make it work is to get the building really cheap,” Placemakr CEO Jason Fudin said at a Bisnow event last year. “That's a hard thing for people to swallow.”
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