There's no Roth IRA when an office building retires

What happens when an office retires?

I recently attended the NYC Real Estate Expo, and one of the interesting takeaways I gained was that “office-to-residential conversions are more efficient than we anticipated.” This may be true in Midtown, where buildings adhere to a rigid square grid, allowing for more symmetrical slices , but what about in other parts of the city?

The Financial District , just to the south of 10002 after Two Bridges—and that’s to tie us back to the LES, not that you don’t know where the FiDi is—has long been a site of constant reinvention . Said another way, people have attempted to turn fallow office buildings in the FiDi to residential spaces before…and they’ve failed .

25 Water Street, now called SoMA (South Manhattan, as if we needed an acronym to remind us where Manhattan ends and the East River begins ), is one such attempt. The site was a one-time workplace for JPMorgan Chase , now back in a brand new Midtown headquarters, the National Enquirer , and the New York Daily News (where I once worked, though not in this building).

With 1,320 apartments ranging from studios to four-bedrooms, complete with pickleball courts , bowling alleys , and a scented lobby pumping “green bamboo” into the air , it’s the largest office-to-residential conversion in America (as of last spring, at least).

Are there really 1,320 people that want “green bamboo” pumped into the air? (I’ve never smelled it, so I could be persuaded.)

SoMA’s floorplates sprawl 40,000 square feet , with only two sides of legal light and air — an “architectural nightmare” under NYC zoning. Developers GFP Real Estate and Metro Loft (working with Rockwood Capital) stripped most of the original facade , cut light wells through the core , and added a ten-story crown . What stands now is a building that’s part restoration, part reinvention, otherwise deemed “a new building inside an old shell.”

What’s it cost?

• Studios start at ~$4k/month

• One-bedrooms start at ~$6k/month

• Two-bedrooms start at ~$10k/month

• Three-bedrooms start at ~$11k/month

Check out a few of the wilder floorplans below .

A quarter of the units are set aside as affordable , with lottery rents as low as $932/month for eligible households — a substantial spread between market and subsidized tenants .

To fit residences into the deep floor plates that typically characterize Manhattan office buildings, the architects of SoMA had to get creative . For instance, some studios have two bathrooms . Others include a “home office” that looks suspiciously like a second bedroom — except zoning prohibits calling them “bedrooms.” Add angular streets and trapezoidal lots to the mix , and you get quirky, wonky apartments that are inefficient yet unique .

SoMA was not built under Mayor Adams’s “City of Yes” initiative . Yet, it illustrates why the policy exists. Adopted in late 2024 , the City of Yes overhauls zoning rules to make housing conversions easier and boost supply citywide . Its core principles:
Unlock more conversions of non-residential buildings (built before 1990 / 1997 depending on district).
Create a “Universal Affordability Preference” allowing extra floor area when units are made permanently affordable .
Legalize Accessory Dwelling Units — think basement apartments and garage studios — where safety allows .
Reduce parking minimums and ease density caps near transit .

What are the takeaways for the LES?

Here in 10002 , we won’t see many 25 Water-sized projects, although the complete Essex Crossing footprint could be considered in a similar light .

The LES is already largely residential , its buildings smaller, more idiosyncratic, and better suited to gradual reuse than wholesale conversion . But the same forces — policy flexibility, tax incentives, remote work habits — will shape our market too .

Just the same, conversions like SoMA remind us that New York is still learning to reuse itself . They test the limits of design , policy , and patience , and they tell us something about what comes next .

For those of us on the Lower East Side, the lesson is simple: Space is fluid . Value is contextual .

Source: NY Times