Midtown Conversions Signal Office Reuse Surge
Yellowstone Real Estate Investments is leading the charge to transform Midtown’s aging office stock into high-density housing. The firm filed plans to convert 1730 Broadway—a 26-story office tower purchased from Blackstone for $185.9 million—into a residential building with over 400 units. The latest filings list 469 units, and the initial project cost is estimated at $34.7 million. BKSK Architects is designing the conversion.
Other Midtown office-to-resi moves include a 942-unit plan by Apollo, SL Green, and RXR at 5 Times Square and Rudin’s proposed conversion at 355 Lexington Avenue. While Lower Manhattan remains active with projects at 2 Wall, 80 Pine, and 111 Wall, Midtown is becoming the new epicenter of conversions.
Queens Sees Quiet but Significant Residential Push
Watermark Capital Group, led by Wolf Landau, filed plans for two adjacent residential buildings in Jamaica, Queens—each with 98 units. The eight- and nine-story developments, located at 159-02 Hillside Avenue and 87-77 Parsons Boulevard, will be designed by Xpdite Group LLC.
Meanwhile, in Astoria, the long-stalled Astoria Cove megaproject secured $300 million in construction financing from KS Group, reviving plans for over 2,800 units across three phases.
Lone Star Buys Into Office Loan Market
Texas-based Lone Star Funds acquired four loans from Flagstar Bank totaling $220 million in original principal. The notes are backed by office properties in Manhattan and Long Island City, including:
-
Olnick Organization’s 130 Fifth Avenue ($77M)
-
RXR’s Long Island City office ($66M)
-
Handler Real Estate’s Garment District asset ($52M)
-
Shamie family’s Chelsea building ($25M)
The deals do not automatically imply distress. Lone Star also modified a separate loan for a Stellar Management property—indicating a nuanced repositioning play.
Rent Guidelines Report Spurs Landlord–Tenant Clash
The Rent Guidelines Board’s 2023 Income & Expense Study showed an 8% increase in net operating income for rent-stabilized buildings, adjusted for inflation. Landlords argue the data includes irrelevant properties. Tenant groups say the results support a rent freeze. Expect this debate to dominate the upcoming rent board cycle.
City of Yes Faces Legal Threat
Over 100 parties—including City Council members and community boards—have filed suit against the Adams administration’s “City of Yes for Housing Opportunity” zoning overhaul. The lawsuit claims the city violated environmental laws by failing to conduct a full impact review. The administration maintains its process is legal and sound. The outcome could shape the future of upzoning efforts citywide.
Voucher Bills Aim to Reignite Vacant Rent-Stabilized Units
Two landlord-backed bills seek to activate long-vacant rent-stabilized units. One would allow owners to receive full voucher payments even if they exceed the regulated rent. The second would let landlords reset rents on apartments vacant for 10+ years after renovations and agreements with new tenants—so long as they stay within HUD caps.
Tenant groups warn the proposals would incentivize tenant displacement. The New York Apartment Association has made these reforms a legislative priority.
Big Deals and Big Drama in Prime Markets
-
Eliot Spitzer is selling his 208-unit rental at 800 Fifth Avenue to Miki Naftali for over $800 million. A condo conversion is possible.
-
A buyer of an $80 million penthouse at 520 Park Avenue is suing Zeckendorf for allegedly hiding plans for a view-blocking tower.
-
A co-op at 211 Central Park South sold for $6.6 million.