David Werner Expands Office-to-Residential Conversion Projects
David Werner continues his momentum in the trend of converting office buildings into residential spaces, with his firm, David Werner Real Estate Investments, reportedly in contract to purchase the office building located at 5 Hanover Square in Manhattan’s Financial District. The acquisition from CIM Group is valued between $50 million and $60 million, according to sources familiar with the transaction, as first reported by The Real Deal.
Significant Price Reduction
This purchase price represents a substantial decrease from the $104 million CIM Group initially paid for the approximately 330,000-square-foot building in 2013, highlighting the shifting dynamics in the commercial real estate market. Past reports from the Commercial Observer confirmed this price history.
Plans for the Property
While specific intentions for 5 Hanover Square have not been disclosed, sources indicate that the property, which is currently around 50% vacant, may undergo a partial conversion to residential units. The TRD reported this potential strategy, which aligns with Werner’s broader focus on residential transformation of underutilized commercial spaces.
Brokerage and Financing Details
The transaction has been facilitated by real estate brokers Doug Middleton and Jack Stillwagon from CBRE. While CBRE has opted not to comment on the deal, representatives from CIM Group and David Werner’s office were unavailable for immediate comments.
Recent Financing and Additional Projects
In recent developments, Werner, in collaboration with Nathan Berman from Metro Loft Management, secured a $90 million loan from Northwind Group this week. This funding is aimed at acquiring and converting the office building at 675 Third Avenue into approximately 430 residential rental units.
This upcoming project is located near previous undertakings by Werner and Berman, including the conversion of the former Pfizer headquarters at 235 East 42nd Street and adjoining property at 219 East 42nd Street, which together will yield around 1,600 rental units, as reported by the Commercial Observer.
Further Expansion Plans
Earlier this year, Werner also went into contract to acquire the office building at 300 East 42nd Street from Fortress Investment Group for $52 million, with intentions to explore residential conversion once again.
For future updates on these projects, readers can follow developments in the commercial real estate sector.
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