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- The iconic Flatiron Building will be converted from empty offices into luxury residences.
- The project will be one of Manhattan's most high-profile commercial-to-residential building conversions.
- The mayor recently unveiled a push to rezone large swaths of Manhattan to encourage conversions.
Forty lucky households will soon be able to call a Manhattan landmark home. The iconic Flatiron Building will be converted from empty offices into luxury residences, the owners announced this week.
One of the tallest skyscrapers in the world when it was built, the 22-story, 120-year-old building has had a tumultuous last few years. It's been empty ever since its longtime office tenant, Macmillan Publishers, moved out of all of its 20 floors in 2019. When the property's owners couldn't agree on what to do with it, it was put up for auction in March of this year. But after it was sold for $190 million, the buyer failed to pay the $19 million deposit and disappeared. Finally, the building was sold to one of its partial owners, real estate developer Jeff Gural, for $161 million in May 2023 — something of a steal, given the structure was reportedly valued at more than $200 million before the pandemic emptied offices and seriously undermined the commercial real estate market.
The unique triangular structure — sandwiched between 5th Avenue and Broadway and 22nd and 23rd streets — will be transformed into about 40 condos or rental units with retail remaining on the ground floor — a conversion process that's expected to take about three years, The New York Times reported.
The Brodsky Organization, a residential real estate developer, bought a stake in the Flatiron building this month and will lead the conversion process, which will include moving the staircases and elevators. It'll also involve carving out the unique units and transforming what author Louise Penny once called its "rat's nest" interiors into luxury homes.
Manhattan Borough President Mark Levine called the announcement "a big deal."
"We need to see much more of this," he wrote on X, formerly known as Twitter. "Great way to put vacant office space to a positive use. (And we need to ensure these conversions include affordable units.)"
The building will likely not have any affordable units set aside for lower-income households, unless New York State changes its laws. Developers say because building conversions are so expensive, it simply doesn't pencil out to make any units affordable, unless there's a tax break or other incentive available. The governor has proposed a 50% property tax break for buildings that include a certain percentage of units for lower-income residents — a policy the city supports. But the state legislature hasn't passed it.
The Flatiron Building's redevelopment will be one of New York's most high-profile commercial-to-residential building conversion projects, something that's become a central part of the city's efforts to build more housing. The building's narrow footprint, many windows, and location in a vibrant, mixed-use, highly in-demand neighborhood makes it well-suited for residential conversion. Commercial tenants generally prefer newer, so-called Class A buildings that have more modern features, like open floor plans, and higher-end infrastructure.
Mayor Eric Adams recently unveiled a plan to rezone Midtown South to encourage new housing construction and the conversion of office and manufacturing spaces into apartments. The area — between 23rd and 40th streets and Fifth and Eighth Avenues — is just north of the Flatiron building. The goal is to help more neighborhoods in Manhattan become mixed-use, 24/7 live, work, play areas, director of New York City's Department of City Planning, Dan Garodnick, recently told Insider.
Cities across the country have become increasingly interested in turning vacant or partially empty office buildings into housing to help address both a housing shortage and an oversupply of commercial space. The Biden administration has also recently waded into the space, announcing on Friday that it will open up loans for property owners who want to covert commercial buildings near mass transit into below market-rate housing.