Insurance giant is relocating to Midtown
Nathan Berman’s Metro Loft Management – the firm responsible for converting a number of the Financial District’s office towers into residential buildings – has his sights set on AIG’s headquarters for its next big project.
Metro Loft is in contract to buy the insurance giant’s 31-story building at 175 Water Street for $270 million, sources told The Real Deal.
Berman plans to convert the top half of the 684,000-square-foot building into residential once AIG’s lease expires in 2021, by which time the company will have left the building vacant following its relocation to the former Time-Life Building in Midtown.
Berman confirmed to TRD that his firm is in contract to buy the property. A spokesperson for AIG declined to comment.
The Vanbarton Group, which has previously partnered with Metro Loft on a trio of Downtown projects, is taking a preferred equity position in the deal that sources said is in the range of $70 million to $75 million. The Blackstone Group is providing a senior mortgage in the amount of $175 million.
A representative for the Vanbarton Group declined to comment and a spokesperson for Blackstone could not be immediately reached.
An Eastdil Secured team of Gary Phillips, Will Silverman and Jeff Organisciak marketed the property and negotiated the deal for AIG. A representative for the brokers declined to comment.
British real estate developer Howard Ronson built 175 Water Street in 1983 and sold it to anchor tenant NatWest Bancorp while the tower was under construction. After NatWest relocated to New Jersey in the early 1990s, the bank sold the property to AIG in 1996.
The tower, whose exterior features alternating bands of glass windows and brown stone cladding, sits along the eastern edge of Lower Manhattan in a submarket known as the Insurance District, which had traditionally exhibited all the flair that name implies.
Water Street is lined with humdrum office towers from the 1960s and ‘70s that form a canyon running nearly a dozen blocks from the tip of Lower Manhattan to Fulton Street with large, efficient floor plates designed to attract big corporate tenants.
The thoroughfare had long been the epitome of Lower Manhattan that shuts down at 5 p.m. and empties its streets, but there have been efforts to fold it into the neighborhood’s transformation into a 24/7 live-work-play area.
The city, in part citing the neighborhood’s growing residential population, approved a plan in 2016 that allowed building owners to transform the open-air arcades that line the bases of Water Street’s towers (known as Privately Owned Public Spaces) into retail use in an effort to help perk up street life.
And nearby projects like the Howard Hughes Corporation’s Pier 17 at the South Street Seaport have helped breathe new life into the area. https://therealdeal.com/tag/pier-17/
Berman, a former Ukrainian art dealer who founded Metro Loft Management in 1997, has converted more than 3 million square feet of office space in the Financial District to residential rentals, earning himself the nickname “the King of FiDi.”
In 2013, Berman bought the building across the street from AIG’s tower – 180 Water Street – with Vanbarton for $151 million and the partners spent $100 million converting the tower to residential rentals.
Metro Loft Management bought Vanbarton’s majority stake in the property in 2017 for $416 million. Berman’s firm last year master-leased 169 units at the building it owns at 20 Broad Street to Sonder, the short-term rental hospitality company based out of San Francisco.