Office-to-residential conversions are more popular than ever as landlords seek feasible solutions for their underperforming properties. A recent CBRE report estimates that the number of office conversions will be double this year compared to 2022, with nearly half of the properties being repositioned as multifamily assets.
Global architecture firm CetraRuddy has a long history of designing office conversions. The studio is currently working on one of New York City’s largest office-to-residential conversion yet, at 55 Broad St. Dating back to the 1950s, the 30-story tower will be repurposed into 571 luxury residential units. Owners Metro Loft and Silverstein Properties landed a $220 million loan for the project back in August.
John Cetra, co-founding principal of CetraRuddy, shared details about this outstanding transformation taking shape in the heart of Manhattan’s Financial District. From opportunities to challenges, and predictions about the office-to-residential trend, Cetra touches on multiple aspects in this interview with Multi-Housing News.
Your firm has an impressive number of conversion projects in its portfolio. What makes 55 Broad stand out?
Cetra: There are a few key aspects that make 55 Broad stand out. One is the scale: It’s an extraordinarily large conversion project, one of the biggest in New York City history, which is an exciting feature in itself.
In a related vein, although we’ve adapted more than 4 million square feet of commercial and industrial space for residential use, people across the world are now more interested than ever before in how these initiatives are carried out. There is a great opportunity for 55 Broad to serve as an important and highly visible case study in the best practices and benefits of office-to-residential conversions. We’re happy to play a role in that process.
How will the new, residential function of the building fit into the area and how will it benefit the neighborhood?
Cetra: When it was built in the late 1950s, commercial office space was certainly the best and highest use for 55 Broad St. An apartment building wouldn’t have made sense in a district that emptied out at 5 PM every day and offered few services. Now, spurred in large part by previous commercial-to-residential conversions, the Financial District has become one of Manhattan’s most dynamic and desirable full-service mixed-use neighborhoods and, in fact, a residential function is ideally suited to the area’s needs. Reinvigorating struggling office properties as apartments is one of the best ways to keep a commercial district vibrant and viable in the face of major economic and cultural shifts.
And as New York—like cities worldwide—struggles to keep up with the demand for housing, there is a clear benefit to repurposing an older building like 55 Broad St. Current zoning codes would not allow a new structure on this site to reach anything close to the square footage of the existing building. From our perspective, the conversion of 55 Broad St. is a big win for the Financial District and for New York City.
What are the biggest challenges of this particular conversion?
Cetra: 55 Broad St. is one of the largest-ever residential conversions in New York City. There’s a substantial amount of analysis and planning behind any large-scale, adaptive-reuse project, but undertaking the effort for a conversion of this scope is that much more involved.
For any project where the building’s function is changing to residential use, setting an effective program is always a challenge. In this instance, the design team was fortunate because we had been able to conduct studies well in advance that helped us work out the apartment layouts.
What types of units will the property offer? What about common amenities?
Cetra: Adapting a building of this size for multifamily use means the design team at CetraRuddy has been able to create an unusually diverse unit mix, ranging from studios all the way up to three-bedroom apartments. Some of the larger units will have private terraces, too, which is an important point of differentiation in the market.
The amenities package will also be compelling, with highlights including a private club, programmed wellness and fitness spaces, an elegant coworking area and multiple social spaces. There will also be a 45-foot-long rooftop pool, landscaped sundeck and grill area—with extraordinary views of the Lower Manhattan skyline and waterfront.
Tell us more about the recaptured floor area added at the top of the building.
Cetra: Being able to understand the local zoning regulations and work effectively and creatively within them is one of the key factors that determines whether or not a conversion proposal is viable. In this case, the design team determined that converting 55 Broad St. from commercial to residential use would open the door for recaptured floor area. We are designing new residential levels within what used to be a mechanical space at the top of the building, and we’re also adding an amenity space with terrace and pool deck.
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Are the floorplates small enough to make the transition easily, or will the building have significant residual “dark spaces”? If so, what will be their function?
Cetra: Due to the building’s scale and because it was constructed in the late 1950s, 55 Broad St. actually has three different floorplates. The first six floors are the largest and form a podium at the building’s base, and then there is a sequence of two setbacks as the tower rises. This is a common condition in New York City high-rises constructed between 1916—when the city’s first zoning resolution mandated the setback approach—and 1961, when the zoning codes were revised.
How does this design impact the conversion process? On the one hand, it does create programmatic challenges for those lower floors with longer lease spans, because some apartments will inevitably be deeper than a typical residential unit. But we also see that as an opportunity to use the depth creatively, for instance by adding flex spaces or home office areas closer to the building core. That type of bonus space is actually very desirable in today’s remote hybrid work environment.
On higher floors, the building’s setbacks make conversion more straightforward—in fact, the floorplates are roughly comparable to those in a typical ground-up apartment project. We also have the bonus of being able to create terrace space for a selection of units thanks to the setbacks, which is a significant value-add for the owner.
Tell us more about the sustainable features of the project.
Cetra: Commercial-to-residential conversions tend to be fairly sustainable endeavors from an environmental perspective. For one, we’re able to reuse foundations and much of the building structure, which represents a significant amount of embodied carbon. As part of the conversion process, we’re also making the building much more efficient. All the half-century-old mechanical systems are being replaced, and many of the new elements will be fully electric.
There’s a huge sustainability benefit to these upgrades, as most commercial office developments from the 20th century did rely on cheap energy, not prioritizing efficiency in heating or air conditioning, for instance. Today’s systems are, of course, much more sophisticated and allow for individualized control and much lower energy use.
Similarly, we’re replacing all the glazing with high-performing casement windows which are dramatically more efficient and also offer residents better sound mitigation and a calmer indoor environment—an important factor in a busy urban setting like New York City.
What is the construction timeline of the project?
Cetra: Construction began this summer and is already well underway. We’re anticipating the conversion will take roughly two years for total completion, which is a much faster timeframe than the development team would be able to achieve with new construction. Speed-to-market is key in the current economic climate, so there is a measurable benefit to the conversion approach.
Tell us a little bit about 20 Broad St., an office-to-residential conversion near 55 Broad. How is that building performing today?
Cetra: Like 55 Broad, 20 Broad St. is a high-rise constructed in the late 1950s as a commercial office property. In fact, it was designed as an office annex for the New York Stock Exchange, which is the building’s immediate neighbor.
We converted the property for residential use several years ago, and it presented some of the same challenges as 55 Broad St., including deep floorplates. 20 Broad offered a strong proof of concept: The property has been very successful on the rental market, with occupancy rates well above 90 percent.
What are your predictions for the future of office-to-residential conversions in the current socio-economic context?
Cetra: Successful office-to-residential conversions always require the right confluence of economic circumstances and it seems like more properties could now be edging towards that set of favorable conditions. It also seems likely that public officials will increasingly explore policy changes to incentivize conversions.
In New York City, the mayor recently proposed zoning changes that would make dozens of buildings newly eligible for conversion, both by loosening geographic restrictions on where in the city these initiatives are allowed and also by enabling a wider range of buildings from different eras to qualify.
Other cities are exploring similar ideas. I don’t think we’ll suddenly see every underutilized office building undergo a residential conversion, but it will become a viable solution for a greater number of landlords.
