- Madison Realty Capital issued a $720M loan to Metro Loft Developers and David Werner Real Estate Investments. The funds will support the conversion of two Midtown Manhattan office buildings into 1,602 luxury apartments.
- Once complete, the project will become the nation’s largest office-to-residential conversion.
- With 25% of units designated as affordable, the development qualifies for major tax breaks under New York’s 467-m program.
- Construction is underway. Delivery is expected by the fourth quarter of 2027.
A Milestone in Conversions
As reported by Multi-housing News, Metro Loft Developers and David Werner Real Estate Investments have secured a record $720M loan from Madison Realty Capital for an office conversion of the former Pfizer headquarters at 235 E. 42nd St. and a neighboring building into a large-scale multifamily property.
This project will set a new national benchmark for office-to-residential conversions. It surpasses all previous deals of its kind in size and financing.
Inside the Redevelopment
The two connected buildings will offer 1,602 rental units. Notably, 25% of these will be affordable. The project also includes over 100,000 SF of amenities and 30,000 SF of ground-floor retail.
Apartments will feature smart home technology, high-end appliances, stone countertops, and spa-style bathrooms. Each unit will also include in-unit washer/dryers.
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A Financing First
Madison Realty Capital structured the financing as a three-to-five-year construction loan. Marcus & Millichap’s IPA Capital Markets team arranged the deal.
Importantly, Madison provided the full loan as a “one-stop shop,” which allowed the borrower to avoid working with multiple lenders.
Earlier, Northwind Group had issued over $200M in loans for the site. Madison’s financing now consolidates and expands that capital.
The Players Behind the Deal
This marks Madison’s first project with Metro Loft, led by Nathan Berman. The firm is well-known for office-to-residential conversions. It’s also behind SoMA at 25 Water St., currently the largest such conversion in the US.
David Werner Real Estate Investments brings deep institutional experience. According to Madison, the team’s track record and the project’s strong fundamentals helped close the deal.
Why It Matters
Thanks to New York’s 467-m tax program, developers can receive up to a 90% tax break for 35 years. This is possible when 25% of units are affordable.
Given the oversupply of outdated office buildings, many see conversions like this as a smart path forward. They help address housing shortages while revitalizing underused commercial spaces.
What’s Next
The Midtown East project is part of a growing trend in adaptive reuse. More developers are taking advantage of tax programs and shifting demand.
Once complete in late 2027, the former Pfizer HQ will stand as a symbol of how cities can adapt to a post-pandemic world.
