You know that triangular-shaped tower in the heart of Manhattan, the one not quite like the rest? The Flatiron Building, historically used for offices, has been facing recent financial challenges and is set to transform into luxury housing, The New York Times reported.
The 22-story, limestone and terra-cotta-building was built in 1902 and is only 6.5-feet wide in some places. Despite the building itself being vacant since early 2019, the neighborhood around it, which is now called “Flatiron” is surrounded by luxury condos and high-end restaurants.
In March, an unknown buyer won an auction for the property at $190 million but failed to follow through with the $19 million deposit. A second auction was conducted in May, eventually going to the majority interest holder of the building, Jeff Gural, at a winning bid of $161 million, and the Sorgente Group, another former interest holder, as the new ownership group.
The Brodsky Organization, a residential developer, is converting the building into residential units, which may be sold as condominiums or offered as rentals.
The 121-year-old building’s sole tenant, Macmillan Publishers, left before the pandemic after 60 years. Since 2019, the upper floors of the building have remained, and scaffolding covers the exterior as it undergoes repairs.
The Flatiron Building on Fifth Avenue in New York City has become an iconic landmark. Alexander Spatari | Getty Images.
Despite Gural’s initial intention to preserve the Flatiron Building’s office space, he told the NYT that current economic conditions make residential use a more viable option.
“There are going to be 40 people who want to live in the Flatiron Building,” Gural told the outlet.
The conversion project is expected to take about three years, including a year-long approval process from the Department of City Planning, followed by two years for demolition and construction.
The building’s transformation into residential spaces underscores a nationwide trend of converting struggling office buildings — that haven’t recovered from a broader change to remote work policies — into housing.
San Francisco is taking steps to convert vacant downtown office buildings into housing as well. Meanwhile, in Washington D.C., Mayor Muriel Bowser is proposing an increase in tax incentives for downtown office building owners who convert their properties into housing.
Nationwide, the office vacancy rate stood at an average of 16.9% by the end first quarter of 2023, marking an increase from the 12.4% vacancy rate recorded during the same period of 2020, Investopedia reported earlier this month.