Dive Brief:

• New York City-based The Brodsky Organization recently bought a stake in Manhattan’s iconic Flatiron Building on Fifth Avenue, and intends to convert the office structure into 40 luxury condominiums, according to a press release shared with Multifamily Dive. 
• Brodsky — managing a joint venture with two of the building’s part owners, New York City-based The Sorgente Group and GFP Real Estate — intends to seek approval for the project in early 2024. Specifics for the condos’ design and floor plans and sales price have not been released.
• The redevelopment will include renovations necessary to protect the property, according to the release. A separate renovation, including repairs to the building’s terracotta facade, has been underway since 2019 and the building’s exterior has been covered in scaffolding since.

Dive Insight:

The Flatiron Building, originally constructed in 1902 and designed by architect Daniel H. Burnham, was the first skyscraper ever built north of Union Square and the first steel-framed skyscraper in the world, according to New York City Tourism + Conventions. The structure was designated a New York City Landmark in 1966 and a National Historic Landmark in 1989.

The building’s office space has been vacant since its last tenant, Macmillan Publishers, left in 2019. Its sole tenants as of now are its ground floor retail, including a T-Mobile store, which will remain after the conversion, according to The New York Times. 

“We believe that the Flatiron Building is well suited for residences and we look forward to working with the city and the Landmarks Preservation Commission on this exciting opportunity,” said Daniel Brodsky, managing partner of The Brodsky Organization, in the release.

The property was put up for auction in March 2023, sold for $190 million to Jacob Garlick of Virginia-based venture capital firm Abraham Trust, then forfeited when the winning bidder failed to make a $19 million initial payment on the property, according to The New York Times. A second auction was held later and won with a $161 million bid by a group of majority stakeholders, including Sorgente and GPF.

Office-to-multifamily conversion projects have gained major ground over the last several years. Over 3,300 units converted from office spaces came online in the U.S. in 2022, and an estimated 45,000 more are in development, according to RentCafe. 

New York City has the second-largest office-to-multifamily conversion pipeline in the nation, behind Los Angeles. Other notable projects in the city include 55 Broad Street in the Financial District and the McGraw Hill building in Midtown. Mayor Eric Adams has announced the city’s intent to modify zoning in Midtown to allow for more housing development, with a “moonshot goal” of 500,000 new units in the city over the next decade.