Largest Financing Ever Secured for an Office-to-Residential Conversion in New York City

IPA Capital Markets, a division of Marcus & Millichap (NYSE: MMI) specializing in capital markets services for major private and institutional clients, announced today the closing of a $720 million loan to a joint venture between Metro Loft Developers and David Werner Real Estate Investments for the development and conversion of the former Pfizer headquarters consisting of two adjacent and connected office buildings. Max Herzog, Marko Kazanjian, Andrew Cohen and Max Hulsh of IPA Capital Markets, secured the financing with Madison Realty Capital.

“By structuring flexible financing for the largest office-to-residential conversion in New York City's history, we are enabling a new benchmark for luxury rental housing in Midtown Manhattan,” said Josh Zegen, managing principal and co-founder of Madison Realty Capital. “Metro Loft’s track record executing complex office-to-residential conversions in New York City, combined with David Werner Real Estate Investments’ deep experience with high-profile, institutional assets, makes them an ideal sponsorship team for a project of this scale.”

“David Werner Real Estate Investments and Metro Loft put together a best-in-class conversion project that enabled our IPA Capital Markets team to facilitate a competitive financing process,” said Herzog. “Madison Realty Capital demonstrated professionalism from the outset and executed flawlessly resulting in a smooth and efficient closing. Once completed, this office-to-residential conversion will set a new standard for conversions, helping to meet the demand for Class A multifamily housing in New York City.”

Nathan Berman, founder and chief executive officer of Metro Loft, added, “We’re thrilled to reach this major milestone in bringing our vision for this transformative development to life. We are grateful to our partners at David Werner Real Estate Investments and to our lenders at Madison Realty Capital for their confidence and commitment.”

Upon completion, the property will total 1,602 luxury rental apartments, 25% of which will be designated affordable under New York City’s Affordable Housing from Commercial Conversions Tax Incentive Benefits program. It will also include over 100,000 square feet of amenities and approximately 30,000 square feet of ground-floor retail space. Across both buildings, residences will feature high-end finishes such as custom built-in kitchens with premium appliances, stone countertops, bespoke bathrooms with deep soaking tubs, in-unit washer/dryers, and integrated smart-home technology.

“We are proud to collaborate with Metro Loft, a valued partner, on the transformation of the former Pfizer headquarters, a project that reflects our shared vision and commitment to revitalizing iconic New York real estate,” said David Werner, president of David Werner Real Estate Investments. “It was a pleasure to close a loan with Madison Realty Capital. They are an accurate and efficient lender, while providing flexibility where needed and the surety of execution. Their proactive involvement and professional coordination were instrumental in achieving our objectives. I am deeply appreciative of the entire team at Madison Realty Capital, and I look forward to working with them again in the near future.”

Located at 219 and 235 East 42nd Street in the Midtown East neighborhood of Manhattan, the property will be converted into a state-of-the-art multifamily building. Construction of the property is currently underway and is expected to be completed by the fourth quarter of 2027.

Fried Frank, led by Mike Werner, represented the borrower and Kriss & Feuerstein, led by Jerry Feuerstein, represented the lender.

About IPA Capital Markets

IPA Capital Markets is a division of Marcus & Millichap (NYSE: MMI). IPA Capital Markets provides major private and institutional clients with commercial real estate capital markets financing solutions, including debt, mezzanine financing, preferred and joint venture equity, and sponsor equity. For more information, please visit institutionalpropertyadvisors.com/capital-markets.

About Madison Realty Capital

Madison Realty Capital is a vertically integrated private equity firm focused on US-based commercial real estate private credit strategies. As of December 31, 2024, the firm, including its controlled affiliates (collectively, “Madison”), manages $22.1 billion in assets on behalf of a global institutional investor base. Since 2004, Madison has completed over $53.7 billion of securities and non-securities real estate transactions largely through direct lending to a wide range of borrowers, acquiring non-performing loans and making preferred equity investments. Madison Realty Capital seeks to deliver value across every phase of the property lifecycle by providing customized financing solutions and strong underwriting capabilities that meet borrowers’ unique needs with speed and certainty of execution. To learn more, follow Madison Realty Capital on LinkedIn and visit www.madisonrealtycapital.com.

About Metro Loft

Metro Loft Management, LLC is a vertically integrated real estate development and management company founded in 1997 by Nathan Berman, who continues to serve as the managing principal. As a pioneer in the residential development of Lower Manhattan, Metro Loft has spent the past two decades redeveloping some of the most iconic buildings in downtown New York City, including landmarks such as 443 Greenwich St., 20 Exchange Place and 63 Wall St. Metro Loft is responsible for the acquisition, development and management of some of the most notable condominium and rental buildings in Lower Manhattan. Our reputation as a leading commercial-to-residential development firm is built upon our approach and vision to preserve the details that make each property unique and to elevate them through modern design and amenities.

About David Werner Real Estate Investments

David Werner Real Estate Investments, based in New York City and led by industry veteran David Werner, boasts over four decades of successful investment in commercial real estate. With extensive experience across office and residential sectors, the firm is recognized for its ownership and strategic management of some of New York City's iconic properties.

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Largest Financing Ever Secured for an Office-to-Residential Conversion in New York City