Office Tenant Asks Court to Block 55 Broad Conversion
Residential real estate firm says NYC project is a violation of 11K SF lease.
A tenant at 55 Broad Street—a Financial District tower about to undertake one of the largest office-to-apartment conversions in NYC—has filed a lawsuit seeking to block the conversion project, claiming it’s a violation of their lease.
The tenant trying to block the residential conversion is a residential landlord who has an 11K SF office in the building: Solstice Residential Group.
Solstice in a lawsuit filed last week branded the adaptive reuse project at 55 Broad undertaken by Silverstein Properties and Metro Loft Management “extremely disruptive and dangerous” to the company.
The lawsuit also names Rudin Management Co., claiming Rudin was aware of Silverstein and Metro Loft’s plans to convert the building into 571 apartment units when the developers bought the building in May. The partners paid $180M for the 30-story tower, in a deal expected to close this month.
Building rules outlined in Solstice’s lease stated that no tenant could use its space for residential purposes. According to the lawsuit, Solstice said Rudin had agreed that the landlord would not redevelop 55 Broad into something other than an office building before the company’s lease expires in 2029, TheRealDeal reported.
Solstice said it relocated from 257 Park Avenue South in the Flatiron District and signed a 10-year-lease at 55 Broad in 2019 because it wanted to be on the 26th floor of a “first class” office building.
The residential real estate company said it “never imagined, and would never have countenanced, moving into a residential apartment building for the conduct of its business,” TRD reported.
The lawsuit accuses the building owners of circumventing the lease by starting the conversion project without invoking the demolition clause, which would require it to terminate office leases.
Silverstein said through a spokesperson that the owners are working with tenants “to ensure a smooth move,” offering them office space in other properties the landlord owns.
Solstice made it clear they’re not going anywhere. Asking the court to stop the project, the company said the conversion will “severely disrupt” its right to occupy its office and that asbestos removal during the conversion will be life-threatening for its workers.
When Silverstein and Metro Loft unveiled their plans in June for the apartment conversion, the Wall Street Journal reported that a third of the office space in the 56-year-old, 425K SF building was vacant. Tenants in the Lower Manhattan building were primarily financial services and tech firms.
The conversion to apartments is “the right evolution of these struggling, underperforming older office assets that are approaching their obsolescence,” Nathan Berman, Metro Loft founder and managing principal, told WSJ.
Silverstein and Metro Loft are planning to convert 55 Broad into apartments ranging from studios to three-bedroom units.
When the Rudin family developed 55 Broad, it was planned as the headquarters for Goldman Sachs, but the investment bank moved out in 1983. The building was renovated in 2019, including a new lobby.