Metropolitan Tower Redevelopment, NYC

About this Property

The Metropolitan Tower Redevelopment in New York City is a landmark urban regeneration project transforming a decommissioned 1960s office tower in Midtown Manhattan into a mixed-use residential and retail destination. Located on a premier block between Park Avenue and Lexington Avenue, the 42-storey building will be converted into 280 luxury condominiums, 18,000 square feet of ground-floor retail, and a rooftop amenity deck with views of the Manhattan skyline. The project is being developed by a top-10 US real estate developer with over $8 billion in completed projects, in partnership with a global architecture firm renowned for award-winning adaptive reuse projects. Planning permission has been secured, and construction is scheduled to commence in Q3 2025 with completion targeted for Q4 2027. NEW YORK CITY LUXURY RESIDENTIAL MARKET Manhattan's luxury residential market has demonstrated remarkable resilience, with sub-$3M condominiums experiencing a supply shortage that has driven prices up 14% year-on-year. The conversion of office buildings to residential use is a government-supported initiative, with the NYC administration offering significant tax incentives (421-a abatement) that enhance project economics substantially. INVESTMENT STRUCTURE Investors participate through a preferred equity structure, ranking senior to the developer's common equity. Preferred investors receive a fixed preferred return of 10% per annum, paid quarterly from construction loan proceeds, plus a 25% share of profits upon sale of the completed units. The developer retains 75% of profits but bears all construction risk and cost overruns. PROJECTED RETURNS Based on current Manhattan luxury condo pricing of $2,800–$4,200/sq ft and projected sellout of all 280 units within 18 months of completion, total project revenue is estimated at $1.4 billion. After construction costs ($680M), financing ($120M), and sales commissions ($42M), net profit is projected at $558M. Investor share: $139.5M. Projected IRR: 22–26% over the 3-year investment period. RISK PROFILE Moderate. Preferred equity structure provides downside protection. Experienced developer with strong track record. NYC luxury market fundamentals remain supportive.