BridgeCity provides $83.5M for Midtown East office-to-resi conversion

BridgeCity Capital provided $83.5 million of acquisition and construction financing to CSC Real Estate for its planned office-to-residential conversion in Midtown East, Commercial Observer first reported. The loan closed Oct. 13 for a 136-unit project at 136 East 57th Street, according to the report.

CSC bought the 20-story, 92,582-square-foot building for $10 million in March from Cerco Funding, PincusCo reported at the time. The property, at the corner of East 57th Street and Lexington Avenue, was built in 1931 and renovated in 1987, and it sits across the street from 135 East 57th Street, where TF Cornerstone is executing a separate conversion known as Tower 57.

$83.5 million across 136 apartments works out to about $614,000 of loan proceeds per unit and roughly $902 per square foot of existing building. Because the acquisition price was $10 million, most of the loan is likely funding the repositioning rather than the purchase. Pricing, loan-to-cost, total project budget, term and structure were not disclosed.

"BridgeCity is excited about this transaction, given the property's exceptional location and the strength of the underlying business plan," EJ Ehrlich, the lender's director of originations, said in a statement. "We believe this project represents a compelling opportunity to reposition a well-located Manhattan asset into a premier luxury residential property."

The borrower's basis helps explain the lender's comfort: at $10 million for 92,582 square feet, the acquisition came to roughly $108 per square foot, which leaves room for hard costs before the all-in number approaches Manhattan residential replacement cost. Whether that math holds depends on construction pricing the disclosure does not include.