The $25 Million Transformation: Inside 29 West 35th Street NYC's Landmark Office-to-Residential Conversion
The iconic 12-story commercial building at 29 West 35th Street in New York City is currently at the epicenter of a major real estate transformation, marking a significant shift in Manhattan’s struggling office market. As of late 2024, this Midtown South address—historically known as the Penn Building—is shedding its identity as an office property to be reborn as a modern residential complex, a direct result of a new city initiative aimed at repurposing underperforming commercial space. This conversion is not just a standard development; it is one of the first major projects to move forward under Mayor Eric Adams’ ambitious Midtown South Mixed-Use Plan, setting a fresh precedent for New York’s post-pandemic urban landscape.
The monumental project is being spearheaded by a joint venture between two established New York developers, Marty Burger and Andrew Heiberger, who have recognized the immense potential in converting this prime location near Penn Station into much-needed housing. The transaction and subsequent plans have injected a new wave of optimism into the Garment District area, demonstrating a creative solution to the high-vacancy rates plaguing older office stock. This article delves into the building's history, the dramatic recent sale, and the detailed plans for its future as 107 new studio apartments.
The History of 29 West 35th Street and Its Recent Real Estate Drama
The building at 29 West 35th Street has stood as a fixture of the Midtown South/Garment District neighborhood for over a century. Constructed in 1911, the 12-story structure was originally designed as a commercial property, typical of the area’s early 20th-century boom.
A Century-Old Commercial Landmark
Known by some as the Penn Building due to its proximity to the major transportation hub, the property has primarily served as office space, housing various tenants over the decades. Its location, nestled between Fifth and Sixth Avenues, placed it squarely in the bustling heart of Manhattan, making it a desirable—though aging—commercial asset.
The Tumultuous 2024 Sale
The building’s recent history is a microcosm of the challenges facing the New York office market. In a dramatic turn of events, the property was the subject of intense real estate activity in late 2024. The building, having struggled to maintain value and tenancy, was ultimately acquired by a joint venture led by Marty Burger’s Infinite Global Real Estate Partners and Andrew Heiberger’s Buttonwood Development.
- Acquisition Price: The property was sold on September 14th, 2024, for approximately $22.76 million.
- Transaction Context: Sources indicate the property went back to the lender, with the new joint venture taking control for a price point around $23M to $25M, reflecting a significant discount from its previous 2007 sale price of $30 million.
- The Developers: The partnership between Burger and Heiberger was specifically formed to execute this type of complex office-to-residential conversion, leveraging their expertise in development and real estate investment.
The acquisition price, which some noted was as low as $270 per square foot for an office property, underscored the financial distress of the asset, but simultaneously highlighted the opportunity for a value-add conversion project.
The Future: 107 Studio Apartments and a New City Vision
The most compelling aspect of 29 West 35th Street is its planned future. The developers are embarking on a complete transformation to convert the struggling commercial space into modern, high-demand residential units. This move aligns perfectly with the city’s urgent need for housing and its efforts to revitalize aging business districts.
Pioneering the Midtown South Mixed-Use Plan
This conversion is notable because it represents the first major project to utilize the zoning changes enacted under Mayor Eric Adams’ Midtown South Mixed-Use Plan. This plan is a key municipal strategy designed to incentivize developers to convert non-performing office buildings into residential housing.
- The Goal: To address the dual challenge of high office vacancy rates and the severe housing shortage in Manhattan.
- The Precedent: The success of 29 West 35th Street will serve as a crucial test case and blueprint for future office-to-residential conversions in the Midtown South area and beyond.
The developers are transforming the commercial floors into 107 new studio apartments. This focus on studio units suggests an intention to cater to young professionals, students, or single occupants seeking modern, centrally located housing in a vibrant part of the city.
The Location Advantage: Midtown South and the Garment District
The building's location is a significant factor in the viability of the residential conversion. The address is situated in the heart of Midtown South, an area that has become increasingly popular for its blend of commercial, residential, and retail activity.
- Proximity to Transportation: The building is steps away from major transportation hubs, including Penn Station (offering access to Amtrak, NJ Transit, and the Long Island Rail Road) and Herald Square (with multiple subway lines). This unparalleled connectivity makes it highly attractive to commuters and city residents alike.
- Neighborhood Entities: The surrounding area, part of the historic Garment District, is buzzing with new businesses, hotels, and retail entities, including major stores at Herald Square like Macy's. The influx of new residents will further contribute to the neighborhood's ongoing revitalization.
- Market Demand: The demand for small, well-located apartments in this area remains strong, making the 107 studio apartments a valuable addition to the local housing stock.
A New Chapter for New York Real Estate
The transformation of 29 West 35th Street is more than just a real estate transaction; it is a symbol of New York City’s adaptive resilience. By converting a struggling 1911 office building into 107 modern studio apartments, the project addresses critical urban planning issues and signals a fundamental shift in how older commercial properties will be utilized. Marty Burger and Andrew Heiberger’s joint venture is pioneering a new era of development, turning a challenging market environment into an opportunity for innovative urban renewal. As construction progresses, the Penn Building's new life will serve as a powerful testament to the city's ability to evolve and meet the demands of its growing population.
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