Vanbarton Group’s Richard A.C. Coles is in the running to be the king of New York City’s residential conversions.
The developer has converted the drab office building in the Financial District at 160 Water Street into sleek luxury apartments. The firm has three more New York City office projects underway at 77 Water Street, 1011 First Avenue and 6 East 43rd Street. It has another one in Seattle.
Vanbarton’s conversion mania is, in part, spurred by 467M, a tax incentive passed in the New York state legislature in 2024.
“Once that happened, it really gave that shot in the arm for both owners and developers to say, ‘Huh, okay, they can actually do it and lean into it,” said Coles.
Coles participated in The Real Deal Salon Series this month, hosted at TRD’s Manhattan office, to discuss a range of topics, including conversions, construction financing and New York City’s new mayor Zohran Mamdani.
Mamdani is targeting landlords while pushing out his affordability agenda. He created “Rental Ripoff Hearings,” giving tenants a public forum to air their grievances about their greedy landlords. Mamdani has pitched other pro-tenant policies, including freezing the rents on rent-stabilized units.
Coles said Mamdani’s victory in the Democratic primary against Andrew Cuomo sent chills down the spines of some investors.
“The second he won, global investors, offshore investors, pulled back dramatically,” said Coles.
After Mamdani won the general election in November, “things started to sort of cool, thaw a little bit, but I still think in the deep inner recesses of the global investor, they’re taking a wait and see approach to NYC,” said Coles.
The mayoral election is not pausing Vanbarton’s construction projects.
The firm is going ahead with its much sought-after development site in Nomad. The site at 3 West 29th Street sits next to the Marble Collegiate Church and was put on the market last summer with a projected sales price of $250 million. Vanbarton previously eyed building a life sciences development.
But with the Midtown South rezoning, Coles said Vanbarton will build a residential project. He added that if the development is completed, it could be the largest in NYC using the 485x tax incentive.
“Banks are coming back in. Our hope is that by the time we’re ready to go to the lending market, the banks will be ready to embrace, in a competitive fashion, the kind of construction loan that we would need for that project,” said Coles.
Coles also expects more residential conversions to come to the Financial District and Midtown. But he notes some sections of the Garment District will still need help.
“We see most, if not all, of the mid-block garment buildings between 40th and 30th, between Fifth and Seventh, and those buildings are obsolete,” said Coles.
He added, “Somebody with a magic wand or an executive order needs to come in and say, OK, we need to create a tax incentive to spur development and put a shelf life on it, give it five years. But do something, because without that kind of initiative, that will just languish.”
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