Garment District Loft Flipped 62% in 14 Months, Then 166 Units

A 16 story loft on West 35th Street sold for $16,150,000 in November 2024 and for $26,219,000 fourteen months later. Nothing was built in between. What the second buyer paid for was a zoning change, and city records now show the building carrying $33,000,000 of debt and a Department of Buildings approval to turn 14 units into 166 apartments.

Why it matters

Midtown South rezoning turned a block of manufacturing loft buildings into residential sites without a shovel touching any of them, and 254 West 35th Street is what that looks like on the deed. For a developer hunting conversion stock, the useful number is not the purchase price but the spread between the two sales: $10,069,000 of value created by an entitlement, captured by the seller rather than by the party doing the work. The lesson for anyone still shopping this corridor is that the cheap basis is already gone, and the buyer now has to earn its return on construction rather than on paper.

The numbers

The February deed recorded at $26,219,000, against $16,150,000 in November 2024, a 62 percent increase. On August 31 the buyer recorded a $33,000,000 consolidation with Safra National Bank of New York. Only $6,000,000 of that is new money. The other $27,000,000 is an existing mortgage assigned to Safra by Levon NY XXVI LLC the same day, which is why the recorded figure overstates how much fresh capital arrived.

The building itself is 106,642 sq ft across 16 floors on a 7,406 sq ft lot, built in 1924 and classified as a factory loft. Its assessed value is $8,082,000. The alteration application, approved in August, is budgeted at $16,917,420 and lists 14 existing dwelling units against 166 proposed, with Kao Hwa Lee Architects as the applicant.

What’s next

The record names only limited liability companies on both sides of both deeds, so the principals behind the flip are not in the public file. Watch for a construction loan larger than $33,000,000, which is what a 166 unit conversion at this cost estimate would require. See our coverage of 13 Manhattan office conversions filed in six days and the New York market.