Would You Live Above Grand Central?

MIDTOWN, NY – An “unspecified amount” of the iconic Helmsley Building, which is situated atop and adjacent to Grand Central Station in Midtown East, could be converted into apartments, according to a report in Crain’s.

Located at 230 Park Avenue between 45th and 46th Street, the Helmsley was constructed in 1929. Today it’s framed by the MetLife Building, at 200 Park Avenue, on which work began 30 years later in 1959.

Office tenants continue to depart the Helmsley, which despite its location is only 70% leased, according to Crain’s. It’s set to lose even more tenants – 15% – next year, and tenants whose leases expire in 2025 or 2026 pay “54% of the base rent at the Helmsley.”

No conversion or construction is currently planned or underway, but according to Crain's, the building's owner, Scott Rechler, wants to convert at least some amount of the Helmsley to apartments.

Empty Offices

Office-to-residential conversions are under consideration all over Manhattan, where the office vacancy reached 23.6% in the second quarter of 2024, the highest level since measurements began in 1986, according to a report published by New York State Comptroller Thomas DiNapoli earlier in August.

That’s an enormous amount of square footage.

Comptroller DiNapoli’s report found that there’s about 433 million square feet of office space in Manhattan. If 23.6% is vacant, that’s about 102 million square feet, which is about 3.6 square miles or 2,341 acres.

To put that in perspective, Central Park is 843 acres.

But turning offices into apartments isn’t as easy as you might think: it’s expensive, meaning that while trophy buildings in desirable locations – like the Helmsley – may eventually lead to some profit for building owners and developers, others may be money-losing propositions.

When conversions do occur, complicating factors include things like ceiling height, plumbing, windows, and more.

‘Some Buildings Are Film’

Scott Rechler, who holds a large portfolio of office buildings in Manhattan beyond the Helmsley – which he bought for $1.2 billion in 2015 – has begun to face the music.

“With some of [these buildings], I don’t think there’s anything we can do with them,” Rechler told the Financial Times, in 2023.

“I call it Project Kodak,” he continued, referring to film photography. “Some buildings are film, and some buildings are digital. The ones that are film, you’ve got to be realistic about it.”