With the rate of office-to-residential conversions accelerating, a new venture has formed with plans to pursue $1B of the notoriously complex developments.

The former New York City FBI headquarters building converted to apartments by TF Cornerstone at 201 E. 69th St.

Dune Real Estate Partners and TF Cornerstone formed Alta Residential, a joint venture that plans to target buildings with high barriers to entry in transit-oriented residential neighborhoods. The partners are eyeing New York City, Washington, D.C., Boston, Charlotte, Raleigh, Atlanta, Dallas, San Francisco and Los Angeles, according to an announcement by the two New York City-based firms.

“Investors have reacted very positively to Alta as a means to access high quality urban residential, and we have already received significant interest from a wide range of investors,” Dune CEO Dan Neidich said in a statement.

TFC, founded by brothers Thomas and Fred Elghanayan, has developed more than 21M SF of residential and commercial properties, mostly in their hometown of New York. The company was formed in 2009 after a coin toss decided how they would break up the $3B real estate empire they owned with their brother, Henry, who runs Rockrose Development.

The private developer owns and operates nearly 12,000 residential units in Manhattan, Brooklyn and Long Island City, along with over 4M SF of commercial, office and retail space in New York, D.C., Virginia and Pennsylvania.

TFC has completed 5M SF of commercial to residential developments across 15 projects. Those conversions include 95 Horatio St., a former refrigeration facility in Manhattan’s Meatpacking District that was converted to 318 residential units, and The Fairfax, a former New York City FBI headquarters building at 201 E. 69th St., which was converted to 313 residences.

As part of the joint venture, TFC plans to oversee and partner with Alta to convert certain New York City office buildings into apartments, according to the announcement. A spokesperson couldn’t provide further details prior to publication.

In a statement, TFC CEO Thomas Elghanayan said that he is “confident that we’ll be able to scale Alta very quickly.”

Dune brings with it opportunity fundraising experience, according to the announcement. Since launching in 2005, the firm has raised over $4B of equity capital, including through its funds and other investment vehicles. It invests on behalf of public and private pension funds, sovereign wealth funds, educational endowments and other large institutions as well as high net worth investors. 

It has experience with bold projects in the city — it is a partner with Turnbridge Equities on the Bronx Logistics Center, a 1.2M SF industrial development that was one of the first multistory warehouses in the city. A deal was in place for New York City to lease or buy it for as much as $670M, but that was scuttled after a New York City Council oversight hearing looked into real estate contracts handed out by Mayor Eric Adams’ administration.

Providence-based Gilbane Development Company formed a strategic partnership with CBRE Investment Management (CBREIM) involving six purpose-built student housing properties across the country. The transaction included recapitalization of three operational communities through a GP-led secondary and three shovel-ready development projects, marking the beginning of a joint venture partnership.

The initial six communities will encompass nearly 3,000 beds. They span six Power 4 schools, with three operating communities at Clemson University, University of Illinois and Syracuse University, along with three developments at the University of Central Florida, University of California, Berkeley and University of Florida.

“This collaboration aligns with our mission to develop dynamic communities that cater to the needs of students, universities, and the surrounding communities,” said Russell Broderick, EVP, Gilbane Development.

Added Matt Tepper, head of Americas Indirect Real Estate Strategies at CBREIM, “Student housing is a target sector for us and being able to partner with Gilbane and benefit from a high-quality existing portfolio along with leveraging their extensive development capability will allow us to build something special.”

TSB Capital Advisors arranged financing and consulted on the JV partnership.

Pictured: The Laurel at Syracuse University.

A CRE veteran who helped usher in popular adaptive reuse projects in Atlanta has teamed up to form a boutique brokerage firm with another seasoned real estate pro who led Stream Realty Partners’ retail group. 

Courtesy of Bridger Properties

Bridger Properties co-founders Jack Arnold and Merritt Lancaster

Merritt Lancaster and Jack Arnold have started Bridger Properties, a full-service brokerage firm that already is managing 500K SF and leasing 2M SF across Metro Atlanta, including the ground-floor retail spaces at Spectrum on Spring apartments and the retail leasing for the mixed-use Westside Paper project, which is currently under construction.

Lancaster and Arnold established the firm in late 2020 but officially announced its formation this month.

Lancaster — whose last firm, Confluence Real Estate, was folded into Bridger — said the timing of starting up a new brokerage house in Atlanta is partly due to real estate cycles: The coronavirus pandemic may be providing an opportunity to gear up as Metro Atlanta enters a recovery that will look hugely different from the last one.

“Even though it’s a very odd real estate cycle and it doesn’t jive with the other ones, it feels like the beginning of maybe a new cycle,” Lancaster said.

Since forming, Bridger has hired a handful of other CRE professionals, including property management Vice President Chris Hicks, previously a property manager for Stream Realty and Lincoln Property Co.; Laura King, who previously headed up leasing at Paces Properties; and Shelbi Bodner, who also worked at Paces Properties and assisted in leasing Krog Street Market’s food hall.

Arnold was previously the managing director of retail for Stream Realty in Atlanta, and he acknowledged that the firm at the moment is retail-heavy in its experience. But Arnold said Bridger is scouting the brokerage world for new hires to expand its expertise into other product types, including office.

“We plan to include having all the food groups as we go,” he said.

Arnold and Lancaster said Bridger is focusing on urban mixed-use and suburban properties throughout the metro area. Its initial leasing and management portfolio includes grocery-anchored and neighborhood shopping centers in Peachtree City, Acworth, Kennesaw, Smyrna and Sandy Springs, as well as retail at the Alexan Eight West apartments near Georgia Tech.

Bridger’s co-founders also have experience with adaptive reuse projects. At Stream Realty, Arnold drove the firm’s retail and mixed-use investment activity, spearheading the acquisition of 2.1M SF of retail, office and industrial spaces in the Southeast.

In the seven years he was a principal at Paces Properties, Lancaster and Paces CEO David Cochran developed a number of Atlanta’s most notable adaptive reuse projects, including Krog Street Market, Atlanta Dairies and Optimist Hall, a food hall in Charlotte that was converted from a historic textile mill.

Lancaster said Bridger also has opportunities to penetrate into the adaptive reuse and mixed-use sectors, which have been gaining more interest among institutional investors in recent years. Institutional owners have been tapping local experts with a track record in those properties to lease up empty spaces, Lancaster said. 

Transcend CEO Patrick Braswell, who co-founded his boutique brokerage firm in Atlanta in 2015, agreed that more institutional investors are looking to work with local experts, rather than relying solely on large, multinational firms.

“To understand where to find [deals] … and what tenants would be great for it, you have to have local knowledge,” Braswell said. “And sometimes the local boutiques have more local knowledge.”

Arnold said owners are seeking more nimble, less bureaucratic firms to lease their properties, and he and his co-founder think Bridger’s mix of services will hit the sweet spot for the increasingly large funds chasing real estate deals. 

“As capital consolidates and gets larger, they will continue to need local expertise on both the service and investment side,” Lancaster said. “We have the resources on both the landlord and tenant sides within the market. … That’s hard to get if you’re in New York. If you’re not touching it, it’s hard to get that local information.”