Since 1997, Berman, through his firm, Metro Loft Management, has turned eight Manhattan office towers into rental-apartment complexes, adding some five thousand units to the city’s housing stock. His company has just signed a contract for the largest conversion yet in the United States: Pfizer’s former headquarters, on East Forty-second Street, will be refashioned to house about fifteen hundred apartments. Berman has no patience for nostalgia. “You’re tearing down something that simply doesn’t work anymore,” he explained. Although Metro Loft has offices at 40 Wall Street, Berman often works at home himself, on the Upper East Side. He happily spends hours poring over blueprints, dividing former fields of cubicles into small but clever residences and reconceiving onetime copy-machine nooks as mini laundry rooms or skinny kitchens. All his apartments are market-rate properties, so what he creates is élite but ordinary, luxurious but cramped, permanent but marginal. Avinash Malhotra, an architect who has done several conversions with Berman, noted that a single office tower can be carved up into hundreds of little units, as in a hotel. “He is not making housing for the homeless,” Malhotra said. “But I often joke among my employees that what we do is slums for the rich.” One day in December, I went to the financial district and joined Berman in the stark white lobby of 55 Broad Street, a thirty-story former office tower that was built in 1967 by Emery Roth & Sons. Berman has started converting it into five hundred and seventy-one apartments, many of them studios aimed at professionals just out of college. Scaffolding surrounded the bottom of the tower, imprisoning a Starbucks by the entrance. Berman dresses to understated effect. He wore a quiet-luxury ensemble—unzipped Brunello Cucinelli vest, Loro Piana sweater, John Lobb shoes—and carried nothing in his hands but his phone. He was overhauling 55 Broad Street under complicated conditions: it still had office tenants inside. The day we visited, five of the floors were still occupied by companies that had not yet left. (One, a property-management outfit called Solstice Residential Group, even sued to stay, but ultimately settled and moved nearby.) Every so often, an office worker rushed through the lobby, looking as lonely as a ghost. The entrance was renovated twenty years ago by the building’s original owners—the Rudin family, a New York real-estate powerhouse—and featured a revolving door, white marble walls, harsh Kubrickian lighting, and a long security credenza. Berman said that he would put in a hinged door, lower the lighting, cover the walls with wood panelling, add a fireplace and an inviting couch or two, and install wide stairs that flowed down to amenity rooms on the floor below. “Walking into the building will seem like walking into a lounge that people are hanging out in,” he told me. “And you just happen to be one of the people that lives here.” In New York, the rebound has been stronger. On Wall Street, where numerous executives have expressed sharp impatience with remote work—David Solomon, the C.E.O. of Goldman Sachs, has called it an “aberration” that undercuts the company’s “collaborative apprenticeship culture”—foot traffic has returned to eighty per cent of its pre-pandemic level. But on Mondays and Fridays many Manhattan towers become as sparsely populated as an Edward Hopper painting. Some company accountants have started to see the rental of large office spaces—which in New York can cost more than three hundred dollars per square foot—as a colossal waste. In lower Manhattan, major renters such as Spotify and Meta have begun shrinking their footprints, vacating entire floors that once bustled with employees. For the past three years, about twenty-two per cent of office space in New York has gone unrented—that’s a hundred million vacant square feet, the equivalent of nearly thirty-five Empire State Buildings. For the owners of half-empty towers, it’s become increasingly apparent that a new financial strategy is needed. Berman has helped show desperate office-tower owners a way out. Although fewer people may want to work in Manhattan, more than enough still want to live there. The over-all vacancy rate for apartments in the city is now 1.4 per cent—the tightest market in fifty years. The reasons that the city’s work and residential fortunes have not moved in step are various. “There is only one New York,” Berman told me. “Culture, diversity, business, technology, medicine, education—all in one small island.” New York remains a place where many ambitious young people go to start their careers, if not to stay, and this demographic is ideal for the hotel-style conversions for which office towers are most suitable. Moreover, Berman said, “young people are social—they don’t want to sit in the middle of a forest on a Zoom call.” Converting offices into apartments won’t be a panacea for New York’s real-estate titans: there is simply too much square footage that is going unused, and this will be a problem as long as companies continue switching to smaller premises. Berman told me, “If we ultimately absorb twenty per cent of the office space, that would be optimistic.” But, he added, conversions will energize neighborhoods that otherwise would be among the worst hit, like the financial district. There, Berman foresees apartments replacing half the empty offices. The result at 55 Broad was a dark curtain-wall tower with windows and brown panels spaced between thick steel pinstripes. Deep rectangular floors were set back every ten stories, creating a three-tiered wedding cake. Two renovations followed over the decades, but the building remained what it had always been: a dull stack of boxes. Shortly after the Rudins built the tower, they attracted as its anchor tenant Goldman Sachs, which was then in a period of wild ascent. Four years after the building opened, a Times reporter dropped by Goldman and excitedly described an “assemblage of young men with longish haircuts and bright colored shirts” on a trading floor that “rips with action.” Goldman was so successful that it eventually built its own building, two blocks south, leaving 55 Broad half empty. In 1985, Drexel Burnham Lambert, the firm that pioneered the junk bond, moved in. Within five years, it had fallen under indictment and gone bankrupt, forcing the Rudins to scramble again. The family spent millions to make 55 Broad into a state-of-the-art tech hub, borrowing strategies from “Being Digital,” by the nineties tech guru Nicholas Negroponte. Broadband was installed on every floor, and for a time the mid-century structure was “one of the most wired in the world,” according to Forbes. This incarnation lasted until the dot-com bust of 2000, when many of 55 Broad’s tenants went under or moved out. In the next decade, terabytes replaced gigabytes, and the number of servers that a cutting-edge tech firm needed could have taken up an entire warehouse. In 2014, plans were leaked for a proposed fifty-three-story replacement at 55 Broad, but it was never built. A lot of time and money is required to safely dismantle a thirty-story tower on a narrow, busy street. Six years later, the pandemic hollowed out the city, particularly the business districts. By July, 2023, the Rudins had concluded that 55 Broad—then only sixty per cent rented—had no future as an office tower. They sold most of their interest in the building to Berman, keeping a small part so they could observe how he handled conversions. (Silverstein Properties, which rebuilt the World Trade Center, also became a partner in the project.) The decision to convert to residential was a hard one for the Rudins. “We don’t like selling our buildings,” Bill Rudin, one of the chairs of the family’s company, told me. “That’s kind of a mantra for us.” The opportunity to learn from Berman was a big factor: “We wanted to see the maestro, like a front-row seat to see Leonard Bernstein.” The sale price for 55 Broad was $172.5 million. The construction loan was set at two hundred and twenty million dollars. The total cost of the project—nearly four hundred million dollars—was considerable, but replacing the office tower with a new building, Berman told me, would have cost “well over six hundred million.” (Upgrading it in the hope of attracting new office tenants, according to Berman, would have cost roughly eighty million dollars.) And, because of zoning reforms, no new building would be allowed to overwhelm a Manhattan street the way the hulking towers of the postwar period did. A developer who constructed a tower the same height as 55 Broad would likely have to sacrifice twenty per cent of the rentable space. Early in the conversion process, Berman’s construction team removed the fluorescent-tube lighting and the dropped PVC ceilings. Then workers knocked down the drywall that had once delineated corner offices, windowless offices, rest rooms, mop closets. “We do a very thorough gut renovation,” Berman told me. “We literally take everything out.” At 55 Broad, the result was nearly four hundred thousand square feet of raw space, with a potential to generate more than thirty million dollars in rental income annually. But Berman still had a major puzzle to solve: If no one wanted to work in a glum, out-of-date building, why would anyone want to live there? A visit to the sixth floor offered a bleak sight—it was an empty, dark space half the size of a football field, interrupted only by steel support beams and rusted copper waste pipes. The floor was unsealed concrete, and transverse beams along the ceiling were coated with intumescent paint, a fire-resistant covering that looks like bubbling-hot marshmallow. When I stood at the center of the building, the windows were so far away that they looked almost like portholes. Berman gave me a detailed tour of the thirteenth floor. In his business, a crucial metric for turning a profit is the time lag between borrowing construction money and renting out units. So he works fast. Just four months had passed since Berman, Silverstein, and Rudin had closed their deal, but the thirteenth floor already felt like part of a new apartment complex. Workers were measuring, drilling, staple-gunning. Metal track had been laid down where new walls would go, and a few drywall panels had already been installed—they were covered in a playful-looking purple glaze, to make them resistant to mold. “It’s a little bit more expensive,” Berman said. “But we don’t want any issues down the road.” On one piece of drywall, “Apt. 10” was scratched in pen. There was even a handsome tub in a bathroom without walls, like a guest who’d arrived too early for a party. Renters are now used to the layouts of chain hotels, where there’s one window by the bed, so Berman’s bathrooms and kitchens didn’t need to be sunny, and the kitchens could have a minimal footprint. “Our demographic doesn’t cook,” he said. He referred to the other rooms without windows as “home offices.” Now that working from home was common, I observed, such spaces were likely to get a lot of use. He smiled, then said that many would wind up as bedrooms. This is technically forbidden, because in New York City every bedroom must have a window that can be opened, but it’s a widespread practice nonetheless. Berman laid out a rental scenario: “Imagine two or three Goldman Sachs associates who came to New York just after college and want a little bit more spending money.” (In real-estate ads, a one-bedroom with a windowless office is often called a “convertible two-bedroom.”) Berman told me that he could repurpose any office building to residential if the sale price was right. But he acknowledged that 55 Broad posed special challenges. Until the mid-twenty-tens, office-tower conversions in Manhattan mostly involved prewar buildings. These had narrow, smaller floors that divided easily into apartments, and because they were built before air-conditioning they often had courtyards or ventilation shafts. You therefore didn’t have to create odd layouts to give bedrooms some sun. (Natural light tends to peter out about thirty feet into a building’s interior.) Prewar buildings were also full of setbacks, which could become private terraces, and they had oak-panelled elevators that felt homey. I had recently visited the first such building to undergo a major office-to-residence conversion in the financial district, 55 Liberty Street, which long served as the headquarters of Sinclair Oil Corporation. An architect named Joseph Pell Lombardi had converted the building in 1980. I checked out the apartment of one of the first purchasers, on the twenty-third floor. The view was magnificent in three directions, the vista broken only by the gargoyles that the original architect, Henry Ives Cobb, had mounted on the Gothic Revival façade. Looking down from one window, I saw the august Federal Reserve Bank, with its vaults full of gold bars. The view matched the fantasy we all have of living in New York. As the architect Robert A. M. Stern told the Times in 1996, “Who doesn’t want to live in a skyscraper? Everybody in movies lives in apartments on the top of Manhattan.” But few towers like 55 Liberty remain available for conversion in the financial district. What are left are postwar structures—many with deep, dark interiors, low ceilings, and scant visual appeal. Berman did what he could to add comfort to such buildings while holding on to his wallet. He could repurpose extra elevator shafts as garbage chutes, for example. In one building, he turned elevator-shaft spaces into foyers for a line of apartments. The double-height mechanical floor of 55 Broad, which once contained giant heating and cooling systems, would be turned into two floors of apartments. Residents would be provided with compact HVAC units under certain windows, as in a motel. These units required much less space than the old systems, and were far more energy-efficient. Berman noted that 55 Broad would be the first all-electric, emission-free apartment building in Manhattan. This was not only environmentally beneficial; it also saved him the cost of inserting thousands of feet of piping into concrete floors. It was but one example of how Berman’s monetary interest and the common good conveniently aligned. We looked out a window at an adjacent nondescript office building, and he saw prey. “That’s going to be that way for maybe three to five more years,” he predicted. “That building will be converted, too.” Adaptive reuse is a form of recycling, a point that Berman often makes. According to a recent paper by the National Bureau of Economic Research, converting an out-of-date office building into an apartment complex can increase its energy efficiency by as much as eighty per cent. (In a residential building, not everyone blasts the air-conditioning 24/7.) According to a report by the Arup Group, an engineering firm, converting a Manhattan office tower releases, on average, less than half the carbon that building one from scratch does. As expensive as these projects may seem, the cheaper cost of repurposing an old building can allow rental prices to be set lower than they would be in a new one. Berman estimated the minimum monthly rent for a studio apartment in a new lower-Manhattan building at well over four thousand dollars, whereas a comparable apartment in 55 Broad will go for about thirty-five hundred. Although this is a considerable sum for one person, it’s not especially expensive by Manhattan standards, and, as Berman acknowledged, many of his units will end up being shared. He stressed to me that he is not particularly interested in what goes on inside the apartments, or in what the tenant experience is like. “A renter is not a condominium owner,” he told me several times. He isn’t trying to re-create 443 Greenwich Street, his celebrity-friendly condo development, with its wine cellar and tiled hammam. “Our profile is a young person,” he said. “Maybe twenty-four, twenty-five, who stays one or two years, maybe three. They’re not committing.” His clients are in the city-hopping phase of life: “ ‘O.K., next year, the year is up and I’m going because I need to be in Boston, or I need to be in Chicago, or I’m going to San Francisco.’ ” Berman had considered improving 55 Broad’s dated façade, but decided that it was money poorly spent. “Renters pay less attention to these things,” he said. New York renters don’t have much choice, anyway. “We’ve never had this kind of imbalance between demand and supply before,” Berman said, with the pleasure of a person who likes his odds. The vacancy rate in the five or so buildings that he currently owns is about one and a half per cent. He estimated that all the units at 55 Broad would be rented within six months of going on the market. A few of Berman’s redevelopment schemes have been more architecturally adventurous. In 2017, he worked with Avinash Malhotra to convert 180 Water Street, also in the financial district. The building, like 55 Broad, was a thick rectangular slab designed by Emery Roth & Sons, and had interior spaces more than seventy feet long. Berman could have rented out these extra-long apartments as they were, but instead he decided to remove the core of the building, where mechanical equipment was taking up space, thereby creating a courtyard and cutting the apartment layouts down to normal length. Though such a restructuring had never been tried before, he took the risk, at a cost of several million dollars. The result gave tenants more light, he said, but that was incidental. New York City law permitted him to add the removed square footage to the top of the building—he gained four floors and a roof with a pool. “If I couldn’t have done that, I wouldn’t have had cost-efficient units,” he said. Whereas Berman focusses on the architect Cass Gilbert’s definition of the skyscraper as a “machine that makes the land pay,” Cetra and Ruddy emphasize pleasure. Cetra showed me his floor plan for 55 Broad: apartments curled around apartments like frolicsome seals. He explained that he and Ruddy always sought the “wow factor,” adding, “Ideally, in as many apartments as you can, when you open the door you see light and you walk toward light.” Shiny wood floors would have heightened this effect, but, Cetra noted a bit sheepishly, the floors at 55 Broad would be covered in something called “vinyl plank flooring.” Wood scuffs too easily in a building where people are constantly moving in and out, and, Cetra said, vinyl flooring was getting better. “They’re able to create patterns that don’t repeat,” he said. Ruddy said that it was fun to fit apartment layouts into the constraints set by an office tower’s shape—each unit had “the intricacy of a watch.” She recounted a notable success for which they’d won an award. In 2014, while converting the former Flatotel, on Fifty-second Street, into condos, they had reconfigured an old loading dock—a concrete area where trucks parked and dumpsters were stored—into a new mid-block entrance. “We created this sort of magical lobby out of it,” Ruddy said. “I don’t think anyone had ever converted a loading dock before.” Cetra jabbed at his floor plan for 55 Broad to amplify the point: “If this were a new building, every one-bedroom would be exactly the same. But look here. This is a one-bedroom, that’s a studio, that’s a one-bedroom studio, and every one has different proportions.” (A resident of 20 Broad Street, an earlier project that Cetra and Ruddy developed with Berman, complained to Bloomberg News last year about her studio: “It was a very awkward space. It wasn’t square, it wasn’t a rectangle, it had all kinds of bizarre edges and weird corners.”) One feature would be standard at 55 Broad: a washer and dryer. “People do their laundry in their pajamas or their underwear while they’re watching television,” Ruddy explained. In the basement, public space that might otherwise be devoted to a large communal laundry room would be aimed at helping tenants meet one another. Small apartments make people want amenities, and amenities make people accept small apartments. The new generation expects post-college life to resemble college. “We’re in an amenities war,” Ruddy said. All the buildings converted in the financial district are full of co-working spaces, gyms, and plush couches. One of Cetra and Ruddy’s signature moves, they told me, is to adorn a public space with a modular shelving unit that contains small sculptures and ceramics that “feel like they could have been picked up on a trip overseas.” The architects also include a pile of art books—“Jazzlife,” “Helmut Newton: Work,” a book of Ai Weiwei’s installations. I objected that these seemed like the sorts of books people never actually read, but they disagreed. Tenants did pull them down. In fact, Cetra and Ruddy told me, the books at AVA DoBro, a new apartment building in downtown Brooklyn that they had designed, once disappeared entirely. “It turned out it was a construction worker who had grown up without books,” Ruddy said. “So I replaced them.” “They’re good books,” Cetra added. We went to 55 Broad’s roof, where we stood in front of a long, empty concrete pit. Ruddy pulled out an iPad to show me a rendering of a future pool: eleven by forty-five feet, set off by a dozen deck chairs facing east and a tasteful border of shrubs to increase, as Ruddy said, “connectivity with nature.” There was what looked to me like a pool house but turned out to be “an indoor-outdoor working space.” The 55 Broad tower is four hundred feet tall, but in the financial district that makes it midsize. I pointed out that remnant workers in the neighboring towers could easily peek out their office windows and observe whatever action was ripping on 55 Broad’s rooftop. Cetra said, “That’s part of the fun!” Back then, there were no restaurants or stores open after business hours, not even a Blimpie. Joseph Pell Lombardi’s son, Michael, who grew up at 55 Liberty Street—the building next to the Federal Reserve—also remembers the streets being empty at night, with guards moving pallets of gold bars. “It all seemed incredibly casual,” Michael remembered. “There was no one around, only me, a kid, imagining how easy it would be just to take one of them.” Census figures from 1970 show that just eight hundred and thirty-three people lived south of Chambers Street. By the time I began visiting my father’s place, there were more—but not many. “The jury is still out,” Henry Robbins, an expert on real-estate trends, told the Times in 1996, in an article about living in the financial district. “The area dies at night. It needs a neighborhood, a community.” Thanks in part to Berman, the financial district now has enough population density to feel like a proper New York neighborhood. His office at 40 Wall Street is on the seventeenth floor, and he can see five of his converted towers out the window. Within just a few blocks of 55 Broad, he has turned 20 Exchange Place, 63 Wall Street, 67 Wall Street, 180 Water Street, and 20 Broad Street into apartment buildings. He is currently working on 25 Water Street, the former headquarters of J. P. Morgan, which, after the Pfizer building, will be the second-largest conversion to date in the United States, with Cetra and Ruddy helping him design thirteen hundred units. Crain’s New York Business has called Berman “the king of FiDi.” He enjoys his stature as a local potentate. He began his conversion business in the late nineties, after receiving an eighty-thousand-dollar loan from his father-in-law. For a time, Berman was an outlier as a developer, focussing on a market that others found too small or insufficiently profitable. Now he is turning away projects. David Marks, the executive at Silverstein Properties who is developing 55 Broad Street with Berman, said, “For many years—and I’m quoting Nathan—he was the quirky monster that no one really understood, and now he’s the prettiest girl on the dance floor and everyone wants a dance with him.” Berman can decide almost instantly—just by knowing the age and the location of a building and by glancing at Google Earth—if the place is ripe for conversion. “If the price per pound is right, I say, ‘Let’s go,’ ” he said. Berman, who was born in Ukraine and came to New York at the age of fourteen, is the child of a Holocaust survivor, and the niche he occupies in the city’s real-estate ecology makes sense for an immigrant with a mistrust of government. He focusses only on buildings built before certain years—1977 below Murray Street, and 1961 for the rest of Manhattan—because they can be converted without special variances. (Conversions have long been restricted in Manhattan because sudden population surges in residential neighborhoods can crowd schools and overwhelm public transport.) “Life is short,” he told me. “I don’t want to wait two or three years for rezoning.” A current zoning-change proposal, which Mayor Eric Adams supports, would allow any building in New York built before 1990 to be converted. It would add to the pool of potential apartments nearly as much office space as there is in all of Philadelphia. Berman hopes that the zoning change will become law by the end of the year. After we left 55 Broad, Berman took me on a tour of two of his other properties. We started down the street, at 20 Broad, once a part of the Stock Exchange. We briefly visited an apartment, but the showpiece was the sub-lobby level. There was a commercial-size gym replete with punching bags, elliptical trainers, free-weight racks, and rows of treadmills. Another room held pool tables, and a third was a library graced with one of Cetra and Ruddy’s modular shelving units. Nobody seemed older than thirty-five. Down the hall was a vault with heavy iron bars where bonds had once been stored. Rather than pull the huge structure out, Cetra and Ruddy had set up a co-working space in it. (“Tenants sometimes play poker there now.”) As we left, Berman took the massive door and swung it on its massive hinges, eager to show me that it still worked. We walked down Beaver and Pearl Streets to 180 Water Street, the building from which Berman had removed the core. At the entrance, he said, “I will challenge you to show me any elements in this interior where you can point out and say, ‘Gee, that’s really from the office period.’ ” I couldn’t. He boasted that he’d never lost that bet. In the elevator, we met a young resident. She had a dog and said that she had been in the building for more than five years. Berman seemed disappointed. On the twelfth floor, near another modular shelving unit, there was a bright-white machine labelled “Tulu: Your Smart Rental Store.” Using your phone, you could rent household items like a toaster or a vacuum cleaner, or buy something you’d run out of: tampons, Tide Pods, Doritos. It was a clever way to both justify small closets—“Nathan believes in very compact closets,” Ruddy told me—and monetize how people live now. “These people want to snack at night,” Berman said. Afterward, I walked out into the early FiDi night. I turned onto Exchange Place, where I passed crowds of tourists taking pictures of Kristen Visbal’s “Fearless Girl” statue. Various restaurants were filling up, from beer halls like Trinity Place to steak houses like the recently renovated Delmonico’s. Stone Street was now a sort of food court, and I could have picked up groceries at a Whole Foods just north of Exchange Place. (My father would have had to go to the Village to get groceries, if he’d wanted any.) The street life died out at Chambers Street, where government offices stood dark and empty. It was as if the original Dutch settlement had been re-created, back when Wall Street had a wall. In a 2022 Glassdoor post, a user called McKinsey Consultant asked, “Should I live in FiDi?” The responses included a lot of cheering for the rooftop pools and the great views. But a user called IBM1 advised living somewhere else. “It’s such a soulless neighborhood,” IBM1 wrote. “Don’t be swayed by the ultra luxe buildings.” It’s true that FiDi remains on the sterile side. It could use some parks, and its inhabitants seem either new to the island or temporary. All those amenities in the buildings keep people within their confines; if you have a Tulu dispensing machine in your basement, who needs to drop by a local hardware store or a pharmacy? All the same, more than thirty thousand people now live in FiDi—and at least some of them have begun to see it as a permanent home. Berman told me that, whereas more than half of his renters used to be apartment sharers, he expected the percentage at 55 Broad Street to be closer to fifteen. This suggested to him that families were moving in. He added that he recently ripped out a Ping-Pong room at 180 Water and turned it into a children’s play space. “We have sixty children in the building!” he said, amazed. One was his grandson. His son, who is the No. 2 at the firm, and his daughter-in-law moved in five years ago. “They never left,” Berman said. ♦
