CSC Real Estate Secures $108M Construction Loan for 770 Second Avenue Conversion

Why It Matters

The financing signals strong institutional confidence in office‑to‑residential conversions, a key source of new rental housing in a market facing chronic supply constraints. Delivering affordable units also aligns with city policy goals, enhancing CSC’s reputation and potential for future projects.

Key Takeaways

• CSC secured $108M loan for 770 Second Ave conversion.
• Project will deliver 140 units, 35 affordable, by Q1 2027.
• 12 floors of 18-story building repurposed under NYC 467 program.
• Institutional lenders show strong appetite for Manhattan office conversions.
• Sale of a $22M office condo unit signals mixed-use strategy.

Pulse Analysis

Manhattan’s office‑to‑residential conversion wave has accelerated as vacancy rates climb and developers hunt for higher‑yielding assets. The city’s 467 program, offering up to 35 years of tax exemption for converting non‑residential space into rental housing, has become a catalyst for projects that blend market‑rate and affordable units. This policy backdrop, combined with limited new construction land, makes adaptive reuse an attractive path for investors seeking both returns and regulatory goodwill.

CSC Real Estate’s latest venture at 770 Second Avenue exemplifies the model. After acquiring the building for $52 million, CSC secured a $108 million construction loan, underscoring the depth of capital available for well‑located conversions. The plan to transform 12 of the 18 floors into 140 apartments—35 of which are earmarked as affordable—adds critical housing stock to Murray Hill, a neighborhood with rising demand from young professionals. The inclusion of 11,000 sq ft of amenity space and a projected Q1 2027 completion date positions the project to capture near‑term rental premiums while meeting city affordability mandates.

The transaction also reflects broader market dynamics. Institutional lenders, represented by SCALE Lending, are actively financing conversion projects, signaling confidence that the office surplus can be monetized through residential demand. The recent $22 million sale of an office condo unit within the same building suggests owners are adopting hybrid strategies to maximize asset value. As the office market continues to recalibrate, developers who can efficiently repurpose space while delivering affordable housing are likely to secure a competitive edge and attract further investment.

Deal Summary

New York‑based CSC Real Estate has secured a $108 million construction loan from SCALE Lending to fund the office‑to‑residential conversion of 770 Second Avenue in Manhattan. The loan, arranged by Arrow Real Estate Advisors, will finance the transformation of 12 floors into 140 rental units, with completion expected in early 2027.