Walk through the Financial District on a Tuesday afternoon and you’ll see it. 175 Water Street. It’s a massive, 31-story block of glass and steel that basically defines the skyline near the South Street Seaport. But honestly? Most people just walk right past it without realizing they’re looking at one of the biggest "problem children" in New York real estate.
It used to be the crown jewel for AIG. For decades, the American International Group ran its global empire from this spot. Now? It’s a ghost of its former self, caught in the middle of a massive identity crisis that perfectly explains why Manhattan office space is in such a weird spot right now.
What 175 Water Street New York NY Actually Is (and Isn't)
Let’s get the basics out of the way first. 175 Water Street is a 684,000-square-foot office tower. It was built in 1983, a time when "big and boxy" was the height of corporate fashion.
The building sits right on the edge of the East River, which means the views are insane. You’ve got the Brooklyn Bridge right there. But here’s the thing: nobody wants a giant, empty office building anymore. Since AIG packed up and moved to smaller, fancier digs at 1271 Avenue of the Americas a few years back, this place has been a bit of a localized headache for the city.
Metro Loft Management, led by Nathan Berman, eventually stepped in. If you know anything about NYC real estate, you know Berman is the king of office-to-residential conversions. He’s the guy who looks at a stagnant office tower and sees luxury apartments. And that’s exactly what’s happening here. The plan is to take this hulking mass of office cubicles and turn it into roughly 800 residential units.
It’s a massive undertaking.
You can’t just throw some beds in an office and call it a day. The floor plates are huge. Usually, office buildings have deep interiors where light doesn’t reach—great for server rooms, terrible for a bedroom where a human being actually has to live.
The AIG Legacy and the $270 Million Handover
For a long time, 175 Water Street was synonymous with AIG. Think back to the 2008 financial crisis. This building was the backdrop for some of the most stressful meetings in the history of American capitalism.
AIG sold the building to the Howard Hughes Corporation back in 2018 for about $270 million. At the time, everyone thought Howard Hughes would use it as a corporate headquarters or maybe leverage it for their big Seaport redevelopment project nearby.
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Plans change.
The market shifted.
The pandemic happened.
Suddenly, 700,000 square feet of office space felt less like an asset and more like an anchor. Howard Hughes eventually pivoted, and the focus shifted toward residential. It makes sense. People are desperate for housing in Lower Manhattan, and nobody is desperate for another gray cubicle farm.
Why Converting This Building Is a Total Nightmare
You’d think converting an office to an apartment would be easy. It isn't.
At 175 Water Street, the engineers are dealing with massive "core-to-window" distances. In a normal apartment, you want the window to be pretty close to the back wall so the whole place feels bright. In a giant office like this, the center of the floor is like a cave.
To fix this, developers often have to "carve" out the center of the building. Imagine taking a giant apple corer to a skyscraper. They create a courtyard or an atrium in the middle just so the interior rooms can have legally required light and air. It’s expensive. It’s loud. And it’s the only way to make 175 Water Street livable.
Then there’s the plumbing.
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Office buildings have one or two massive "wet stacks" where the bathrooms are clustered near the elevators. An apartment building needs plumbing for 20 separate kitchens and bathrooms on every single floor. You're basically rewiring the entire nervous system of a 31-story giant.
The Neighborhood Factor: Living at the Seaport
If you’re going to live at 175 Water Street, you’re basically living in the South Street Seaport’s backyard. It’s a weird, cool part of the city.
- The Good: You’re steps away from the Tin Building (Jean-Georges’ massive food hall) and some of the best outdoor dining in the city.
- The Bad: It’s a flood zone. After Hurricane Sandy, everyone in this area became very aware of how close the East River actually is.
- The Reality: The "new" 175 Water Street will have to be incredibly resilient. Modern renovations in this area now involve moving critical electrical equipment to higher floors so a storm surge doesn't knock out the power for a month.
The Business Reality of Lower Manhattan
Let's be real for a second. The reason 175 Water Street is being converted isn't just because "apartments are nice." It’s because the office market in Lower Manhattan is struggling.
According to reports from firms like Cushman & Wakefield, vacancy rates in the Financial District have stayed stubbornly high post-2020. Companies want "Class A" trophy space—the kind of stuff you find at the new World Trade Center towers or Hudson Yards. They don't want the 1980s aesthetic of 175 Water.
By flipping this to residential, the owners are basically saving the building from becoming a "zombie" property. It’s a trend we’re seeing all over the city. 25 Water Street (the old Daily News building) is doing the same thing. 160 Water Street? Same thing.
Water Street is basically turning into a giant residential corridor.
What Most People Get Wrong About the Conversion
A lot of people think these conversions will solve the affordable housing crisis.
Kinda... but not really.
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Converting an office building is so incredibly expensive that the resulting apartments are almost always luxury rentals or high-end condos. It’s hard to make the math work for "affordable" units when your construction costs are hovering around $500 to $800 per square foot.
However, by adding 800 units of supply to the neighborhood, it does take some pressure off the overall market. It’s the "filtering" effect. If the rich people move into 175 Water Street, maybe they stop outbidding you for that walk-up in the East Village. Maybe.
What’s Next for the Property?
Construction is the name of the game right now. If you walk by today, you won't see suited-up executives. You’ll see scaffolding. You’ll hear jackhammers.
The project is slated to bring a massive influx of residents to a block that used to go dark at 6:00 PM. That’s the real win for New York. The Financial District is slowly stops being a 9-to-5 neighborhood and starts being a 24/7 neighborhood.
Expect high-end amenities. We’re talking rooftop decks, fitness centers that rival Equinox, and maybe some ground-floor retail that isn't just another Duane Reade.
Actionable Insights for New Yorkers
If you're watching this building, here’s what you need to keep in mind:
- For Renters: Keep an eye on the leasing launch, likely slated for late 2025 or 2026. These large-scale conversions often offer "concessions" (like a month or two of free rent) when they first open just to fill the 800 units quickly.
- For Investors: The shift of Water Street from commercial to residential is a massive signal. The "center of gravity" for FiDi residential living is shifting toward the Seaport.
- For Commuters: The area around 175 Water is going to be a construction zone for a while. If you rely on the bus stops or bike lanes right there, factor in some extra time for detours.
- The "Flood" Check: If you're looking to move in, always ask about the building's resiliency plan. New York City building codes have changed since Sandy, and 175 Water Street's renovation will have to meet much stricter standards than the original 1983 build.
175 Water Street is more than just an address. It’s a case study in how New York City survives. It stops being one thing and starts being another because it has to. The days of AIG ruling the block are over, but the life of the building is just getting started. It’s a massive, expensive, complicated bet on the future of Manhattan—and honestly, it’s one of the most interesting projects in the city right now.
Watch the skyline. The glass is the same, but everything inside is about to change.