TF Cornerstone, Dune Real Estate Form $1B Venture For Office Conversions
With the rate of office-to-residential conversions accelerating, a new venture has formed with plans to pursue $1B of the notoriously complex developments.
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.
