Watermark Capital starts office-to-residential conversion at 175 Pearl Street in DUMBO

• Watermark Capital Group is converting an office building into nearly 200 residential units
• Project includes an 11-story vertical expansion, bringing the total to 19 floors
• 25% of units will be affordable under NYC’s 467m tax abatement program

What Watermark Capital is building

An office-to-residential conversion is underway at 175 Pearl Street in DUMBO, led by Watermark Capital Group. The project will transform a 1918-built office property into a mixed residential building with nearly 200 units, including condos and rentals. Plans include a major vertical expansion, adding 11 new stories to the structure. Watermark acquired the property in 2024 with a $50.6 million loan and later secured $125 million in construction financing, showing strong lender support for conversion projects.

What the design and scope mean

Designed by S. Weider Architect P.C., the building will feature a redesigned façade with floor-to-ceiling windows and modern paneling. The project includes balconies, updated amenity spaces, and a renovated sky bridge. Interior demolition is already underway as the building is repositioned for residential use.

What the tax program means for the project

The development will use New York City’s 467m tax abatement program, which supports office-to-residential conversions. In exchange for setting aside 25% of units as affordable housing, the project receives long-term tax benefits, including a 65% exemption for the first 30 years. This program is becoming a key driver for adaptive reuse projects across the city.

What the location means for demand

Located in DUMBO, the property offers strong access to transit, including the A, C, and F subway lines. Its proximity to the Brooklyn Bridge and Manhattan continues to support strong demand for both rental and condo units in the area.

What this means for developers and investors

This project highlights the growing shift toward office-to-residential conversions in New York City. Developers are targeting outdated office buildings and repositioning them into housing, supported by tax incentives and strong residential demand. Office conversions are becoming one of the most active strategies in urban CRE as supply and demand dynamics continue to evolve.