Capstone Equities and BH3 Fund Advisors have obtained a $208 million construction loan for the office-to-residential conversion of 141 Willoughby Street, a 24-story, 355,000-square-foot office tower in downtown Brooklyn. The loan was originated by Northwind Group, a Manhattan-based real estate private equity firm and debt fund manager.
The property, which was delivered in 2023 to full Class A institutional specs, has never been occupied. This allows the conversion to proceed without tenant buyouts, deferred maintenance, or other structural work. They took control of 141 Willoughby in 2025.
The building’s configuration and nearly column-free floorplates will allow for a more efficient conversion, according to the developers. Slab-to-slab heights of 15 feet to 17 feet will result in finished ceilings measuring out well above those within standard new construction. Common-area amenities for the residential space will include a fitness center, entertainment lounge, coworking space, and wellness center.
The residential component will feature 239 rental apartments from floors 8 through 23, while the first through seventh floors will remain as commercial space, except for amenity space on the second floor. The commercial component will operate with its own separate entrances and dedicated elevator bank. Fogarty Finger, the original design architect, has been re-engaged as executive architect for the residential conversion.
New York remains a hotspot for office-to-residential conversions, with 324.8 million square feet of office space suitable for conversion, according to a report from earlier this year. The New York metro area leads the nation in such conversions, with 2025 representing a near doubling of conversion activity in the region compared to the previous year.
At the start of 2026, 90,300 apartments were in the process of being created through conversion nationwide, up 28 percent from a year earlier. Strong housing demand and a sizable stock of older office buildings with adaptable layouts drive this trend. The conversion of 141 Willoughby Street is one example of this trend, which is expected to continue in the coming years.
Capstone Equities and BH3 Fund Advisors are proceeding with the conversion, which will result in a unique residential offering. They are redeveloping the property to meet the demand for housing in the area. The project is expected to be completed in the near future, providing new residential units to the market.