AIG Office to Be Converted to Luxury Condos

October 13, 2009 - United States

The New York headquarters of insurer American International Group (AIG) is being converted into luxury condominiums.

In a research note released Thursday, Fox-Pitt Kelton real estate analyst Robert Stevenson calculates the profitability of the transaction for the real-estate developer who bought AIG's headquarters.

The developer, Young Woo, is planning to turn the top 40 floors of AIG's 66-story headquarters near Wall Street into pricey condominiums.

Woo bought the building from AIG in May for $150 million. That translates into a per- square-foot cost of $105.

Stevenson estimates Woo could sell condos in the building for at least $1,000 square foot. (Woo says he can sell the units for $2,000-a-square foot, but that seems high for all but the top floor units, which would command spectacular Manhattan views)

After figuring in renovations and other costs of converting office space into living quarters, Stevenson estimates Woo could turn a profit of $500 a-square-foot per unit.

The Wall Street Journal does the math which shows that even including renovations and other costs the units could generate about $600,000 in profit each.

Via The Wall Street Journal, Michael Corkery

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