Following its sale, one of the tallest office buildings in Trenton will be repurposed as an apartment building.

That’s according to an Oct. 10 announcement from Hamilton-based Fennelly Associates, which said it negotiated the sale of 240 W. State St., a 240,000-square-foot office building in the state’s capital.

Fennelly Associates President Jerry Fennelly represented the seller, Garden State Commercial Properties, and the unnamed buyer in the transaction. Financial terms were not disclosed.

According to independent full-service commercial real estate firm Fennelly Associates, new ownership intends to transform the 16-story property into a multifamily building with a planned 2026 delivery. When it was built in 1969, the property was used as a hotel.

As housing demand persists and interest in new product rises in Trenton, Fennelly Associates said it worked to attract a buyer that was interested in the adaptive reuse of 240 W. State St. The firm was tapped to market the property last May. At that time, it was listed at $6 million.

“For decades, we have harnessed our expertise and creativity to bring investments and businesses into Trenton,” Fennelly stated. “We were honored to bring the sale of 240 W. State St. across the finish line, and we are excited to watch its transformation into a point of pride for the local community.”

Conversions, as well as demolition, have helped to aid the removal of obsolete office stock from the market as the sector struggles to find its footing following upheaval from the onset of the COVID-19 pandemic.

Research for the third quarter of the year released Oct. 9 by CBRE shows just how much the office sector has slowed. For the period, total leasing was down by 44% over the second quarter and the state posted negative net absorption of 288,000 square feet, the commercial real estate services and investment firm said. In Central Jersey, leasing was down more sharply, by 57%, over Q2.

According to CBRE, 2.6 million square feet of office space inventory has been removed in New Jersey year-to-date.

Despite the changing office landscape, employers are also making the move to Trenton, like Taft Communications. When the communications consultancy announced in April that it would move its headquarters to the new Roebling Center, the company said the location would allow it to meet the changing needs of the workforce, relocating to an area with access to public transportation.

Situated at the intersection of Calhoun Street, West State Street and Route 29, the reimagined building will be located less than 2 miles from the Trenton Transit Center and the West Trenton Train Station, offering prospective residents connectivity that includes access to both New York City and Philadelphia.

Fennelly Associates said the buyer plans to include a mix of studio, one- and two-bedroom apartments at the site complemented by an amenity package that includes a fitness center, pool and ground-level cafe. Renovations will also be applied to the property’s enclosed parking garage.