The American International Building at 70 Pine Street in New York. An Art Deco hypodermic needle designed by Clinton & Russell and Holton & George.(Photo:epicharmus)

The New York headquarters of troubled 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 developer Young Woo.

Woo bought the building from AIG in May for $150 million, which is a per-square-foot cost of $105. Woo plans to sell the units for $2,000 a square foot, a price that Stevenson says is unrealistic.

But even if the sales price is half that-$1,000 a square foot-Woo would make a profit of $500-a-square-foot per unit or an average of $600,000 on each condo.

Source: The Wall Street Journal, Michael Corkery (10/08/2009)