The North-east firm has landed a loan in excess of £1m from lender Assetz Capital to develop the upper three floors of the building into nine one and two-bedroom apartments, designed to “appeal to young professionals”.
The project is due to complete in autumn and mark the first in a string of local developments planned by Status Properties.
Director Alan Wallace said: “Union Street is one of the main trading streets in Scottish cities but has suffered with the downturn in retail trading. This releases the opportunity for city residential space which Status Properties will take full advantage of.
“Aberdeen is certainly a great place to be for young professionals seeking jobs after university and we hope that this development will attract more residents to the high street and wider area.”
Assetz Capital is stepping up its activity across Scotland, having recently provided a £7.2m development loan to Simply UK for a luxury care home build in Inverness.
Bruce Robertson, relationship director at Assetz Capital, added: “It has been a really exciting journey working with Status Properties on our shared vision to positively invest in the growth of the North-east economy.
"People are willing to invest in Union Street and it’s great that we can support the team to improve the quality of stock in the Aberdeen property market. This is the latest in a number of deals in the North East of Scotland, and across Scotland as a whole, which are important growth areas for Assetz Capital.”