Vanishing New York on the closing of Theatresource notes that the agency representing the property says that the theater could be converted into residential.
I'm not entirely familiar with New York City zoning laws. Although I'm kinda under the impression that the theater's two floors cannot be converted into residential. There is an odd piece of the third floor (which we've already been kicked out of) which is residential but I believe it cannot be subdivided and therefore can only be rented to whomever is using the 3rd floor as his residence.
The Washington Square Park Blog has more on the sale of the property.
There's a walkthrough video of the properties which include Monk's and (what I presume to be) what was Love and even that place that was many pizzarias until it because a back-office kitchen.
The realtor has posted a bunch of information which includes the C of O for the property.
If this is true, then the Board of Theatresource has essentially locked any future theater company from taking over the space by making a deal with the landlord to hand the building over empty.