“[Regular people are] competing against the largest private equity firm in the world to purchase a home,” Ocasio-Cortez said. “In fact, companies like Blackstone, Zillow and Bedrock are buying up to 15 percent of available homes – but what I find interesting here is that they’re purchasing them in minority and low-income neighborhoods specifically.”
“Salvaged from old buildings or junkyards, these items ensure a home’s uniqueness,” says George DeMarco, real estate agent with Halstead Manhattan, “and can boost resale value if done well. Walking into new construction and seeing a blast from the architectural past often can make just enough difference in the buyer’s mind to help make the sale.”
Above: Lincoln Union, built in 1970, is located at 475 E. Lincoln St. in the Phoenix warehouse district and was a former refrigerated distribution center owned by Pearce Beverage Co., which was the first Coors distributor in the Valley.
Adaptive reuse is making a big impact on commercial real estate and likely will for several years to come. According to the Urban Land Institute’s Emerging Trends in Real Estate (2019), the repurposing trend is likely to continue over the next decade. As real estate professionals, we had better be prepared to adapt.
A model interior at Six Cortlandt Alley — a five-unit condo developed by Ryan Kaplan that’s set within a former factory. Halstead Property Development Marketing
“We actually have several locations within the building where you can see the original fabric of the property,” says Ryan Kaplan, a partner at Imperial. “We wanted to remind people from the moment they step into the building and up until they get to their apartment that there is a history here that can’t be replicated in a new building.”
“The conversion of a property from industrial or retail use to creative office has become an increasingly popular value-add strategy for investors,” Transwestern’s Michael Soto, director of research in Southern California and co-author of the report, said in a statement. “Two trends are fueling demand for this type of differentiated office product: One, technology, advertising, media and other companies trying to attract millennials are interested in the characteristic features of creative office space—open floor plans, natural lighting, common spaces and amenities such as cafés and rec rooms. And two, tenants are returning to cities, where they can take advantage of live/work/play environments.”
The approximately $100 million project will be financed through a combination of Low-Income Housing Tax Credits, Federal and State Historic Tax Credits, and other sources. “These tax credits make the project feasible from our perspective,” Condas says. Dominium specializes in affordable and workforce housing, as well as the adaptive reuse of historic structures.
“Projects like this one take an incredible investment from a construction cost standpoint, in order to make them work,” Condas says. “Without that stack of tax credits, the project wouldn’t be do-able.”
(Photo: Richard Montgomery)
Why does adaptive reuse attract investors? Investors and operators have several motives for jumping in. The primary motive is profit and gain. The idea of recycling, preservation or history is additional motivation. Another driver may be your creative side emerging and visualizing the project as a learning experience or adding another arrow to the business knowledge quiver. Regardless of the driver, determining profitably is the single most important factor.
A large section of the U.S. population is currently regaining a taste for urban living and moving from suburbs back into redeveloped cities. Many of these individuals are attracted to buildings that maintain historical elements and character, features that cannot be built from the ground up. This is true across all kinds of real estate, but none more so than office. As companies compete to attract the best talent possible, locating in a redeveloped building — with its character, charm, and amenities — is becoming a key part of recruitment and retention strategies.
The home at 3407 West 35th St., Vancouver, before demolition… All photos by Caroline Adderson
The city hopes to prevent demolition by offering incentives to keep a house, if it’s deemed to have heritage value. Builders already have the option of adding a laneway house or basement suite, for example. If the owner insists on demolition, they are now required to recycle or reuse 90 per cent of the material, a pain for developers because it slows the job down and costs more, especially since most aren’t familiar with the process. Even if a pre-1940 house isn’t deemed of particular heritage value, developers are still required to divert 75 per cent of the waste from landfills.
Several Midwestern cities have used adaptive reuse to their advantage. In Milwaukee, the site of the old Pabst brewery is gradually being redeveloped, part of which includes the new Brewhouse Inn & Suites boutique hotel. Indianapolis is currently converting the old Bush Stadium minor league ballpark into an apartment complex called Stadium Lofts.
Great article in the New York Times this week on blight in California.
Ms. McLaughlin if you are reading this, we are solidly behind you and Richmond. If there is anything we can do to help, please let us know!
The mayor’s plan would buy and refinance underwater mortgages in an attempt to save the city from more boarded-up houses. Jim Wilson/The New York Times
Ms. McLaughlin has a plan to help the many Richmond residents who owe more money on their houses than their houses are worth, but it’s one that banks like Wells Fargo, large asset managers like
Pimco and BlackRock, real estate interests and even Fannie Mae and Freddie Mac, the mortgage finance giants, have tried to quash. Her idea involves a novel use of the power of eminent domain to bail out homeowners by buying up and then forgiving mortgage debt.
But the financial institutions have warned that mortgage lending would halt in any city that tried eminent domain — and they have lobbied Congress to ensure that the threat is not an empty one. Opponents have filed federal lawsuits, while real estate interests have made robocalls to residents and sent mass mailers warning that the plan would allow “slick, politically connected” investors to “take houses on the cheap.” (The idea is actually to buy mortgages, not houses.)
This Instructional was too funny to pass up! Just be sure to make it from reclaimed materials (the author chose Home Depot).
Some fine folks where I live organized a “Zombie Walk” fundraiser and i just knew I needed to take part in that. But, I also knew my makeup skills were lacking. I needed a prop to get me through with my dignity intact. But what? I know! A striking zombie body impalement would do the trick.
John sez, “Honest Ed’s, the iconic Toronto discount store (‘There’s no place like this place. Anyplace’) is up for sale and will be closing. You may know it from its appearance in the Scott Pilgrim comic and film, but it’s been a landmark in Toronto for decades. Not a surprise, of course, since it doesn’t really fit in to today’s retail landscape (they have real hand painted signs for all their prices painted by real honest to god sign painters that they employ full time) but of course, that’s why it’s such an amazing place. It will likely be replaced by yet another condo with ground floor stores that could be in any city in the world and a little bit more of Toronto’s personality will be gone.”