In dense urban markets, repurposing existing buildings offers a sometimes-hidden opportunity to unlock enormous value while drastically reducing the environmental impact of construction.
In the recent ULI webinar titled Breathing New Life into Old Bones, part of the 2020 ULI Spring Meeting Webinar Series, four experts in design, development, and sustainability explored the opportunities and challenges inherent in repositioning buildings.
This webinar is available on demand to ULI Full members and for purchase as part of the 2020 ULI Spring Meeting Webinar Series.
Working creatively with zoning, floor/area ratios, public incentives, and financing is key to making these projects possible. Making them successful often requires finding the design elements within the project that tell a story, creating a strong narrative for brand authenticity and reflecting the community character and history of the building.
“We often find [that older buildings] have inherent structural flexibility to adapt to multiple use types, and there is a historic narrative that establishes sense of place and character that creates value. There’s also an embedded sustainability to using existing buildings and shells,” says Matt Stephenson, associate principal with Woods Bagot Architects.
The design, planning, and construction challenges to renovating older buildings can be complex, but value can be created by upgrading buildings from lower-income-generating uses (light industrial, manufacturing, storage, shipping) to higher-income-generating uses like residential, office, retail, or hospitality, according to Jeremy Plofker, vice president of Madison Realty Capital. “Often, the most value that can be created from an asset [comes from] combining higher-income uses with each other or with lower-income uses,” Plofker says.
The panelists presented four case studies of projects that had transformed older office, hospitality, industrial, or storage buildings to mixed-use, residential, or commercial uses with high-value amenities, rents, and energy cost savings that provided the returns needed to make the projects work.
A 1912 Manhattan office building originally inhabited by the Emigrant National Savings Bank and then by New York City government offices, 49 Chambers was converted into luxury residential apartments. New lot-line windows were added to make up for the deep floor plate, and mechanical systems in the basement and roof were consolidated to make room for a large swimming pool and roof deck. The building’s large windows and unique grand hall on the ground floor encouraged the preservation of features that would create a strong building identity.
Another project went even further in reshaping building footprints for new purposes. At Gramercy Square, a former medical center also being converted into housing, the design team noted that several buildings of the complex would block light and air for other buildings, and decided to demolish them.
“We found built areas that didn’t make sense, removed those, and moved them to where they made more sense,” Stephenson says. They relocated the resulting extra floor area atop other buildings in the complex and were even able to create an entirely new building as well, which “made the whole project commercially feasible,” he adds.
Balancing sustainability with the historical aesthetic was an important consideration on this project—since each building needed facade adjustments, the redesign included energy modeling on the building envelope to determine how to reduce energy use and expenses while keeping occupants comfortable. “We added new cladding to create light and air, with character and texture for the neighborhood, but it also performed well,” says Ben Shepherd, consultant on the project and director at Atelier Ten.
Shepherd also notes the broader opportunities for sustainability on repositioning projects. “You can look at more than just lighting retrofits; you can look at passive shading, or alternative ventilation and conditioning strategies, to dramatically lower the energy intensity of these projects and make sure things like rooftop solar systems have more bang for your buck.”
In addition, reusing old building shells is a major advantage from an emissions perspective. “Repurposing projects takes advantage of the carbon already locked up,” in existing buildings, Shepherd says. “By reusing existing foundations, structures, and enclosures, it saves carbon from being emitted to create new materials,” like concrete or steel, for new construction. The carbon emissions released to produce, transport, and install building materials are known as embodied carbon. For more on this topic, see ULI Greenprint’s Embodied Carbon in Building Materials for Real Estate report.
Repositioning projects can also respond to changing market conditions. On Union Crossing, an industrial-to-commercial conversion in the South Bronx neighborhood of New York City, Plofker notes that “there was no existing market for commercial use, especially flexible commercial use like this, so it took a little bit of a leap of faith” to embark on the project. However, based on trends in nearby neighborhoods, Madison Realty bet that the project “could meet a need that wasn’t being met.” To ensure the project would be resilient to unforeseen market shifts, the design expanded the already-large floor plates so that the space could remain as flexible as possible, and “any number of uses and types of tenants could be accommodated in the future.”
Besides using efficient windows to keep energy use and HVAC costs down, Union Crossing also made sure to use sustainable and healthy materials throughout the building, and to specify the same for tenant finishes. “It’s getting easier to do, as tenants are looking for these aspects in base building spaces, and thankfully they can be achieved with minimal price point,” Shepherd says.
These redevelopment projects are also opportunities to blend value creation and sustainability with community impact. Ponce City Market, an Atlanta warehouse converted into office, retail, and residential uses in 2015 by Jamestown Properties, achieved three separate Leadership in Energy and Environmental Design (LEED) Gold certifications and also incorporated a neighborhood employment program and workforce housing, which was a key part of “becoming integrated into the fabric of the community,” according to Becca Rushin, vice president of sustainability and social responsibility at Jamestown.
Successful projects like Ponce can even stimulate neighborhood-wide redevelopment. “This was the first project in what was essentially an abandoned block, and [since then] we’ve seen a huge boom in the neighborhood—lots of residential construction—and as we’ve proven the market for class A office space, we’ve seen a lot more office products being constructed as well,” Rushin says.
Overall, building repositioning may take on even greater importance in the post-coronavirus city, as doubt may be sown about the value inherent in dense cities. “As urbanists, we still believe cities serve a really important function as places to gather and share ideas,” Stephenson says. “The quality of these buildings and spaces will continue to play an essential role in framing public and private moments in the future.”
https://urbanland.uli.org/sustainability/the-new-old-real-estate-capturing-value-sustainability-and-community-impact-by-repositioning-older-buildings/
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