alternate uses for redundant office high rises
TRANSCRIPT
2016
ALTERNATE USES FOR REDUNDANT OFFICE HIGH RISESInnovative ideas for Edmonton from around the world
Downtown Business Association of Edmonton10121 Jasper Ave NW Edmonton, AB T5J 4X6www.edmontondowntown.com
Report author Satish Narayanan
Designed by Shahina [email protected]
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ABOUT THE DBA
INTRODUCTION
FOCUS OF THE REPORT
EXAMPLES FROM AROUND THE WORLD06 Bridgehill Residences, Sydney
08 Orpheum Lofts, Phoenix
10 Brookfield Building, Kansas
12 Rembrandt Building, Amsterdam
14 The Arc At Old Colony, Chicago
16 Elsevier Office Building, Amsterdam
18 Century Building, Pittsburgh
OTHER INNOVATIVE IDEAS
CONCLUSION
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04
05
06
21
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The Downtown Business Association (DBA) was formed in 1985, [1] when the City of Edmonton identified the downtown region as a Business Revitalization Zone. Its role is to maintain and increase the real and perceived vitality of the downtown core of Edmonton. The regions that fall under this zone pan from 95 Street to 111 Street and 97 Avenue to 105 Avenue.
Through its plans and bylaws, the DBA aims to provide strong support for the economic development of downtown Edmonton, assist in implementing art and cultural programming and encourage an effective transportation network in the region.
ABOUT THE DBA
Edmonton’s downtown has seen many ups and downs in the last couple of decades, especially when considering real estate.
In the late 1990s and early 2000s, numerous office buildings in Edmonton’s downtown region were converted to hotels, residential condos and lofts. This was a result of a financial assistance program initiated by the City of Edmonton aimed at providing additional residential development in the city centre.[2]
A similar incentive program was introduced in 2010’s Capital City Downtown Plan, but it was not funded. It might be time now to look at these possibilities again.
INTRODUCTION
New Cambridge Lofts is one of many
buildings that were converted to
residential lofts.
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The problem the city is facing currently is slightly different from what happened in the early 2000s.
Then, there was a recession hit city center that was struggling to portray its potential due to office building vacancies and a ghost town like atmosphere that led to some referring to Jasper Ave as “Casper Ave”. [3]
Today, the problem is more to do with excess inventory of office spaces caused by rapid growth. Along with the rapidly growing commercial real estate in downtown, especially with the development of ICE District, there’s also an expected growth in the vacancy of office spaces.
The project this year aims to identify alternate uses for these spaces in office high rises. By highlighting examples, from around the world, of successful and unsuccessful conversions, the project will provide an overview of the possibilities that exist for building owners and developers here in Edmonton.
The kinds of buildings that are being examined in the examples all fall mostly under the Class B and Class C categories of buildings.
The table [4] provides an idea of what these categories mean.
FOCUS OF THE REPORT
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FIRST QUARTER
SECONDQUARTER
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6
8
10
12
14
16
VACANCY RATES
CLASS B
CLASS C
Buildings competing for a wide range of users with rents in the average range for the area. Building finishes are fair - good for the area and systems are adequate, but the building does not compete with Class A at the same price.
Buildings competing for tenants requiring functional space at rents below the average for the area.
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7 specific examples were shortlisted from around the world, over the course of the research period, that highlighted some key lessons Edmonton could learn from.
The examples include conversions to residential, student housing, hotels, and mixed use. Each example also includes the reason as to why it made the list.
EXAMPLES FROM AROUND THE WORLD
BRIDGEHILL RESIDENCESSydney | Residential
Starting with the opposite corner of the world. The Bridgehill Residence was converted from an office building to an 18 storey residential building in 2014.
The Tower building, located on 80 Alfred Street, was built in the 1980’s.125 apartments sold off-the-plan before the transformation was complete.[5]
All rooms are spacious and airy with high ceilings and thick laminated floor-to- ceiling glass guaranteeing whisper quiet interiors.
The location is prime, situated next to the Milsons Point Train Station. The penthouse and sub penthouse are expected to range between $6.5-million and $8.5-million when they’re put on the market on completion.
Many of these apartment units will have a view of landmarks like the Harbour bridge and the Opera House. [6] Parallels can be drawn to Edmonton where some buildings could have a view of the iconic ice district and what will be the tallest building west of Toronto - the Stantec Tower.
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Why did it make the list?
There are many similarities this building has to Edmonton’s downtown buildings 1. Located near the train station – like buildings close to LRT stations in Edmonton.2. Proximity to iconic landmarks – Roger’s Place will be close to most buildings.
Drawbacks to the Edmonton comparison
Competition with newer buildings in the premium segment.
Yibin Xu, managing director of Bridgehill properties claimed that “a new apartment with good views can be worth seven times more than what the space was worth as a dated office,” and “there are the environmental benefits. It’s far kinder on the environment to re-use as much as possible.” [7]
One advantage is that you’re able to keep the height and floor space, which avoids potential planning objections associated with overdevelopment, overshadowing or blocking views. Another advantage is that the related services and infrastructure are already in place, as well as the environmental benefits.”
JLL research shows office buildings that are suitable for conversion to apartments are attracting a premium of 15%-20% at sale time. [8]
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ORPHEUM LOFTSPhoenix | Mixed Use (Residential + Retail)
The Orpheum Lofts in Phoenix, Arizona was the first historic office building in downtown to undergo conversion into residences. [9] It earned the name because of its proximity to the Orpheum theater.
The Title & Trust building, as it was previously called, was first built in 1931. By 1998 the building was completely vacant.
The entire process of renovation took 14 months to complete. The exterior façade and the steel frame of the building was left completely intact with most of the windows and frames still in place, while the interior of the building has largely been reconfigured to accommodate living spaces (in most cases, stripped clean — walls were hacked down to expose the base-layer brick), with some new wood floors and
updated fixtures, appliances and counters (granite) installed. [10]
The amazing 11-story brick building will be retrofitted to meet future-paced technological requirements, while preserving the authentic structural magnificence of Art Deco. [11]
The conversion started in 2003 and by the end of 2004 the entire building was occupied leaving only 2 of the building’s 90 units vacant.
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The floor plans for the units range in size from 712 to 1800 sq. ft. with 1-bedroom / 1-bath to 2-bedroom / 2-bath models. Many units have tastefully designed exposed brick walls. The light rail is within a couple of blocks away. [12] The main floor of the building has 10,000 square footage of retail space.
Monthly rents originally ranged from $900 to $2200 [13] and the prices of these units ranged from $150,000 to $1.5 million. (prices now vary)
Downside
Parking inside the building does not exist. Many concerns arose because of this as parking lots were expected of a premium apartments building.
Why did it make the list?
A classic example of a conversion to residential while accommodating retail on the main floor. This is important as it is a current zoning requirement in most of Edmonton’s downtown.
Developed by: Denver Based TASB, LLC
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BROOKFIELD BUILDINGKansas | Hybrid (Hotel + Apartments)
The Brookfield building is a 12 storey office tower built in 1929 in downtown Kansas City. For years the building remained partially vacant and as of 2007, it was completely vacant. In 2012, the building and its adjacent sidewalks were completely sealed off due to falling debris from the façade of the building.
In 2014, Kansas City based Sunflower Group bought the building and initiated the process to earn historic designation for the building. The Great Lakes group showed interest in buying the building with plans to turn it into a Hotel Indigo with 113 rooms.
The hotel will span over floors two through nine, and there will be 27 apartments on floors 10, 11 and 12. It also intends to return part of the ground floor to restaurant use. [14]
In July of 2016, the deal was confirmed and the renovation process looks to be starting very soon. The initial plan was to have the entire building ready by summer 2017. With all the delays that have occurred, it looks like that might be pushed into 2018.
Estimated cost of conversion: Approximately $33.3 million.Location: Southwest corner of 11th street and Baltimore avenue
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Why did it make the list?
The rapid growth in the hotel Industry, with an expected $280-million in tax revenue/year and $570-million in direct expenditure in the hospitality industry including $130-million in hotel revenue/year between 2014 and 2018, a hotel development is justified. [16] This coupled with market rate or affordable apartments in the building could diversify the building’s use and create more avenues for revenue.
2006 2009 2012 201512%
14%
16%
18%
20%
22%
Vacancy Stabilized
A rising office vacancy rate in downtown Kansas City has been stabilized as developers convert obsolete office spaces to residential use. [15]
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REMBRANDT BUILDINGAmsterdam | Mixed use (Hotel + School + Student Housing)
The Rembrandt building is a concrete high rise built in 1973 as the main office for the AMRO bank in Amsterdam. The building has a floor count of 20 with 1 basement floor. [17] Along with a smaller extension adjacent to the main tower.
After many years, AMRO left the building, its successive occupants were GAK, Pink Roccade and Getronics.[18] The building was eventually left vacant until ZZDP Architects, a descendant of the original designer of the building, decided to work on a more suitable use for the building in 2012.
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The building was converted to a 4-star hotel with 446 rooms, a hotel school and student accommodation, all spread out between the two structures. Approximately 128,000 square feet was converted from vacant property to fully leased.
The project also involved a focus on sustainability and the hotel has a Greenkey Gold certification for positive environmental initiatives. The transformation involved installing mostly prefabricated components; these included the student rooms and bathrooms for the hotel. [19]
This radical development was completed without losing any of its original architectural power.
One of the intentions of converting the building for this use was to create more social interaction and increase the number of day and night visitors. This makes the area safer and more secure. The quality of life is said to have improved drastically in the region.
48%YES
33%MAYBE
19%NO
Would you consider Student housing if it were available in Downtown?
While 48% of the respondents were willing to move to student housing if it were available, 33% said “Maybe” and that there were other variable factors that depended on it like the cost of renting, safety in the area and traffic.
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THE ARC AT OLD COLONYChicago | Student Housing
While conversions to students housing has become fairly common in cities with a growing student population, CA Ventures, a Chicago based company was recently involved in restoring and converting the Old Colony building in the Loop in Chicago, a 17-storey office, to luxury student dormitories. [20]
The original building was built in 1893 by architecture firm Holabird and Roche in the heart of the Chicago Loop. Keith Giles, real estate developer with MCJ Development explained that with all the preservation that was required, with the building being a part of a historical district, the restoration project was complex.
The building, however, was eligible for a $10-million federal historic landmark tax credit, which eased the costs of the revitalization.
The cost of conversion was over $50-million and included furnishing of all the rooms in the entire building. Like most dorms, the rents for the students are based on the bedrooms and not the apartment; for a room in a 4-bedroom unit, the rent is about $850 a month and it goes up to $1500 a month for a room in a 2-bedroom apartment. [21]
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“Office buildings convert very well for student housing” said Allen Johnson, partner in the Chicago office of MacRostie Historic Advisors, the historic consultant for the Arc at Old Colony.
A number of universities have campuses in the downtown area. In addition, downtown has a lot to offer to students and the proximity to public transit is a bonus when they don’t have cars and don’t need to worry about parking in the area.
The housing opened its doors to its first students in August of 2015 and has only received positive feedback and reviews.
CostNo dogs
Price
Expensive
Homeless populationCrime
Parking cost
Noise
Safety
Crowd
Unsafe parts
Parking problems
Lack of grocery stores
High Cost
Unsafe
High RentLack of Public Transport
Noisy
Old Buildings
Type of Dwelling No balconies
No pets
Not livelyNot lively
Unreasonable pricing
Traffic
Congestion due to construction
Aggressive homeless people
Not safe in evening
Parking
No yard
Prohibitive cost
Lack of parking
Too much of a change
Traffic
Cost of renting
Unsafe for women
Poor connection to rest of city
SpaceHousing cost
No parks for pets
Rental cost
Crowds
Reasons to not move to Downtown Edmonton
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ELSEVIER OFFICE BUILDINGAmsterdam | Student Housing
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Another great example of student housing conversion is the Elsevier office building in Amsterdam. The 11 storey high building was built in 1964, making it a little over 50 years old when the repurposing was started in 2015.
The building had been vacant for many years. In 2012, the municipality decided to convert the function of the building to student housing in aims to ease the shortage in student accommodation in the city and to revitalize the neighbourhood. [22]
The conversion was very easy with student apartments easily fitting into the existing structure of columns and concrete floors.
The only modifications in the façade were in the north and south where windows were necessary to allow for more daylight in the rooms.
The building now houses 285 students in it’s social housing units; 80 in 2-bedrooms, 187 in private studios and 18 in the penthouse. Facilities in the basement include bicycle parking and laundry. The ground floor is being developed as a separate hostel for women.
Why did it make the list?
Student housing has growing demand in Edmonton. This is also a great example to show student housing next to the school. With universities expanding in the downtown region, there will also be an increase in demand for affordable student housing in the area.
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CENTURY BUILDINGPittsburgh | Affordable Housing / Mixed Use
The Century building in Pittsburgh, Pennsylvania was built in 1907 as an office building. In 2006, the Pittsburgh Downtown Partnership formed the Downtown Housing Working Group to promote the development of affordable and workforce housing. Following this, in 2007, the site was acquired by TREK Development Group who started the project to convert the building to affordable and mixed income apartments.
By 2009, the building had 60 apartment units consisting of studios, one bedroom and two bedroom units. [23] Pricing for the apartments varied from $800 per month for the studio to about $1800 per month for the 2-bedroom unit. [24]
More than 60% of the building’s residents are aged 30 or younger and there are no children in the building. [25] These kinds of apartments are clearly targeted at young professionals and students who want to live in Downtown but can’t normally afford a place.
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Why did it make the list?
With a number of businesses and restaurants expected to open in ICE District, there will be a number of people joining the workforce at these venues. This workforce will not be able to afford to live in downtown given the current rental rates. An initiative like the Century building conversion would cater directly to this demographic.
The main vision for this project was to have workforce housing at the heart of the city and close to where they go to work. The project was able to obtain LIHTC (Low Income Housing Tax Credits) and Historic Tax Credits. Funding assistance was also obtained through Urban Redevelopment Authority of Pittsburgh and the Allegheny County Department of Economic Development. The building was the first mixed use residential development in the city to be awarded the LEED Gold status 4 .
Most respondents were willing to pay between $700 and $1100 for a 1-bedroom unit. Only 8% were willing to pay more than $1100, which is where the current average cost falls under. (1-bedroom apartment units in the downtown area on average cost $1196 per month according to numbeo.com)
The project not only provides affordable and workforce housing for Pittsburgh’s
young professionals, but also helps ensure that downtown neighborhoods
remain vibrant and accessible.
5
0
< $500 $501 - $700 $701 - $900 $901 - $1100 > $1101
10
15
20
25
30
35
40
How much would you be willing to pay (rent) for a 1 bedroom unit in Downtown?
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In the early 2000s Hal Bastian of LA’s Downtown Center Business Improvement District was involve with leasing out apartment units in Downtown LA. The neighborhood was “beyond rough” and to “loosen it up” he started making the apartment units, dog friendly.
Almost a decade later, a demographic study [26] showed that over 40% of downtown residents owned a pet and 28% owned a dog—a clear indication of something that downtown always needed but was never explored. In an interview with the Edmonton Journal [27] on November 17, 2015, Bastian referred to dogs as the “secret sauce” for transforming a city center.
He went on to explain that they create a community by facilitating conversations between dog owners. By having more owners walking their dogs around the vicinity, it also tends to make the space livelier.
While there maybe concerns about noise and cleanliness with dogs in the apartment units there are a number of ways to accommodate this growing trend by following simple guidelines that the building owner or developer can set. [28]
OTHER INNOVATIVE USES
DOG-FRIENDLY APARTMENTS
MULTIGENERATIONAL DORMITORIES
While on the subject of housing and making communities livelier, what started off as an interesting social experiment by an non-profit organization in Chicago proved to open doors to new possibilities of dormitory arrangements. The combination of 3 college students, 9 seniors and a middle-aged couple in an Edgewater apartment unit was considered uncommon at first but based on how the residents feel, the arrangement has been very successful.[29]
The aging baby-boomer population combined with medical advancements is increasing the average age in Alberta. Seniors prefer to stay close to amenities and by having a young energetic student population to support them, this model can work well in Edmonton too.
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While Micro apartments are normally turned to as a solution to housing shortage, they can also be considered an effective option for affordable housing. In most cases, no changes need to be made to the existing layout or columns of the building.
Ranging in sizes anywhere from 225sqft to 390sqft, most components of these homes can be prefabricated and fitted in practically any space. And owing to their low space occupancy in a building, more of these can be incorporated per floor of a building and so rents for these units are normally far lower than
standard 1-bedroom and studio apartments.
Micro apartments are becoming a sort of trend across the world. Ever since Carmel Place in New York came up, a building comprising only of micro apartments, other cities like San Francisco and Boston have been quick to catch on and implement similar projects. [30] In Crystal City, Virginia, WeWork—the company that specialized in co-working spaces, launched their successful WeLive Apartments that offers micro apartments to people who prefer short term and flexible leases. [31]
These micro apartments are available in either studio units or 1-bedroom units. [32] While the apartments themselves are more along the premium line (even though they are fairly compact) the success of the idea and implementation speaks volumes about where the real estate domain is shifting to.
MICRO APARTMENTS
22
The idea of bringing farming to the city center might sound unusual, but research has shown that direct exposure to sunlight, large irrigation systems and vast expansive farmlands aren’t always necessary to grow good quality organic produce. The need for fresh produce where the population is most concentrated is growing at a tremendous rate. And there are buildings around the world that have successfully implemented a garden system within their concrete walls.
A recruitment company in Tokyo, Japan called Pasona have an office building that has urban farms incorporated into the structure. Nearly 20% of all office space in the 50-year- old building was dedicated to growing different species of plants, fruits, vegetables and rice. Employees are encouraged to maintain and harvest the crops with help from agricultural specialists who conduct occasional workshops. The vision was to create new farmers in urban areas of Japan and a renewed interest in that lifestyle. [33] The system implements a hybrid of hydroponics and traditional soil along with using an advanced artificial climate control technology. Edmonton has already started seeing this technology in the city center. Kris Bruckmann, Director of Retail and Hospitality Operations at MacEwan University has been involved with a tower garden setup in the campus building.
TOWER GARDENS
LRTRestaurants
River ValleyAmenities
Ice District
Restaurants
Short commute
Transit
Walkability
Walkability
Convenience
Shopping
Proximity to officesClose to university
BarsClose to entertainment
Convenient for entertainment
Close to offices Local Businesses
Jasper Ave
Arts DistrictFacilities
Close to WorkProximity to services
Close to Churchill Square
Social
Proximity
Walk to work
Downtown
Access
Work
University
Proximity to UniversityLocation
Convenient
Well Connected
Commercial Zone
Entertainment avenues
No need for car
Population density
Calmer parts
Convenience
Festivals
Rogers Place
Accessibility to stores
Entertainment options
Public Transport
Rental options
Community
OfficeMobility
Reasons to move to Downtown Edmonton
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With office space vacancy at a sudden high, the concern for the future of some of the buildings in downtown is understandable. However, this increase in commercial space should be seen as more boon than bane. It gives the developers and owners the opportunity to adapt to newer trends while they’re still nascent.
Office to residential conversions are the most popular, but there’s only so much you can convert before saturating the market once again. Affordable housing and student housing could be low cost easy to implement solutions and the market for this demographic exists today.
ICE District will be creating many job opportunities and this workforce could find a home close to work if they had affordable options. And for student housing, the University of Alberta, MacEwan University, NAIT and NorQuest college all have campuses in the downtown region are constantly expanding. Research and surveys indicate that students prefer to stay close to campus and leisure activities.
There will always be trends in the real estate market. Stephen Mutty of Colliers International refers to this as “Real Estate Darwinism”, [34] where properties need to adapt to the market or they could die.
CONCLUSION
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1. Downtown Business Association - www.edmontondowntown.com/about.php
2. Case Study - Conversion of an Office Building to Seniors Housing: http://rjc.ca/about/resources/archives/case-study-conversion-office- building-seniors- housing
3. The state of Edmonton’s downtown ten years ago: From the Journal archives by David Staples | Edmonton Journal – Nov 10, 2011
4. Building Class Definitions – BOMA: http://www.boma.org/research/pages/building-class- definitions.aspx
5. Sydney’s Residential Conversions Breathing New Life into Old Buildings | The Urban Developer – Aug 6, 2015
6. Behance | https://www.behance.net/gallery/25591833/Bridgehill-Residences
7. Bridgehill Group Website - http://www.bridgehill.com.au/sydneys-residential- conversions-breathing- new-life- old-buildings/
8. 5 factors that make an office building right for apartments by Nicola Webber | RealCommercial.com.au - Mar 21, 2014
9. First resident settles into Orpheum Lofts downtown by Mike Padgett | Phoenix Business Journal Jan 2, 2005
10. From the Arizona Room | 114 W. Adams St. — Orpheum Lofts by Si Robins | Downtown Phoenix Journal - Jan 20, 2010
11. Arizona Dwelling – Orpheum Lofts | http://dwellarizona.com/urban-living/downtown- phoenix/orpheum-lofts
12. The Caniglia Group – Realty Executives – Orpheum Lofts
13. Penthouse, apartments set for office building by Mike Padgett | Phoenix Business Journal - Oct 4, 1998
14. Unusual hotel-apartment conversion could save blighted Brookfield Building in downtown KC by Diane Stafford | Kansas City Star – Aug 26, 2015
15. Vacancy Stabilized – Cushman & Wakefield and Douwntown Council | The Kansas City Star
16. The great potential of a growing downtown – Khedija Hentati
17. Rembrandt Park Gebouw – Skyscraper Page
18. Ramada Hotel / Hotelschool The Hague – Architectuur Centrum Amsterdam
19. Rembrandt building, Amsterdam - http://www.kennisbankherbestemming.nu/projecten/rembrandtparkgebouw-amsterdam
20. Arc at Old Colony in Loop offers upscale student housing - By Sasha Lekach - Chicago Tribune July 29, 2015
21. High-end ‘super dorms’ find home in the Loop by John Handley - Chicago Tribune Dec 28, 2015
22. Student Housing in Elsevier Office Building / Knevel Architecten – ArchDaily Nov 14, 2015
23. The Century Building Pittsburgh, Pennsylvania - Urban Land Institute - 2012
24. Century Building Website: http://www.centuryon7th.com/plans.html
25. Digging Downtown: New lofts, apartments attracting younger residents By Julie Percha Pittsburgh | Post-Gazette Feb 27, 2011
26. Canine mixer welcomes Downtown Dogs only (and their humans) By Hayley Fox | www.blogdowntown.com
27. ‘Mr. Downtown L.A.’ says dogs and playgrounds can transform downtown Edmonton - Bill Mah | Edmonton Journal Nov 17, 2015
28. A Pet Friendly Primer - Residential (Apartments London Ontario (Old Oak Properties))
29. Intergenerational houses bring seniors, 20-somethings together by Vikki Ortiz Healy - Contact Reporter
30. New York turns to micro apartments to solve city’s big housing problem – Steven D’Souza | CBC News | Mar 09, 2016
31. This new apartment is like a college dorm for grown-ups by Matt McFarland | Washington Post | Feb 05, 2016
32. WeLive Website - https://www.welive.com/
33. Pasona Urban Farm by Kono Designs | Dezeen Magazine
34. Office-to- Residential Conversions: Risks, Rewards and Real Estate Darwinism by Stephen Mutty
REFERENCES
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Pasona Building – Kono Designs
Elsevier Office Building – ©Leonard Faustle Photography
Zoku Microapartment – ©Ewout Huibers for Zoku and concrete
Century Building – TREK Development Group
Arc at Old Colony – R. Balsamo (Critical Thoughts on blogspot) + ©Antonio Vernon
Bridgehill Residences – © Bridgehill group
Rembrandt Building – (© architectuur centrum amsterdam) + © OSeveno
Orpheum Lofts – Zeb Micelli
Brookefield Building – © Sunlower Development Group
PHOTO CREDITS
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