How long until we are turning office towers into condos in the US?
Jeff
(Not as easy as it sounds)
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We already are. I do not know the designs. There is water and waste removal on every floor but how that is used I do not know. I could see some square footage as community spaces.
On both sides of my family are in London in the commercial RE business. In particular, both sides of the family are in office space. My cousin’s firm just sent him to work in Paris getting him out of London.
I used to work in a 44-storey, early 80s vintage office tower owned by SBC / AT&T which AT&T sold off to a real estate firm in 2006 then completely vacated in 2016. In its heyday, roughly 4800 people occupied the building.
Oddly enough, the building somehow gained “historic” status in 2022. I’m not sure how something architected to cookie cutter 1982 design trends counts as “historic” in 2022. The only thing historic about the building is how inconsequential all the work that took place there turned out to be for SBC/AT&T. A local news story mentioned one reason cited for the “historical status” designation:
The building has barely been updated since it was built in 1985, which works in its favor for historic status.
The report said, “The building retains historic integrity from its period of significance, 1985, as an excellent local example of Postmodern architecture.” In preservation terms, the lack of updates means the tower “retains a high degree of its historic design, materials, and workmanship.”
I worked there from 1994 to 2000 and the building still had the same interior scheme from the day it opened. Carpet tiles in one of three colors – blue, red, green – repeated each floor from 6-42, the same office cubicles. The 43 and 44 floors were decked out in CEO / executive level trim, at least until the CEO decamped to San Antonio. I ran into a collegue who left the company in 2014 and wound up working at my company and we reminisced about “One Bell Center”. I asked her what it was like now. “Do you remember what it was like when you left in 2000? It’s EXACTLY the same.” AT&T had not touched a THING in the building. Can you imagine working in an office building with 30 year old carpet tiles and scuzzy felt on the cubicle walls?
Converting giant hulking office towers like this to residential use is extremely difficult. These buildings were not designed for subdivision within floors which made them extremely cheap to build. Even if designed for subdivision, they typically treat bathrooms as a shared amenity among floor tenants, placing bathrooms in the center near the elevator shafts outside the secured space of any individual tenant. This leaves the rest of the floor space uninterrupted without plumbing logistics. One floor at One Bell Center has the SPACE for probably 15-18 apartments but to put plumbing for a kitchen and bathroom in each “unit” would require running new plumbing vertically through concrete floors then horizontally underneath in the ceiling area of the floor below to reach the main “chase” by the elevator towers. This would require renovation to work from the top floor down which would constrain the cashflow of the developer when selling units.
The real reason for the “historic” status designation was likely that such a designation provides an immediate real estate tax savings to the owner. The building finally sold to a NY developer firm in 2022 for $4.05 million. Yup. $4.05 million for the largest single office building in Missouri. That tells you how worthless the building is in its present form. The land it occupies should be worth $4 million alone but even the land is worthless when occupied by a building which requires complete renovation to be re-used in its original purpose – giant cubicle farms for firms facing WFH dynamics.
The recent buyer has probably come to the conclusion it is worthless in ANY form, including their original plan to spend $200 million renovating it into condominiums. Do the math on that to realize how insane that plan was. $200 million across 44 floors with 1.4 million total square feet. That’s 31,818 square feet per floor (roughly). (Hey, that’s big enough for a luxury suite suitable for an ex-President…) 31,818 square feet per floor is enough room for probably 15 individual 2000 square foot units. But that’s $200 million across 44 floors which is only $4.5 million per floor or $303,000 per unit. That’s not much money to perform a complete tear-out, retrofit the plumbing and electrical for subdivision, then actually build each unit with “condo” amenities. And oh, there is no parking that can be reserved for tenants in this building. From day one, SBC had private garage parking for maybe 30% of the staff and the rest had to walk from surface parking or other public garage parking, often from 6-7 blocks away. In St. Louis… In 100 summer heat and 10 degree winter cold.
That buyer is already having private conversations with other developers hoping to sell the building. The “historic” designation might be an aid in finding a greater fool to buy the property next but in the mean time will save the current owner on real estate taxes for an asset that is currently producing nothing but costs.
WTH
5 Likes
Many many many people have no use for stinking expensive kitchens and very little attachment to private spacious bathrooms, although real estate types and urban bureaucrats have refused to accept this realit for over a century.
Japanese coffin room hotels teach a lot, but are probably mostly a bridge too far… but it would not be difficult to turn multiple floors of office buildings into a deluxe mostly small rooms dormitory community, with each room or suite having access to wonderful non-plumbing non-cooking amenities Each room or suite could be set up with microwave, refi, and espresso machine easily plugged in, and with chemical toilets with clean outs accessible from halls. Have elegant private toilet and bathing facilities grouped near water/sewage core. Have a reservable-for-use Hi-Q kitchen(s) with dining room(s) available for use via reservation, Have access to gym, exercise, swimming, steam saunam, audio-video palace, etc as part of rental. Do excellent public spaces security.
I think there is a big market for this, but everyone in charge of real estate is still lost in time thinking of white picket fences.
david fb
4 Likes
Where would these be located? If not on first few lower levels, then a lot of $$$ needed to put them in–which the owner/investor does not want to do.
Yes, on lower floors, or on the top floor(s) where utilities often have space. It would take investment. But leaving office towers vacant or tearing them down is insanely expensive.
d fb
You are correct, not every condo development has to cater towards the $500,000/unit market with built in refrigerator, 6-burner commercial stove, wood-burning pizza oven, separate his and hers jacuzzi tubs, a recreation area with raquet courts and the little machine that serves the tennis balls… (I’m channelling Bob Dole via Dan Akroyd in an SNL skit…)
Even if I was willing to utilize shared bathrooms and shower facilities, I would still want the semblance of a plumbed kitchen. Not something worthy of using in a YouTuber’s gourmet cooking videos… Just enough so I can pour the stale coffee down the drain without having to leave my private space or zap a meal in a microwave and rinse the plates and wash them afterwards. That means you still need per-unit plumbing for supply and waste which spikes the cost of the rehab.
If America is going to solve its homeless problem, the type of facility you describe would be PERFECT, highly economical and way more humane than allowing / forcing people with profound economic or psychological issues to tough it out on the streets or in tent camps. However, if that approach were publicly pitched by a developer, HOWLS would erupt from nearby property owners about declines in property values and it would never pass a public hearing with the zoning commission. Never mind that the same property owners griping about declining values are currently sitting next to a 44 storey empty hulk that is producing 5% of the tax revenue it should if properly utilized and dragging down their property values already. Never confuse facts with feelings. They won’t say it, but their objections are not merely tax related. The types of people that could benefit from the housing approach you describe are not the type of people others want as neighbors.
WTH
4 Likes
Interesting discussion here…
I spent a few nights in a capsule hostel like this one in Japan. Fun experience. But not something I would relish as a long term arrangement.
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A while back a developer found a loophole in Seattle’s building codes that allowed for units with communal kitchens (instead of kitchens in each unit), so they immediately started banging these things up all over town. Typically, each unit would be about 180-200 SF, and utilities almost always included, and a communal kitchen on each floor. I asked a couple of owners if there was a problem maintaining the kitchens, and they both said the tenants don’t use them.
The secret sauce was the rent was cheaper than having roommates, but on a per square foot basis it was equivalent to luxury apartments. So the units would fill up immediately and the developers were making boatloads of money. The city changed the codes after a couple years and shut it down, but the business model works.
Another thought is that to accommodate utilities for cellular arrays on buildings, the installers sometimes would take a big hole saw and simply cut through each floor of the building, run the conduit (of which there is a lot), and then frame off the conduit. Sometimes there would be a closet or utility room in the same location in the stack and they would do it there. I don’t know the economics, but retrofitting utilities in buildings can be done.
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I am just glad I no longer look to office furniture sales for my sustenance.
Of course, the office furniture dealer made money both ways: we got paid to put the furniture in the space, then we got paid to take the furniture out when the company vacated. We made that round trip with several HP offices. Carly ordered the offices set up. Then Carly was fired and new management paid us to clear out the office spaces.
It’s been about 20 years since HP fired Carly. Has she been able to find any sort of job since? I admit being from Lucent, and fired from HP, does not make for an impressive CV.
Steve
1 Like
My cost center used to be charged between $500 - $800 every time one of my team members needed to be moved from one office to another…even if in the same building or even the same floor.
We moved every year at least once as teams kept getting reorganized. Greatest waste of productivity and cash.
One day at the pump seal company, we had a three person cube shuffle. The space I had, had been open at the front, and I was constantly being asked to loan a pen, or a piece of paper, or fix the copier, as I appeared more accessible. These constant interruptions obstructed my getting my work done. But, with a front wall, my space was 8" wider than the department assistant manager’s. Can’t have a peon with a larger space than the assistant manager, so they ended up moving me to Stanley’s cube, Stanley to Paul’s cube, and Paul, the assistant manager, into my old space. The department manager wanted Stanley next to his office, because Stanley was the son of the “chairman emeritus” of the company, so would wander in about midday, go into his office, and take a nap, so would not hear what was being said in the honcho’s office.
Steve
4 Likes
Thank you WTH for your solid post. I mostly agree. However, back in the 70’s I quietly set up living quarters for a month when I was babysitting/testing software "24-7"on 2 Vaxxen at a highly secure location, and found that a small sealable wheeled trash barrel handled all my needs for kitchenette disposal and cleaning and at times “a little more”. I think that could be made to work, especially if designed into the floorplans and custodial services.
david fb
(I was given permission to be there all night so as to be able to run diagnostics with no interference from programmers and “mission focused” people who worked by day. Truth was I mostly slept, on a cot right next to the consoles, and woke up whenever “bad stuff” happened on a program or on one of my Trace programs (the movie TRON was almost stolen from my real life). I took off an hour before dawn to go surfing.
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The IT guy at the Steelcase dealer I worked at apparently didn’t want to work evenings or weekends. So, he would come on the PA in the middle of the work day and say "attention staff, Hedberg will be down for an update for the next hour), and work at the entire company would come to a screeching halt, until the computer system was running again.
Steve
I would have been arrested courtmartialed castrated and my surfboard burned…
LOL
david fb
1 Like
I can not give the technical stuff a good lingo to it. The code would now run in a mock situation until ready for primetime. If not ready the company would revert and debugging would happen.