All the attention given to buying, selling and rejiggering prewar buildings has driven developers to be more creative with their new purchases.
“I don’t believe you can’t make an efficient and proper prewar building, and I don’t believe you can’t make a funky and cool new building,” says Woody Heller, who heads capital markets for Savills Studley.
Heller points to the Taconic/Thor redevelopment at 837 Washington St., opposite the High Line, as “a funky new building designed to offer what tenants covet.”
At the same time, Heller notes that real estate investor L&L Holdings has created a new category of building stock: “Prewar Class A.”
“There is absolutely no reason that prewar buildings can’t offer charm or ambiance and also [be redeveloped] into a legitimate and proper office,” Heller adds, citing 200 Fifth Ave. — home to Mario Batali’s Italian food hall Eataly — and 114 Fifth Ave. as examples of older properties that were served up vacant and completely reinvented by L&L.
Still, Heller is not a fan of many of the side-street loft and office buildings that once housed very few workers doing light manufacturing and are now being dusted off for tech companies. “Because of a lack of forethought,” he explains, some of those repurposed as offices result in lines of workers waiting for slow, small elevators.
“Now you are taking a benching office use, which is the highest of all possible densities, and can’t expect one of these poor old buildings — that wasn’t built from an infrastructure standpoint — to handle the workers,” Heller explains. “Unless you re-envision by putting in infrastructure, they don’t have a fighting chance to serve the current intention.”
At 130 Fifth Ave., Heller recalls a client who added an additional elevator sleeve in the main lobby and a bigger cab. Similarly, he says, “It’s not impossible to add another stall to a bathroom by adding four feet.”
Adams & Co. is doing just that to its portfolio, says David Levy, a company principal.
“We have been very proactive in converting freight elevators to passenger elevators, adding to the fixture count in bathrooms and making sure the stairways can handle the higher body count,” he says.
“We are taking the typical bathrooms from one or two stalls and really enlarging them. We are making them ADA-compliant, and making them the nicest standard building bathrooms around.”
Similarly, Grant Greenspan, a principal of the Kaufman Organization, is taking the formerly dilapidated and vacant Ring portfolio of properties and completely reimagining them with entirely new infrastructure, technology and lots of art.
But Greenspan warns, “I think there is resistance beyond the $70-per-foot range for this category.” The technology, advertising, media and Internet tenants were the ones that targeted Midtown South for its cool, prewar industrial feel, brick walls and wood floors — but in the past, they could only afford to spend $30 a foot. “For me, as a potential buyer of other buildings,” Greenspan says, “I am cautious about the pro-formas [and projected rents] as these tech tenants will start going to other neighborhoods.”
