This entry treats adaptive reuse from the institutional capital-deployment angle: significant capital deployed to acquire and convert obsolete commercial buildings, principally office, into residential or mixed-use at scale, often through funds or large development platforms, to earn returns...
Log in to followA friend forwarded me a conversion fund package, 340 pages, and I've been reading it in the wrong order for a week. The PPM is long and mostly risk factors written to protect the…
Someone in a webinar said developers routinely spend six figures studying an office building before they've bought anything, and that most of those studies end with a no. I don't…
I have spent way too long just running numbers and I am trying to actually move on something, so I want people to poke holes in this before I do. The building is a three story for…
Two conversion decks came my way this month and they argue for the same strategy in opposite ways. The first one spends most of its pages on basis. Secondary office is distressed,…
My firm does owner's representation and MEP coordination on renovation work. Last month we closed out our first conversion at real scale, a 1979 mid rise, 186,000 gross feet, 140…
I manage stabilized apartments, and an owner group has asked me to take on a converted office building post-completion. Reading their construction-period documents to understand w…
Working through a sponsor's model on a 165,000 sf mid-block office going to 190 apartments, and the exit assumption is doing more work than anything else in the file. The base cas…
The two doors I keep getting shown for conversions are pretty different, and I'm not sure conversions are somewhere I belong at all with a small portfolio of ordinary rentals. Doo…
A small group I have done GC work for wants to buy an 8 story office building and convert it. They asked me to do a first pass because I know how buildings go together, and I am l…
Working through an offering memo where the sponsor isn't buying the building at all. They're buying the mortgage at roughly 55 cents on the dollar and describing the conversion as…
Came from the construction side and I'm learning the capital side, and this is the line I can't get comfortable with. Every conversion pro forma I've been handed in the last year…
I've been sitting in on sponsor interviews for a conversion allocation and the split in the room is sharper than I expected. Candidate A has done four office-to-residential projec…
I wanted income without a second job, and preferred equity in a conversion looked like the version of this room I could actually own. 11 percent current, 4 percent accrued, one as…
I've been reading through a few conversion funds and one of the decks has a project described as adaptive reuse where, as far as I can tell from the floor plan, the building stays…
I've been reading through announced office-to-residential projects and the ones that actually reached a closing almost all have some conversion-specific tax program, an abatement,…
A client of mine does interior work for a sponsor and passed me their offering deck because I asked too many questions on site. I am on the service side, so this is me trying to u…
Underwriting a 300,000 gsf 1970s tower being marketed for conversion. Sponsor's numbers, roughly: acquisition $60/gsf so $18M, hard costs $230/gsf so $69M, soft at 18 percent of h…
This closed out last month so I can finally write it up. Early 2023 I put $50k into a single-asset deal, a 1970s eight story office building in a mid-size southeast downtown, goin…
I'm walking a 1984 tower, 14 floors, 22,000 sf plates, and the distance from curtain wall to core is about 40 feet on the long elevation. Slab to slab is 12'8". Single central cor…
The PPM in front of me is for a fund that buys obsolete office and converts to apartments. Target equity $180m, three year investment period, four buildings under letter of intent…