The buildings and land that make up the core of traditional property types, like the large warehouses of the industrial sector and the shopping malls of retail, are being reimagined and repurposed to meet the needs of today’s dynamic market forces.
Nashville’s Wedgewood-Houston is a model for repurposing land and structures.
An area that was once an industrial neighborhood is being redeveloped into a five-story mixed-use project that will include condos, dining areas and commercial space.
Thirty years ago, the neighborhood experienced a deep decline with the departure of traditional businesses. Today, the area remains close to its roots as a manufacturing town – only with a more modern twist. Locals are calling it a “makerhood.” Old industrial buildings are now home to a range of modern creative businesses, from art galleries to maker spaces for small batch manufacturing.
In 2016, Dime Savings Bank in Brooklyn shuttered its doors. According to a recent article in the The New York Times, the beautiful, yet impractical structure of the 16,750 square foot, marble floor historic building could not compete with online banking technologies like digital payments.
The bank is getting a second act.
Developers are repurposing this empty landmark and transforming it into the base of what will be Brooklyn’s tallest skyscraper, a luxury apartment building. The bank will transform into a retail space for a flagship store and its roof will become an outdoor lounge area with a pool.
Dime Savings Bank isn’t the only old bank building that’s being revived. The city will see more of these conversions. At a time of near-record land prices, developers are looking to these lavish structures with airspace that provide opportunity to build vertically.
In our last post about retail, we mentioned Brookfield Property Partners’ plan to “future proof” their CRE investments by redeveloping large malls into “mini-cities.” Gradually, the company will spend up to $1 billion each year over the next few years to convert the shopping centers into mix-used “mini cities” that include office and/or residential space.
As physical retail loses its luster, this retail trend of repurposing shopping malls and large retail chains into mixed-used developments will continue to happen all over the United States.
The city of Milwaukee landed $9 million more in financing to continue mixed-use redevelopment of long-struggling mall Grand Avenue. On the West Coast, part of Los Angeles’ West Side Pavilion will be redeveloped into a 584,000 square foot office for a tech company by 2022.
Even Macy’s is planning to get back on track by repurposing their stores. The famous retail chain aims to downsize their square footage and add new items like high-value apparel and jewelry, in-store technology and double their amount of pop-up shops. There is even early talk about Macy’s building an office skyscraper on top of its flagship store in Manhattan.
WhyHotels, which uses a portion of new luxury apartment buildings as “pop-up” hotels, officially opened the doors to their new hotel this month. WhyHotels launched in 2017 and operates temporary hotels in the Maryland and northern Virginia area by taking advantage of new apartment building units that typically take over a year to lease.
Innovation is reinventing commercial real estate
Innovation isn’t only a buzzword used in conversations about new technologies and social trends, but it’s a key word in discussions about commercial real estate too.
In Forbes, Convene’s Co-Founder and CEO, Ryan Simonetti, addresses how innovation is driving the future of CRE. He states, “New business model innovation and emerging technologies will continue to disrupt the industry by fundamentally altering the way real estate is designed & built, sold & marketed, and serviced & operated.”