Commercial conversions are harder than they look

Real Estate Weekly, Nov 13, 1996 by Lois Weiss

"While the per unit price is good, the per square foot price is lower than other segments in the Manhattan market because the apartments are big," said Welder, who has worked on conversions including the Printing House and the Victoria at Union Square.

"If you are trying to get $300 to $400 a foot, and giving the 1,200 square feet, there's an ultimate dollar price that's going to be paid for it. For the consumer, you are getting more space for the dollar; for the developer you are getting a product that works in a tight market."

At The Exchange, Bruce Menin's conversion of 25 Broad, Kondylis says they were able were able to create a foyer area near the entryways by using the extra space, which can double as a dining area or a home office.

And in his layouts for the luxurious Trump International Hotel and Tower, Kondylis says the additional territory enabled them to provide the "super luxury" clientele with his and her bathrooms and dressing rooms, not to mention larger bedrooms. With residents there paying an average of $1,000 a foot, Trump is one of the few converters who will not lose on the larger apartments.

Kondylis has consulted on projects where the buildings were wedding cake style, and while the base floors were just too big and deep for residential usage, the tower portions worked.

"We recommended commercial usage for the base and residential for the upper floors," he said.

When Donald Trump first purchased 40 Wall Street, he always knew the tower portion would be desirable for office space or for residential use, and that the base could only be used for commercial tenants.

What made him decide to keep the entire building a commercial office tower was the idea of changing over 3,000 brand new Wasau windows, "the most expensive and best windows," and two brand new York chillers that wouldn't work well for a residential adaption.

Sam Spata, senior principal of HOK PC architects, who is working on the office renovation at what is now dubbed The Trump Building, said because there were many private offices, labs and cafeterias throughout 40 Wall, there was piping available for a residential conversion.

'It could have worked for them [as residential]," he said. "But some of the pipes [coming off the risers] were old and some were put in for tenant fit-out, and those would have had to be changed."

Trump already had a law firm in place in mid-tower, but that also could have proved costly if he had converted the rest of the tower to residential use.

One bonus for converters, they think, is that they have the ability to leave a commercial tenant in place while they create apartments above, below and even on the same floor. Think again. "Let's say on the 20th floor there is a commercial tenant," said Lombardi. "Yes, you can have the tenant in place but you have to sprinkler the stairs that are common to both."

Kondylis says one benefit of older commercial buildings is that they were over-elevatored and the extra shafts can be closed off and the square footage recaptured for residential usage.