As investors searches for great investment properties that can help a community grow as well as turn a profit, some must think outside the box. If you drive through your local area, you will see countless abandoned buildings like schools, warehouses, and industrial buildings. These types of properties can be transformed into unique Multifamily living spaces that will draw people to them because they are modern and different. (See the Top 10 at the bottom of this article).
Take this high school turned into a 31 unit Multifamily with a gym, basketball court, and a open spaces that invite relaxation. (Watch the video, it is inspiring).
Here is another one. Most recent is downtown Boise’s Safari Inn, which was purchased in May, 2018, for conversion into apartments. One building will remain a hotel, while the top two floors of the hotel’s second building, with 43 rooms, will be converted into 41 apartments – four one-bedrooms and the rest studios, said John Schack, owner of Revolve Inc., based in Seattle. (The Bonneville Hotel, left, is being converted into apartments, right. Left photo courtesy of The Housing Company, right photo by Sharon Fisher)
OK, so those were large projects. How about something on a smaller scale? Developers are turning to adaptive reuse to convert old buildings in desirable locations to apartments that not only bring
in top-of-the-line rents but revitalize entire downtowns across the country. It's no secret that throughout the city regions, it's becoming harder and harder to find housing that's affordable. Smaller conversions fill in the gaps in cities everywhere.
In the shadow of several flashy projects open or underway near Baltimore's Inner Harbor, where rents range from $2,000 for a small studio to $8,000 a month for the penthouse, Baltimore is seeing a steady stream of smaller, more affordable new apartment projects.
There is a need for more housing. See HUDs article on Vacant and Abandoned Properties: Turning Liabilities Into Assets.
** Don't forget about the AirBnB or short term rental approach either. If you buy a property in a major city, resort, or vacation area, short term rentals can bring in the cash! We offer long term financing solutions on short term rental properties.
Here are the Top 10 Poplar Building Types to convert into Multifamily. (Check out the slide show).
1. Factory
Factories are the all-time most popular building type to be converted into apartment rentals, with 442 buildings undergoing such a transformation since the 1950s. The most conversions occurred in the 2000s, when 122 factory buildings were converted to multifamily use. Developers tend to prefer former factories for this type of redevelopment mainly because of their open space floor plans.
2. Hotel
Examples of hotels converted to apartment rentals include Chicago’s Pine Grove Manor and The Flamingo by Lake Michigan. Chicago is among the cities that saw the greatest number of hotel to multifamily conversions, along with Los Angeles and New York City, according to RentCafé.
3. Office Building Office to apartment building conversions grew in popularity over the past decade. Baltimore, Md., Kansas City, Mo. and Cleveland, Oh. lead the U.S. in this type of conversions.
4. School
Cities including Indianapolis and Louisville, Ky. have seen their old school buildings converted into apartment rentals. RentCafé notes that Kentucky has seven former school building that have been adapted for multifamily use. Examples of this type of conversion include St. Agnes in Indianapolis, Lourdes Hall in Kentucky and Alumni Lofts in Cincinnati, which in the early 1900s used to house the School for Creative and Performing Arts. The conversion incorporated the original school chalkboards, marble staircases and mosaic tile in the hallway into the apartment building.
5. Warehouse
Minneapolis is among cities that has seen the highest number of warehouse to apartment building conversions, at six properties. (Overall, 27 buildings in Minneapolis have undergone conversions to multifamily use, creating 3,514 apartment units). Examples of these conversions include ElseWarehouse, a former warehouse turned apartment building.
6. Healthcare Building
As mentioned earlier, repurposed healthcare buildings, including former hospitals, doctor’s clinics and dispensaries, tend to most frequently end up as affordable housing for those in the lower income bracket. About seventy-nine percent of such conversions have ended up as affordable housing, according to the report.
7. Retail
Around 64 former retail properties have been repurposed for residential use, and the report mentions that perhaps vacant retail space could give way to even more such conversions in the future. For example, mall vacancies are going up dramatically as retailers deal with the fallout from the pandemic, so apartment conversions from this type of building could become more common, reports The Real Deal. Around 50 percent of mall anchor stores might close by next year, leaving a lot empty space behind that could be repurposed for other uses. As an example, last year, Brookfield Properties partnered with AvalonBay Communities on a conversion that involved turning an old Sears store at Alderwood Mall, in the suburbs of Seattle, into 300 apartment units called the Avalon Alderwood Place. When the project opens, in 2022, it will still feature 90,000 sq. ft. of retail space.
8. Financial Building
Around 49 financial buildings, such as former banks, have been converted into apartment rentals in the United States.
9. Residential
Former residential buildings are also being converted to more modern apartment rental use, according to the report. There are at least 24 such conversions around the country, making it the ninth most popular type of conversion.
10. Military
Old military buildings round out the list of most popular building types for multifamily conversion. A few examples include Grand Lowry Lofts in Denver, a former air force base built in 1937, and Copper Beech Commons in Syracuse, N.Y., a former armory building built in 1940.
11. Malls - Yes, I know we said top 10, but here's a bonus.
Many mall redevelopers are taking a proactive approach to the issue and finding ways to include multifamily housing into their renovation plans. Combining apartment housing with retail provides a built-in customer base for retail stores that could help sustain foot traffic in the era of online shopping and social distancing.
Need a resource to find Abandoned buildings? Try LoopNet
Here are a few other stories that might get you thinking!
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