Major retrofits and the repurposing of industrial buildings have become leading trends especially in New York City. The majority of the adaptive reuse is taking place in Queens, especially Long Island City; in Sunset Park and other parts of Brooklyn; and in the Bronx.
An excellent example of adaptive reuse is a building located at 37-06 36th Street in Long Island City. On this site in 1922, Isadore Goldberg founded The Pilot Electric Manufacturing Company, referred to as the Pilot Radio Company, which manufactured a range of communication devices, including radios, and televisions. As paper production began to soar, the building then housed a paper mill, which operated as the Romo Paper Products printing company in the 86,000 square foot industrial property. In 2012, real estate developer Gal Sela decided that the up-and-coming neighborhood needed a hotel, and began converting the building into The Paper Factory Hotel, a 122-room hotel with 12-foot loft ceilings.
Another building constructed in 1922, as a warehouse and distribution facility for the famed Gimbels Department Store, is the Falchi Building, a five-story, mixed-use, 658,049 square foot office building in the heart of Long Island City. The building provides alternatives to Manhattan for companies seeking creative work environments. The ground floor is food focused, with tenants including L’Arte del Gelato, Juice Press, Doughnut Plant, Astoria Distilling, Stolle Bakery and Good Neighbor Market. Other tenants are Suffolk County National Bank and Spaces, a work environment offering office space.
The Related Companies, the developer of the Time Warner Center and Hudson Yards, is entering Long Island City. In February, Related and Green Oak Real Estate purchased the seven-story industrial building at 21-09 Borden Avenue in southern Long Island City. The Real Deal reports that the developers plan to convert the property into an office building. The two developers also purchased the Paragon Building, a six-story, 108,000 square foot former industrial building at 21-00 49th Avenue, with plans to convert it into office space.
In August 2011, Salmar Properties acquired the long-vacant industrial center at 850 Third Avenue, in Brooklyn. The developer has spent more than $10 million renovating the site and created Liberty View Industrial Plaza. In 2014, the largest retail lease in Brooklyn was signed by Bed Bath & Beyond, for more than 120,000 square feet, to locate four of its stores, Bed Bath & Beyond, buybuy BABY, Cost Plus World Market and Harmon Face Value, on the second floor of this technology/industrial plaza. Last year, Saks Fifth Avenue announced it will be entering the outer boroughs with the opening of its Saks Off Fifth discount store. Saks plans to take roughly 30,000 square feet on the ground floor of this eight-story, 1.2 million square foot building. The first tenant in the building is Micro Center, an electronics and computer store. Also, late last year, Greenwich Village-based Koppers Specialty Chocolate inked a lease for 50,000 square feet on the third floor. The newest tenant to the property is Amazon, which plans to open a distribution outpost.
Liberty View is located near the 16-building, 6.5 million square foot Industry City, formerly known as Bush Terminal. The new owners have invested hundreds of millions of dollars to renovate the site into a home of food manufacturing, office space for technology, advertising, media, and information (TAMI) and the 70,000 square foot state-of-the-art practice facility for the NBA’s Brooklyn Nets. Last year, furniture and home décor retailer Design Within Reach signed a lease to open a 40,000 square foot outlet store and repair facility at the complex. Industry City is currently home to more than 50 firms in the design industry. The facility is also the home of Li-Lac Chocolates and Jacques Torres Chocolates.
One of the newest conversions in the DUMBO section of Brooklyn is “DUMBO Heights,” a conversion of a former industrial property owned Jehovah’s Witnesses. In 2013, a joint venture of Kushner Companies, RFR Realty and LIVWRK acquired a five-building 1.2 million square foot site at 117 Adams Street, 175 Pearl Street, 77 Sands Street, 81 Prospect Street and 55 Prospect Street. The developers have converted the collection of mid-rise buildings into offices and retail space. Current office tenants include WeWork Cos., Etsy Inc., Grog Design, and Alexis Bittar, and retail tenants include Randolph Beer, fitness center Shadowbox Row House, Bluestone Lane Coffee, Untamed Sandwich and Dig Inn.
This summer, Long Island City-based Silvercup Studios, the film and television production company, will open a 115,000 square foot, full-service studio complex in a warehouse building at 295 Locust Avenue, just a few blocks from the Bruckner Expressway and the Bronx Brewery, in the Bronx. The $35 million project will comprise four new production studios, a new office and a shop geared towards production staff working on the site.
In April, a joint venture of Bluestone Group, Altmark Capital and Princeton Holdings acquired a six-story, 84,650 square foot industrial building at 780 East 13th Street in the Port Morris section of the Bronx. The new owners are considering converting it into creative office space or artists’ lofts, according to the Commercial Observer.
Tenants are relocating to the outer boroughs for a variety of reasons, including lower rent and the availability of creative and alternative office environments. Tenants making this move may be eligible for the Relocation and Employment Assistance Program (“REAP”). The REAP provides tax credits of up to $3,000 per employee per year for businesses relocating to eligible areas and meeting certain other criteria.
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