2024 Fall Issue of Urban Land - 94

the lobby entrance alone can be exceed
CA$100,000. When replacing only the
glass, Slate has found that precast Brutalist
structures with punched windows are
the most cost-effective. The company also
plan to introduce ramps on the ground
floor for loading and servicing.
Green estimated that a similar new
build would cost about C$380 per square
foot, whereas conversions can range from
C$250 to C$350 per square foot, depending
on the façade and the extent of the
renovation.
Canada is taking the lead on residential
conversions due to the financing offered
by the Canada Mortgage and Housing
Corporation (CMHC). It offers attractive
premiums and loan amounts for multifamily
projects, based on affordability,
accessibility, and sustainability, with some
loans reaching as high as 95 percent loan
to cost ratio. This financing motivates
Canadian developers to seek solutions for
office conversions, whereas U.S. developers
are less incentivized.
Pearlhouse-160 Water Street
Vanbarton Group
New York, New York
Circa 600,000 square feet (56,000 sq m)
Estimated completion 2024
TIn 2014, when Vanbarton Group bought
the tower at 160 Water Street, it had
two medical office tenants. The company
planned to wait until their leases expired,
then renovate the property, which had
been built in 1972. Joey Chilelli, Vanbarton's
managing director, emphasizes that
not having " a path to vacancy " can be
one of the biggest pitfalls in office-toresidential
acquisitions. Buying out tenants
with long leases may be prohibitively
expensive. He cites the reduction in time
between construction and lease up as a
major factor in these conversions. Once
the building was vacated in October
2021, Vanbarton immediately began its
demolition process to construct 588 units,
undertaking what its personnel believe
to be the largest conversion of its kind in
New York City history. Because the company
bought the building with zoning asof-right,
no approvals were necessary, and
the process sped along.
The floor plate of 160 Water Street
was deep, with windows existing on only
three sides of the building. The core-towindow
depth, +/-65 feet, meant that
residential units could not be laid out in
a traditional way, so Vanbarton's team
members created three large open shafts
at the center of the floor plate. In doing
so, they were able to remove unusable
space, create a zone for a new MEP riser,
and later redistribute that removed area
to the roof, creating a five-story addition
without changing the overall site density.
To achieve this outcome, the columns
around the new openings were structurally
reinforced with plating and new steel
cross bracing.
According to Multi-Housing News, in
addition to timing, Vanbarton was able
to capitalize on two other major advantages
that conversions hold over new
builds. First, the company was able to
achieve a floor area ratio (FAR) close to
20 due to the pre-existing structure's FAR.
Second, at US$650,000-US$750,000
per unit, Vanbarton's total development
costs were low, thanks to the acquisition
basis of the aging building and the concomitant
reduction in hard costs. Chilelli
estimates that these projects usually run
US$100-US$200 less per square foot than
do new builds of similar quality. Overall,
construction costs were US$325-US$350
BEFORE
AFTER
The 80,000-square-foot (7,400 sq m) Cornerstone building in Calgary, developed by the Astra Group, was 100 percent vacant
upon purchase in spring 2022. The former office building now consists of 112 two- and three-bedroom apartment units.
94
URBAN LAND
FALL 202 4
AS TR A/PE OPLE FIRS T DEVEL OPMENT S

2024 Fall Issue of Urban Land

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