Abundant greenfield sites and sprawling parcels of land are things that Northeast developers have little access to, but many industrial owners and residences are demanding property close to the booming metropolises. To adjust, Northeast developers are utilizing adaptive reuse construction as a method to revive communities and create livable space in commercial buildings that are no longer in use.    

Industrial-to-residential conversions are among the more common forms of adaptive reuse projects, and, in many cases, can be delivered faster, provide unique architectural elements and can be cheaper to build than demolishing and rebuilding on prime real estate.

Carving A Niche
In parts of New York and New Jersey, real estate developer Coalco New York is becoming a leader in constructing adaptive reuse projects, says Edward Yorukoff, director of marketing.

“The benefits that we have seen in adaptive reuse is that it carves a niche,” Yorukoff states. In the lucrative, albeit crowed, condo development market, Yorukoff says instead of seeing variations of the same type of condo development, many customers are looking for space with character, which the reuse projects can often provide.

Coalco is building a $300 million condo development called Canco Lofts as part of one of the largest adaptive reuse projects along the New Jersey shoreline. Canco Lofts, a one-million-square-foot project in Jersey City, is a conversion of the American Can Co. factory building. The building’s close proximity to a nearby rail station provides residents easy access to Manhattan.

When complete, the lofts will consist of 551 studio, one-, two- or three-bedroom units ranging from 650 to 1,650 square feet. The lofts will incorporate many of the architectural elements of the former building, including a renovated art-deco façade, saw-tooth roof, grand-scaled windows, vaulted ceilings and dramatic mushroom-capped columns in each residence. The lofts will also be outfitted with wide-plank, white oak wood floors and high-end kitchen and bathroom amenities.

Not only does adaptive reuse provide developers with options where little land is available, but it also gives an opportunity to break into and improve communities. According to Yorukoff, adaptive reuse can offer the perfect foot-in-the-door to a neighborhood in transition.

“As a company, we have practiced this approach to real estate acquisitions to track where the market is going, and then jump a few steps ahead,” he says. “It is our philosophy not to compete with everyone else, but to hit the neighborhoods that are right on the cusp of developing.”

Regionally, Yorukoff says there is a high percentage of property available for reuse projects, particularly in parts of New Jersey where residents have easy access to downtown Manhattan via public transportation.

Industrial Growth
Rockville, Md.-based Opus East , one of the region’s leading developers, is capitalizing on the Northeast’s surging population and growing need for industrial capacity. According to Director of Construction Gary Drumheller, both retailers and product manufacturers are interested in the region as the prime location for distribution and warehouse facilities because of its close proximity to large, metro areas.

“You have to take into account that there are about 20 million people that can be serviced within a [short] drive,” Drumheller notes. “[The region] is well suited for distribution areas, and more retailers are going to the just-in-time method of delivery, so they want to be in an area where they can get product out quickly.”

Opus East currently has more than 4.9 million square feet of property in planning or under development in several market segments including industrial, retail, commercial office and multifamily. The developer has created a series of five modern warehouse, distribution and light manufacturing facilities for industrial users. Known as Bethlehem Crossings, these centers are located within a 43-acre industrial park in Northampton County in Pennsylvania. Tenants include Federal Express, Bowe, Bell and Howe.

Bethlehem Crossings I, totaling 208,000-square-feet, was created specifically for the warehousing of consumer products, raw materials and business consumables, as well as other large, high-risk commodities.

Bethlehem Crossings is located two miles from Route 512 and Route 22, an arterial roadway that connects with I–78 just west of Allentown, Pa., and across the Delaware River.

Regional Challenges
Similar to other regions, the price of land is limiting the potential for development.  “We’ve seen an increase in raw land costs and there has been huge spikes in the New Jersey corridor,” Drumheller states. “Industrial land has gotten very expensive.” Approval processes, zoning and environmental regulations are all challenges owners must face in the Northeast, Drumheller says. “It seems that, in the last two years, the approval process has become more difficult,” he says. “We say that building buildings is the easy part – the tough part is getting through the approvals and the entitlement process.”