Downtown Redevelopment Authority plans to launch a Commercial Real Estate Conversion Program

[BEES?!]

In their meeting from June 2022, the DRA appears to be putting out feelers to find building owners who are potentially interested in participating in what they’re calling an “adaptive reuse feasibility study”.  It sounds like, down the line, they want to launch a program to incentivize redevelopment of underutilized office buildings into residential. 

 

This is what they said:
 

To begin shaping an adaptive reuse incentive program, Central Houston Inc. (CHI), in collaboration with the Downtown Redevelopment Authority (DRA), seeks to identify building owners, within the Downtown Houston boundaries of the DRA, interested in participating in an adaptive reuse feasibility study. This is the first phase of a process that is meant to lay the groundwork for an Office Conversion Program, designed to incentivize the rehabilitation and repurposing of underutilized office space in downtown buildings within the boundaries of the DRA.

At this juncture, we are seeking to gauge interest in the initial consideration for the study. We will use a broad set of criteria to identify candidate buildings, including consideration of [ vacancy rate over time, market position, location, overall square footage available, full floor availability, property value performance, access to mass transit, walkability, existence of past building feasibility studies]. To warrant full consideration, building owners will be required to provide design, engineering and financial data on the buildings for the study. Once we have identified buildings/owners we will return to the Board to request authorization to produce a feasibility study – addressing economic, design, and engineering variables -- through a Request for Proposal (RFP) to provide a more comprehensive understanding of the reuse opportunities within each building envelope and the financial challenges in realizing specific adaptative reuse opportunities.

 

The meeting PDF is here: http://www.downtowntirz.com/downtownhouston/wp-content/uploads/2022/06/Board-Book-6.14.22.pdf

The bit about the feasibility study is on page 40.

 

Alright, so, with 1801 Smith being reno’d to residential, what buildings do y’all think are possibly next?

[5thGen]

I wish someone can build out the old Sakowitz garage already.  The property value is probably getting to a point where it probably will be torn down if it does not hold enough space to be profitable.

Edited August 7, 2022 by 5thGen

[Ross]

8 hours ago, 5thGen said:

I wish someone can build out the old Sakowitz garage already.  The property value is probably getting to a point where it probably will be torn down if it does not hold enough space to be profitable.

To be clear, that is not the old Sakowitz garage, it is the old Sakowitz store that was converted to a garage after the store closed.

[5thGen]

7 hours ago, Ross said:

To be clear, that is not the old Sakowitz garage, it is the old Sakowitz store that was converted to a garage after the store closed.

Yes.  It was just shorter to type.

[j_cuevas713]

23 hours ago, 5thGen said:

I wish someone can build out the old Sakowitz garage already.  The property value is probably getting to a point where it probably will be torn down if it does not hold enough space to be profitable.

I think a while back the city was trying to get a major retailer to lease the building, but that was before Downtown started to really come in to it's own. I wonder if they would be more successful this time around. 

[editor]

18 hours ago, j_cuevas713 said:

I think a while back the city was trying to get a major retailer to lease the building, but that was before Downtown started to really come in to it's own. I wonder if they would be more successful this time around. 

My guess is no.  It's going to be a long time before large scale retail will work in downtown Houston.  Not forever.  But we need to get the full-time residential numbers up first.

First in will probably be something like a CityTarget, or Neighborhood WalMart.  We can hope for department stores after that.

Right now, the bulk of the people downtown are commuters, and commuters haven't been convinced to shop downtown yet.  They're of the rural mindset, and will do their shopping on the weekend, not after work when there's an hour plus commute ahead of them.  And isn't a consistent enough flow of tourists to take up the slack.

Just stand in front of 1000 Main and watch the doors.  When the number of people using the revolving doors gets closer to the number of people using the swinging doors, you know we're ready.

[j_cuevas713]

14 minutes ago, editor said:

My guess is no.  It's going to be a long time before large scale retail will work in downtown Houston.  Not forever.  But we need to get the full-time residential numbers up first.

First in will probably be something like a CityTarget, or Neighborhood WalMart.  We can hope for department stores after that.

Right now, the bulk of the people downtown are commuters, and commuters haven't been convinced to shop downtown yet.  They're of the rural mindset, and will do their shopping on the weekend, not after work when there's an hour plus commute ahead of them.  And isn't a consistent enough flow of tourists to take up the slack.

Just stand in front of 1000 Main and watch the doors.  When the number of people using the revolving doors gets closer to the number of people using the swinging doors, you know we're ready.

I like the way you think. 

[sapo2367]

14 hours ago, editor said:

Just stand in front of 1000 Main and watch the doors.  When the number of people using the revolving doors gets closer to the number of people using the swinging doors, you know we're ready.

This drives me crazy -- my office building has a revolving door and then a small swinging door next to it and everyone always avoids the revolving door.

[Nate99]

Do bombed out old hotels count? Asking for a friend...

[BEES?!]

2 hours ago, Nate99 said:

Do bombed out old hotels count? Asking for a friend...

You know, I’ve been checking on their meetings, and since 2021 I have not seen any updates on that project. 

[hindesky]

How about 1001 McKinney St. It's for sale according to JLL. Nice Art Deco interior has a Morton's Steakhouse in it but seems to have a lot of tenants so probably not a candidate for conversion.

https://www.us.jll.com/en/investorcenter/office/1001-mckinney-houston-tx-unitedstates

[editor]

On 8/10/2022 at 12:50 AM, hindesky said:

How about 1001 McKinney St. It's for sale according to JLL. Nice Art Deco interior has a Morton's Steakhouse in it but seems to have a lot of tenants so probably not a candidate for conversion.

https://www.us.jll.com/en/investorcenter/office/1001-mckinney-houston-tx-unitedstates

As long as they don't mess with the Shipley's in the basement.  It's the only place to get beignets downtown.  And beignets aren't as easy to find in Houston as they once were.

[Garrett Mitchell]

On 8/10/2022 at 8:50 AM, hindesky said:

How about 1001 McKinney St. It's for sale according to JLL. Nice Art Deco interior has a Morton's Steakhouse in it but seems to have a lot of tenants so probably not a candidate for conversion.

https://www.us.jll.com/en/investorcenter/office/1001-mckinney-houston-tx-unitedstates

The most important thing is to educate him. I recommend teaching him time management, which will come in handy in his future. You can learn more about this here https://edubirdie.com/examples/time-management/ That way it will be easier for your child to organize himself.

I absolutely agree with you.

Edited September 2, 2022 by Garrett Mitchell

[Texasota]

From the August meeting:

Pursuant to the DRA Board’s recommendation, Staff has distributed a letter of request to property owners inside the boundaries of TIRZ3, seeking participation in a feasibility study to go to an RFP later this summer. The study will evaluate approximately five opportunities for conversion of office space into other uses such as residential. The study is intended to inform the development of a financial tool that can be used to more easily facilitate the conversion of obsolete office space.

 

Also this sounds pretty interesting:

Staff has submitted a revised strategic annexation & term extension request to the City Planning Department for Mayoral review later in August. This request will come before the DRA Board in the Fall as a proposed Project Plan and Financial Plan, as has been exercised in the past. The limited annexation holds the promise of assisting the DRA in its mandate to address blight remediation and invigorating Downtown public spaces because the proposed annexation involves a significant redevelopment project that would generate significant incremental tax revenue.

Edited August 31, 2022 by Texasota

[mattyt36]

16 minutes ago, Texasota said:

From the August meeting:

Pursuant to the DRA Board’s recommendation, Staff has distributed a letter of request to property owners inside the boundaries of TIRZ3, seeking participation in a feasibility study to go to an RFP later this summer. The study will evaluate approximately five opportunities for conversion of office space into other uses such as residential. The study is intended to inform the development of a financial tool that can be used to more easily facilitate the conversion of obsolete office space.

 

Also this sounds pretty interesting:

Staff has submitted a revised strategic annexation & term extension request to the City Planning Department for Mayoral review later in August. This request will come before the DRA Board in the Fall as a proposed Project Plan and Financial Plan, as has been exercised in the past. The limited annexation holds the promise of assisting the DRA in its mandate to address blight remediation and invigorating Downtown public spaces because the proposed annexation involves a significant redevelopment project that would generate significant incremental tax revenue.

Well when I hear “blight remediation,” a certain building comes very quickly to mind.

[hindesky]

https://www.chron.com/realestate/article/Could-Empty-Downtown-Office-Buildings-Really-Help-17443262.php

[hindesky]

Is the transformation of commercial office buildings to multifamily residences hype or hard news?

 

So far, it’s been mostly hype, according to Julie Whelan, global head of occupier research at CBRE, who reported at the recent National Association of Real Estate Editorsconference in Atlanta that between 2016 and this year, only 35 properties a year have been converted to apartments or other uses.

But many more conversions are in the offing, the Boston-based Whelan added. And others on the panel with her agreed.

 

https://www.multihousingnews.com/office-to-mf-hype-or-fiction/

[jhjones74]

On 8/11/2022 at 11:53 AM, editor said:

As long as they don't mess with the Shipley's in the basement.  It's the only place to get beignets downtown.  And beignets aren't as easy to find in Houston as they once were.

There are now two other spots downtown to get beignets, one on Main St where S&T used to be (bummed they closed) and in the new Lyric Market that just opened today there’s a po’ boy shop that also sells beignets

[editor]

On 10/13/2022 at 11:49 PM, jhjones74 said:

There are now two other spots downtown to get beignets, one on Main St where S&T used to be (bummed they closed) and in the new Lyric Market that just opened today there’s a po’ boy shop that also sells beignets

Happy to hear about the Lyric option.  What's the one on Main Street?  That one is probably closer to me.

[jhjones74]

1 hour ago, editor said:

Happy to hear about the Lyric option.  What's the one on Main Street?  That one is probably closer to me.

They’re calling it Little New Orleans, under the Binz building. You can see beignets listed on the window - I was too disappointed to find out S&T had closed to give it a try.

Edited October 16, 2022 by jhjones74

[editor]

12 hours ago, jhjones74 said:

They’re calling it Little New Orleans, under the Binz building. You can see beignets listed on the window - I was too disappointed to find out S&T had closed to give it a try.

Excellent.  Thank you!  I've seen that banner before, but thought it was just another random daiquiri bar. 

I'll hobble over there today.

[urbgal]

I'm sorry I have zero clue on how to respond to specific posts (would love some advice).  New here.

1001 McKinney isnt a candidate because its a well-occupied building.  And thank you to whomever posted the renovated pictures.  That renovation was a ton of work.  And yes the building is for sale but best use is currently office.

 

The most ripe conversion deal downtown is 1010 Lamar which now uses the old Sakowiz building as its garage.  Both the building and the garage should be converted, but you have to lease SOME parking or find alternate parking.

 

 

[hindesky]

3 hours ago, urbgal said:

I'm sorry I have zero clue on how to respond to specific posts (would love some advice).  New here.

 

 

 

Use the quote button on the post you want to reference like I did and edit out the portion you don't want to use.

Yeah I posted the 1001 McKinney because it's gorgeous on the inside but as I looked at all the current tenants I realized it had too many businesses renting there and likely wouldn't be a candidate.

[Avossos]

How about the Binz building?

[Big E]

On 10/20/2022 at 3:56 PM, Avossos said:

How about the Binz building?

Its ugly. How do you feel about it?

[swtsig]

On 10/20/2022 at 12:38 PM, urbgal said:

I'm sorry I have zero clue on how to respond to specific posts (would love some advice).  New here.

1001 McKinney isnt a candidate because its a well-occupied building.  And thank you to whomever posted the renovated pictures.  That renovation was a ton of work.  And yes the building is for sale but best use is currently office.

 

The most ripe conversion deal downtown is 1010 Lamar which now uses the old Sakowiz building as its garage.  Both the building and the garage should be converted, but you have to lease SOME parking or find alternate parking.

 

 

For the love of god somebody buy that building from Younan and do this. 

[Big E]

You know what would actually be a good candidate for this? 800 Bell, aka the ExxonMobil Building, aka the Humble Building. That building has been practically empty since ExxonMobil moved out, and, if I remember correctly, has no major tenants. Its long touted renovation hasn't happened, probably because of this. Converting the building to residential use, or some form of mixed use, might be the most logical way to move forward at this point, since I doubt a building that old is going to get a marquee tenant anytime soon, no matter how much its renovated.

Edited October 26, 2022 by Big E

[Ross]

3 hours ago, Big E said:

You know what would actually be a good candidate for this? 800 Bell, aka the ExxonMobil Building, aka the Humble Building. That building has been has been practically empty since ExxonMobil moved out, and, if I remember correctly, has no major tenants. Its long touted renovation hasn't happened, probably because of this. Converting the building to residential use, or some form of mixed use, might be the most logical way to move forward at this point, since I doubt a building that old is going to get a marquee tenant anytime soon, no matter how much its renovated.

800 Bell is empty. Before it can be marketed as a residential conversion, or pretty much anything else, it needs to be completely gutted and the asbestos remediated. I used to know some network guys that worked there, and any time new wiring was needed, whoever ran it had to put on a Tyvek suit, respirator, and gloves, to minimize asbestos exposure.

[phillip_white]

13 hours ago, Ross said:

800 Bell is empty. Before it can be marketed as a residential conversion, or pretty much anything else, it needs to be completely gutted and the asbestos remediated. I used to know some network guys that worked there, and any time new wiring was needed, whoever ran it had to put on a Tyvek suit, respirator, and gloves, to minimize asbestos exposure.

One would think that the required remediation would put it even higher on the list. With city funds allocated to that portion of the rehab, the developer would have a financial incentive to get started.

[j_cuevas713]

On 10/26/2022 at 10:41 AM, phillip_white said:

One would think that the required remediation would put it even higher on the list. With city funds allocated to that portion of the rehab, the developer would have a financial incentive to get started.

Yep I did some lead abatement on the roof back in 2010. That's when I found out about the notorious Petroleum Club at the very top.