by Neil A. Dolgin
As New York City and the metro area slowly return to life after a pandemic of over 18 months, Kalmon Dolgin Affiliates (KDA) has been reimagining how some of our older industrial buildings can better meet the needs of today’s commercial real estate tenants while helping to energize our neighborhoods.
Some owners of old, large industrial buildings are experiencing multi-year vacancies between tenants. We see these empty buildings as opportunities to reimagine, repurpose and renovate them in ways that can drive value for owners and tenants alike. How did we get here?
In 1940, when KDA was already in business for 36 years, New York City was a manufacturing powerhouse. Manufacturing jobs in the city employed 60 percent of New York workers, according to the Journal of Historical Geography. By the mid century the City began to embrace the idea of offices and corporate headquarters and new zoning regulations forced large manufacturers into the outer boroughs.
Manufacturing today accounts for only 16% of the city’s workers who are operating in specialized areas like garments, textiles, printing, and the production of packaged foods. Yet we have a large number of old manufacturing buildings sitting vacant.
An owner struggling with an 75-year old vacant manufacturing warehouse probably wants to reimagine the building in the context of today’s economy especially if it’s a long-term holding for you or your family.
As brokers we regularly advise owners on renovations and developments based on our experience as owners. We will also include our team of architects, zoning attorneys, and expediters in a discussion with an owner on types of renovations, a possible renovation budget, ways to drive new income from an old property, and the kinds of tenancies that will work.
The switch from a single tenanted to a multi-tenanted building gives owners more opportunities to lease space. Multi-tenanted buildings and buildings with sub-lessors provide affordable leasing opportunities for smaller companies and manufacturers who want to be based in the outer boroughs. Mixed use buildings also can attract a wide range of business types. Going multi-tenanted also gives owners more opportunity to better qualify incoming tenants and ensure that their businesses fit a particular building. And if you lose one tenant, you are still producing income from the others.
We worked with an owner in East Williamsburg, Brooklyn to reimagine a very old, 18,000 sq. ft factory building. We evaluated the condition of the building, outlined necessary improvements and suggested a potential renovation budget. We considered the condition of other buildings nearby and how a reimagined building would fit into the neighborhood. Improvements included all new windows, a renovated elevator, a new roof with skylights, upgraded electrical, exterior masonry pointing, and more. After the makeover, this owner successfully rented the building to an artist who sublet to other artists, creatives and small manufacturers.
As brokers and owners we take pride in developing standout buildings in emerging neighborhoods with terrific tenants. It’s also the brands, businesses, retail and food services who occupy a building that give it a personality. If our building is in a neighborhood with unique attractions, we also want our building to reflect the appeal of that neighborhood. And we want our building to compliment the other buildings in the area.
We Often Start with a Vacancy
It often starts with a vacancy in one of our older buildings that happens to need renovation and repair. At that point, we may consider a new direction for the building that requires an investment and a discussion internally by the family. As other leases in the building expire, that is often the time when the actual renovation begins. One of our family members will take the lead in managing the buildout.
During a recent renovation, we looked at many of our past buildings and the neighborhood. We decided as a family that we wanted to create a building where tenants were involved in the arts or creative works. We reimagined our building as having “creative workshops” — clusters of tenants in businesses driven by creativity (i.e: art, music, education) — combined with retail and food and beverage tenants. Once we signed our first tenant the rest came.
The Dolgin’s led the renovation by committee for our building at 87 Richardson Street in Brooklyn. We wanted to give the building an upscale look to reflect the neighborhood. We created a beautiful lobby entrance and installed all new windows. We transformed a freight elevator into an elevator for passengers as well as merchandise and larger items. And we extended the elevator to the rooftop where we created a beautiful public area. An existing tenant, Talea Beer designed an outstanding storefront on the ground floor that matched our concept for the upper floors. Talea has been the rage with well-deserved feature stories that have appeared in Forbes and Cheddar and we’re excited to watch them grow.
We try to create buildings for our clients that are successful in neighborhoods that people enjoy. We want our buildings to help empower neighborhoods and bring back New Yorkers and visitors who want to frequent those neighborhoods and the businesses in those buildings.
The imperative for owners is to reimagine new uses for commercial and industrial properties of all sizes – small to large. If you’d like to know more about our approach to reimagining and renovating commercial buildings, I’d enjoy hearing from you. Please reach out via email.
Neil A. Dolgin is co-president of Kalmon Dolgin Affiliates. Founded in 1904, Kalmon Dolgin Affiliates (KDA) has grown into one of the New York metropolitan region’s leading commercial and industrial real estate firms. Kalmon Dolgin Affiliates specialize in all aspects of real estate services for developing, managing, selling, leasing and marketing commercial and industrial property. KDA’s highly-trained professional brokers offer clients a practical, street-wise approach to commercial and industrial real estate brokerage, leasing and sales, supported by the latest in real estate marketing, management and research technology.