A partial building collapse in New York City may more likely be explained by contractor error than from inherent risks in large-scale office-to-residential conversions.
An engineer on the former Pfizer headquarters conversion told Gothamist that workers failed to reinforce columns as designed. The columns buckled and prompted evacuations across seven Manhattan Midtown East blocks.
The incident raised questions about the viability of office-to-residential conversions not just in New York City but nationwide. If contractor error caused it, that would take some of the heat off safety and feasibility concerns about large conversions. New York City officials are still investigating the failed columns.
Despite the new, narrowed evidence around the New York City project, the episode highlights the complexity of conversions and the challenges that can arise, regardless of a building’s age. Such problems will likely grow more common as states and cities push conversions to solve two problems: eliminating obsolete, vacant office buildings – and the lost real estate value associated with them –and adding housing supply.
Age is just a number
Developer MetroLoft is converting the 1970s-era office buildings into 1,600 apartments. To get that number, the developer is adding floors to existing buildings. Plans by GACE Consulting Engineers called for steel plating along the columns supporting the additional floors.
“The structure was not reinforced as GACE’s design required,” Chris Behan, principal engineer with the firm, wrote in a statement.
Most conversions have involved 1950s and older office buildings. But the drive to add housing supply has pulled newer buildings into the mix, some just 20 years old. COVID-19-induced remote and hybrid work models rendered many office buildings obsolete.
“Older ones – because the floor plates are narrower, especially the ones that were designed before electric lighting or before HVAC – are always going to be better because they have more light,” Patrick Chopson, principal architect with Atlanta-based firm Cove, told HousingWire TBD.
Older buildings needed windows for light before electricity existed, or when only dim bulbs lit the space. Windows also allowed cross-ventilation before air conditioning.
Floor space sizes expanded as HVAC and lighting technology improved. That gave rise to office space with inoperable windows lit by fluorescent bulbs.
Residential space needs light, a code requirement. Developers can carve a narrow 10,000-square-foot floor into apartments with proper natural lighting more efficiently than a 50,000-square-foot one.
To get necessary lighting, developers carve out a portion of the building, which costs money. Even projects with an existing skylight may need changes to optimize light for units. That was the case when a developer converted a 1990s office building near the White House in Washington, D.C.
Differences in construction
Aside from the floor space, 1950s and older buildings offer an engineering advantage.
“Older buildings are typically overdesigned by a wide margin,” Chopson said. “The famous example that resonates with most people is the B-17 bomber from World War II that was flying over Germany, would lose a wing and have one engine and still make it back. Everyone added a 20% safety factor on top of what they were doing back in the day.”
But he and other architects note that unknowns remain in existing buildings of any age until work begins. Old building plans might not be available.
If plans exist, the final product may not match them exactly. A crew could discover a decades-old construction flaw that needs correction. A window leak in a 1970s building, for example, may have persisted long enough to cause unseen structural damage.
“In most conversion projects, things always go wrong,” Chopson said.
He said a project with the complexity of MetroLoft’s floor addition and parallel construction, “you’re magnifying the number of things that could go wrong.”
Complexity can make or break deals
A real estate lender walked away from financing the conversion of a 1922 Boston office building, citing its complexity. Sean Kelly-Rand, managing partner at RD Advisors, wrote in a LinkedIn post that he passed on the deal chiefly because of an operating U.S. Post Office on the ground floor and high construction costs.
“To make the transaction work, it not only requires tax abatements and code variances, but also historic tax credits,” Kelly-Rand wrote, noting the firm’s experience in lending on conversion projects. “It’s a great project, but these conversions aren’t without real risk.”
He said those risks include a softening rental market and the possibility of rent control at some point. A Massachusetts court last month scratched a rent control measure from the November ballot on a technicality.
But legislation is sitting in a Senate committee that state lawmakers have pushed as a compromise that would allow each city the option to approve rent control. The formal legislative session ends July 31.
In Los Angeles, apartment developer Kennedy Wilson is tackling a complex project. The firm is scheduled to begin work in August on converting the mid-1970s, 400,000-square-foot World Trade Center into 512 affordable housing units.
It will require a slew of low-income tax credits and other subsidies to achieve profitability.
“It’s complicated and not for the faint of heart,” Nicholas Bridges, Kennedy Wilson’s global head of capital markets, told the Los Angeles Times.
