Redevelopment: Transforming obsolete properties

NAR – Commercial, San Diego, CAFriday, August 9, 2013

Adaptive Reuse

• Conversion of underutilized buildings into productive spaces

• Trends – Revitalize urban cores– Recycle surplus suburban development

• Strategies range from targeted sustainability retrofits to complete functional renovations.

Need for Adaptive Reuse

• Money– Targeted retrofit as a cost saving measure– Revitalize local economy

• Time – Sublease

• Aesthetics– Rebrand, Refresh, Redefine, Reinvent a site– Transform – restoring vintage or historical

Benefits of Rehabilitation

• Historic value – preservation, historic tax credits offset costs, unique place cannot be duplicated

• Rejuvenate an A-plus location

• Climate with reluctant buyers, frozen credit markets, and rigid zoning regulations

• Reduce sprawl

Government Incentives

• Streamline and accelerate legal framework of the disposal of Federal civilian property

• Exemption from more restrictive or burdensome updates in planning codes relative to Floor Area Ratios, height, yards, residential density, parking, and loading areas.

• Up to $4,500 per eligible adaptive reuse project applied toward construction plan review and permit fees.

Challenges

• Significant set of additional skills to manage project

• Ensuring solid returns generated by diverse mix of resources

• Challenges uncovered late in the project create risk for lenders

• Building codes

Examples

• Exploratorium museum, San Francisco – Founded in 1969 by physicist, Frank Oppenheimer– $300 million rehabilitation– 330,000 square feet

• The Headquarters, San Diego– Built in 1939. Last used by SDPD in 1987.– New 40-year lease in Jan. 2012– $40 million estimated cost

Exploratorium Museum (after)

Terramar: The Headquarters

Terramar: The Headquarters

Terramar: The Headquarters

450 B Street, San Diego(before and after)

450 B Street, San Diego (after)existing space20-story, Class C office towerOutdated interiors 1st generation tenant improvement

wm transformation Atrium | lobby expansionEntrance UpgradeMaximize open spaceCeiling height increaselighting | landscapeSignage upgrades

successful results!20-story, Class A office towerIncreased foot traffic and exposureAttractive aestheticNew modern look High-end space = Potential tenants increaseFaster leasing

South Coast CollectionCosta Mesa, CA (before)

South Coast Collection (after)

South Coast Collection signage (after)

South Coast Collection (after)wm transformation Modernization of designEnhanced signageUpdated standards

South Coast Collection (after)

South Coast Collection (after)

South Coast Collection (after)successful results!Current cohesive designClass A retail and office complexIncreased visibility from street

SEW Eurodrive, Hayward, CA (before)

SEW Eurodrive, Hayward, CA (after)

Tustin Commons, Tustin, CA (before)

Tustin Commons (after)

Tustin Commons (after)

Tustin Commons – Interior (before)

Tustin Commons - Interior (after)

Foster City Medical Center (before)

Foster City Medical Center (after)

Foster City Medical Center (after)

BKM Redhill Renovation, Costa Mesa, CA (after)

Q & A