BORING BUILDINGS

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OFFICE to RESIDENTIAL CONVERSIONS (cont.)
https://citylimits.org/city-of-yes-see-how-your-community-board-borough-president-voted
https://commercialobserver.com/2024/08/office-residential-conversion-incentives
A New York City Office-to-Residential Conversion Wave Builds
by Larry Getlen  /  August 20, 2024

“Post-pandemic, the great hope for office-to-residential conversions in New York City was that they would be able to at least put a dent in two of the major crises facing commercial real estate: the slew of available office space given new hybrid/work-from-home standards that hardened post-COVID, and the affordable housing crisis permeating the five boroughs. It is now generally believed that this hope didn’t completely pan out for a number of reasons, including the physical inappropriateness of older office building windows and floor plates for residential, and various zoning obstacles. But, over the past year, this logjam seems to have loosened.

Government efforts such as New York City’s Office Conversion Accelerator Program, which launched last year; the new 467-m state tax exemption for conversions, with varying benefits depending on factors including a project’s timing and geography; and Mayor Eric Adams’s proposed City of Yes zoning overhaul, which is winding its way through various votes and approvals, are beginning to create optimism among New York developers that conversions can be executed in ways that are profitable and productive in the effort to create more housing. To give an idea of the growth of conversions in New York City, the decade from 2010 to 2020 saw 34 office-to-residential conversions here, according to the Department of City Planning. But in just the one year since the announcement of the Accelerator program, 69 building owners have expressed interest in potential conversions, a surge that could mark a major turning point in the ability of conversions to help alleviate those two big CRE problems in New York City.

The Office Conversion Accelerator Program provides owners whose conversions can produce at least 50 residential units with one central contact within city government to help ensure their work is code-compliant. This is supposed to eliminate the need for owners and developers to communicate separately with the Department of City Planning, the Department of Buildings, the Department of Housing Preservation & Development, the Board of Standards and Appeals, the Landmarks Preservation Commission and more to ensure they are in compliance with all codes and zoning regulations. “The Accelerator program has a goal of getting building permits in six months or less for projects that have the right to proceed under zoning,” said Dan Garodnick, the director of the Department of City Planning.

“So things like the replacement of windows in landmark buildings requires approval from the Landmarks Commission; changes in interior partitions and things like that which require approvals by the Department of Buildings; Fire Department approval for new alarm systems. These are examples of things that the conversion accelerator aims to assist with for buildings that are otherwise eligible to convert.”  The 4-month-old 467-m tax exemption for a multifamily property requires 25 percent of its units be rented at a weighted average of 80 percent of area median income, with certain other conditions attached. Tax savings will range from 65 to 90 percent, depending on the property’s location, and the length of the benefit — from 25 to 35 years — will be determined by the project’s starting date. New York State has also fulfilled a major desire for developers in lifting the floor area ratio (FAR) of 12 in certain instances, depending on area zoning requirements and a new development’s percentage of affordable units.

The City of Yes for Housing Opportunity would expand current regulations — which allow for conversions only in buildings constructed before 1961 — to include any building constructed before 1991, and also expand eligibility geographically from buildings in the city’s main office centers to anywhere that residential uses are allowed. City of Yes still needs to be voted on by the City Planning Commission and the City Council, both of which should happen later this year. Owners of 69 buildings have expressed interest in the Accelerator program. Many are doing so based on the belief that the City of Yes proposal will pass. “Sixty-nine buildings have expressed interest in converting, and we’ve got four buildings already under construction that will create more than 2,100 new homes,” said Garodnick.

“It’s important to note that of the 69 buildings that expressed interest, some of them can be converted as of right, and some of them will need to take advantage of changes in our City of Yes for Housing proposal. We expect to see more movement once the City of Yes proposal is enacted.” World Trade Center developer Larry Silverstein, who, along with partner Metro Loft Management, is currently converting 55 Broad Street from a 30-story office building to 571 market-rate apartments, believes that efforts like the City of Yes and the Office Conversion Accelerator Program are essential to the city’s progress. “When a program proves enormously important because it can accelerate the rate of conversions, and considering the magnitude of the need, how can you vote against it?” said Silverstein. “Anytime you have an effort to accelerate the productivity of a program such as this, it has got to be a benefit. It’s got to be additive. To the extent you can do that, you’re helping accelerate housing, which is what the city needs. These additions are very beneficial.”

A glance at recent industry news shows that building conversions seem to be gaining momentum. Earlier this month, GFP Real Estate and TPG Real Estate submitted a Buildings Department application to convert 222 Broadway, a 31-story, 750,000-square-foot office building, into 798 apartments at an estimated cost of $43.6 million. The two companies purchased the building from DWS in June for $150 million. CetraRuddy is listed as the architect on the project. GFP is no stranger to New York City conversions. The company is working with the Brodsky Organization and The Sorgente Group to convert the Flatiron Building into residential apartments, and is also working with Metro Loft and Rockwood Capital to convert 25 Water Street in Lower Manhattan. The same week as the GFP/TPG announcement, Commercial Observer also reported that RXR, in conjunction with fellow owner SL Green, is evaluating the potential conversion of all or part of the 1.1 million-square-foot, 39-story office tower at 5 Times Square into residential space. RXR is similarly evaluating the 34-story office tower at 230 Park Avenue.

In a July 2024 Manhattan CRE trends report that indicated a sharp rise in development activity from the second half of last year to the first half of this one, investment sales brokerage Ariel Property Advisors wrote of conversions as a reason for optimism regarding the office market. “The office market has shown signs of improvement driven by owner-user purchases, in addition to offices that are reportedly being converted into residential housing,” the report read. “This comes as a direct result of initiatives put forward by both the city and the state to make conversions more feasible and to help combat NYC’s housing shortage.” The report noted that sales of development sites totaling $1.12 billion represented 17 percent of transactions in the first half of 2024. “This uptick is largely due to the reported conversion of office stock to housing,” the report said. “In fact, approximately 50 percent of the entire dollar volume for the borough are reported conversions.”

“The notion has been that conversions are very difficult to do,” said Ariel’s Shimon Shkury. “You have to have the right zoning, the right floor plate, the right incentives when it comes to tax abatements. [Given the new programs], this is the beginning of what I think could be a trend. It is the first time we’re seeing this amount of transactions and discussions about office conversions.” The Department of City Planning has indicated that current conversion projects cover a vast range of project sizes, from the 1,300-unit 25 Water Street to 95 Madison Avenue, an office building that was purchased by Sunlight Development from the Sklar family earlier this year for $65 million, and will be converted into a 70-unit residential building. But Silverstein believes that as the universe of conversions broadens, it will ultimately make more sense for larger projects. “You need size and scale to make it a productive endeavor,” said Silverstein. “It takes the same amount of time and energy to do a larger building as it does to do a smaller one. So if you’re going to take your time, expertise and financial wherewithal to accomplish a conversion, it might as well be to something that is really productive. If it’s a small project, it really doesn’t have the attractiveness that would otherwise be the case for developers.”

As it happens, the total amount of space the new City of Yes rules could free up for conversion is anything but small time. “The rule changes would enable another 136 million square feet of office space to be eligible for conversion. That’s as much office space as exists in the entire city of Philadelphia,” said Garodnick. “We think that the rules that inhibit which buildings can convert are holding us back, and we think we could create another 20,000 new homes as part of all of this, which is a meaningful number.” This all adds up to a rare spate of good news on both the office and housing fronts. “With an office vacancy rate of 19 percent, office-to-residential conversions are a win-win,” said Garodnick. “They give relief to struggling real estate. They create much needed new housing. And they help us create more vibrant, 24/7 neighborhoods in our business districts. So, we are encouraged by what we are seeing out there.”

INTERNATIONAL MONEY LAUNDERING AESTHETIC, LIVE / WORK, AVAILABLE NOW
https://bostonglobe.com/boring-cityscapes-are-bad-for-your-health
https://thecut.com/the-psychological-cost-of-boring-buildings
The Psychological Cost of Boring Buildings
by Jacoba Urist   /  April 12, 2016

“New Yorkers have long bemoaned their city being overrun by bland office towers and chain stores: Soon, it seems, every corner will either be a bank, a Walgreens, or a Starbucks. And there is indeed evidence that all cities are starting to look the same, which can hurt local growth and wages. But there could be more than an economic or nostalgic price to impersonal retail and high-rise construction: Boring architecture may take an emotional toll on the people forced to live in and around it. A growing body of research in cognitive science illuminates the physical and mental toll bland cityscapes exact on residents. Generally, these researchers argue that humans are healthier when they live among variety — a cacophony of bars, bodegas, and independent shops — or work in well-designed, unique spaces, rather than unattractive, generic ones.

In their book, Cognitive Architecture: Designing for How We Respond to the Built Environment, Tufts urban policy professor Justin Hollander and architect Ann Sussman review scientific data to help architects and urban planners understand how, exactly, we respond to our built surroundings. People, they argue, function best in intricate settings and crave variety, not “big, blank, boxy buildings.” Indeed, that’s what Colin Ellard, a neuroscientist at the University of Waterloo and director of its Urban Realities Laboratory, has found in his own work. Five years ago, Ellard became interested in a particular building on East Houston Street — the gigantic Whole Foods “plopped into” a notoriously textured part of lower Manhattan.

As described in his book, titled Places of the Heart: The Psychogeography of Everyday Life, Ellard partnered with the Guggenheim Museum’s urban think tank to analyze what happens when someone “turns out of a tiny, historic [knish] restaurant” and encounters a full city block with nothing but “the long, blank façade of the Whole Foods Market.” In 2011, Ellard led small groups on carefully planned Lower East Side walks to measure the effect of the urban environment on their bodies and minds. Participants recorded their response to questions at each stopping point and wore sensors that measured skin conductance, an electrodermal response to emotional excitement. Passing the monolithic Whole Foods, people’s state of arousal reached a nadir in Ellard’s project. Physiologically, he explained, they were bored. In their descriptions of this particular place, they used words like bland, monotonous, and passionless.

In contrast, one block east of the Whole Foods on East Houston, at the other test site — a “lively sea of restaurants with lots of open doors and windows” — people’s bracelets measured high levels of physical excitement, and they listed words like lively, busy, and socializing. “The holy grail in urban design is to produce some kind of novelty or change every few seconds,” Ellard said. “Otherwise, we become cognitively disengaged.” The Whole Foods may have gentrified the neighborhood with more high-quality organic groceries, but the building itself stifled people. Its architecture blah-ness made their minds and bodies go meh. And studies show that feeling meh can be more than a passing nuisance.

For instance, psychologists Colleen Merrifield and James Danckert’s work suggests that even small doses of boredom can generate stress. People in their experiment watched three videos — one boring, one sad, and one interesting – while wearing electrodes to measure their physiological responses. Boredom, surprisingly, increased people’s heart rate and cortisol level more than sadness. Now take their findings and imagine the cumulative effects of living or working in the same oppressively dull environs day after day, said Ellard. There might even be a potential link between mind-numbing places and attention deficit hyperactivity disorders. In one case, physicians have linked “environmental deprivation” to ADHD in children. Homes without toys, art, or other stimuli were a significant predictor of ADHD symptoms. Meanwhile, the prevalence of U.S.adults treated for attention deficit is rising. And while people may generally be hardwired for variety, Dr. Richard Friedman, director of the pharmacology clinic at Weill Cornell Medical College, makes the case that those with ADHD are especially novelty-seeking. Friedman points to a patient who “treated” his ADHD by changing his workday from one that was highly routine — a standard desk job — to a start-up, which has him “on the road, constantly changing environments.”

Most ADD is the result of biological factors, said Dr. Edward Hallowell, a psychiatrist who specializes in ADHD, and co-authored numerous books on the subject, such as Delivered From Distraction: Getting the Most Out of Life With Attention Deficit Disorder But, he explained, he sees a lot of socially induced ADD, too, a form of the disorder that makes it appear as though you inherited the genes, although you really haven’t. And one way you might have the socially induced condition, according to Hallowell, is to suffer severe boredom or live in a highly nonstimulating environment. “It makes total sense that for these people changing where they work or live to add more visual stimulation and daily variety could be extremely helpful,” Hallowell said. At the same time, many adults may feel they have ADHD because the world has become hypersaturated with constant texts, emails, and input. For them, life has become too adrenalizing. “They don’t have true ADHD,” Hallowell said, “but, rather, what I call a severe case of modern life.”

So the trick, it seems, is to design a world that excites but doesn’t overly assault our faculties with a constant barrage of information: Scientists aren’t proposing that all cities look like the Vegas strip or Times Square. “We are, as animals, programmed to respond to thrill,” said professor Brendan Walker, a former aerospace engineer and author of Taxonomy of Thrill and Thrilling Designs. In Walker’s University of Nottingham “thrill laboratory,” devices gauge heart rate and skin conductance to see how people respond to adrenaline-producing experiences such as a roller-coaster ride. And he’s reduced “thrill” to a set of multivariable equations that illustrate the importance of rapid variation in our lives: A thrilling encounter moves us quickly from a state of equilibrium to a kind of desirable “disorientation,” like the moment before you rush down the hill of a roller coaster. “Humans want a certain element of turmoil or confusion,” he said. “Complexity is thrilling whether in an amusement park or architecture.” Environmental thrill and visual variety, Walker believes, help people’s psyche. As many of us instinctively feel a wave of ennui at the thought of working all day in a maze of soulless, white cubicles, blocks of generic buildings stub our senses.

It’s not only that we’re genetic adrenaline junkies. Psychologists have found that jaw-dropping or awe-inspiring moments — picture the exhilarating view of the Grand Canyon or Paris from the Eiffel tower — can potentially improve our 21st-century well-being. One study showed that the feeling of awe can make people more patient, less materialistic, and more willing to help others. In an experiment, researchers showed students 60-second clips of waterfalls, whales, or astronauts in space. After only a minute of virtual images, those who said they were awed also felt less pressed for time. In a second experiment, individuals recalled “an awe-inspiring” event and then answered a range of survey questions; they were also more likely to say they’d volunteer for a charity, as compared to those who hadn’t spent time thinking about a past moment of awe. And in yet another variation, people made hypothetical choices between material and experiential goods of equal monetary value: a watch or a Broadway show, a jacket or a restaurant meal. Those who recently “felt awe” were more likely to choose an experience over a physical possession, a choice that is linked with greater satisfaction in the long run.

In other words, a visual buzz — whether architectural or natural — might have the ability to change our frame of mind, making modern-day life more satisfying and interactive. It’s important to note, however, that architectural boredom isn’t about how pristine a street is. People often confuse successful architecture with whether an area looks pleasant. On the contrary, when it comes to city buildings, people often focus too narrowly on aesthetics, said Charles Montgomery, author of Happy City: Transforming Our Through Urban Design. But good design is really is about “shaping emotional infrastructure.” Some of the happiest blocks in New York City, he argues, are “kind of ugly and messy.” For instance, Ellard’s “happier” East Houston block is a “jumbled-up, social one”— the Whole Foods stretch, in comparison, is newer and more manicured. Sometimes what’s best for us, Montgomery explained, just isn’t that pretty. His research also shows cacophonous blocks may make people kinder to each other.

In 2014, Montgomery’s Happy City lab conducted a Seattle experiment in which he found a strong correlation between messier blocks and pro-social behavior. Montgomery sent researchers, posing as lost tourists, to places he coded as either “active façades” — with a high level of visual interest — or “inactive façades” (like long warehouse blocks). Pedestrians at active sites were nearly five times more likely to offer help than at inactive ones. Of those who helped, seven times as many at the active site offered use of their phone; four times as many offered to lead the “lost tourist” to their destination.

Fortunately, it’s not necessarily a dichotomy — new architecture can achieve the optimal level of cacophony and beauty. Take the 2006 Hearst Tower in midtown Manhattan. From the outside, the façade is likely to jolt city dwellers — if anything will — from their daily commutes, while “thrilling” employees who enter it each morning. Designed by Pritzker Architecture Prize–winning architect Norman Foster, Hearst Tower is a glass-and-steel skyscraper, 40 stories of which are designed in a triangular pattern contrasting the 1920s Art Deco base.

For many who walk by, Hearst Tower’s design may not be the easiest to understand; it’s both sleek and old. The top looks like it traveled from the future. Inside, workers travel upon diagonal escalators, up a three-story water sculpture, through the tower’s historic atrium” flooded with light. It’s not the view from the Eiffel Tower or the Grand Canyon, but it’s probably as close a modern lobby can come to awe-inspiring. Few New Yorkers who pass by would find this building boring. And they’re likely happier — maybe even nicer to each other — because of it.”

PREVIOUSLY

SECRET LANDLORDS
https://spectrevision.net/2020/01/08/secret-landlords/
EXPERIMENTAL CITIES
https://spectrevision.net/2021/03/22/experimental-cities/
TAXING BLIGHT
https://spectrevision.net/2023/06/14/taxing-blight/

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