Instead of an office building could the interiors not have been stripped, re-aligned where necessary, modernized and the exterior restored for quarter-floor and half-floor upscale condos?
Okay, I’m not singling you out here, but this is a RAMPANT problem here. Do you want to be the benefactor (because that’s what it would be, you couldn’t call yourself an investor, only someone willing to lose money for their wants and desires– hence a benefactor) for this endeavour?
You’re proposing that the building be lovingly refinished, the floors which don’t work changed structurally so they can, come sort of insanely expensive (because god knows it can’t change the look or feel of the building or its historical ingress/egress points) handicap accessibility built in, new HVAC, new fire systems, new roof, probably new windows, engineering work, sales staff, architecture for the new units, new common areas etc… PLUS the build out of the condo units! And you want luxury right? So the finishes everywhere have to be high end. Do you want to add PATH access too?
How much is that going to cost in total? $20 million? $30 million? $50 million? More? Plus you have to buy the building (or are you assuming that a pension fund whose fiduciary duty is to make money for all of the retired municipal workers in the province is going to do this money losing endeavour?). The building is worth in the state it is now probably around $15 million (and I’m being generously low). So let’s say we’re all in for $50 million? I think that’s extremely low but let’s go with it.
So then you have 14 floors, let’s call it half ¼ floor suites and half ½ floor suites. That’s 42 suites. $850k for the ¼ floors and $1.75mln for the half floors? That makes it a nice $48.3 million income. Which almost covers the costs!
Or you can make a building which will cost about $500 million to build. You spend more to keep and maintain as much of the historical old building as possible while also creating a space which helps the economy through 1.5 years of major construction employment, 1000’s of workers working in the building for years afterwards and creates A FEW HUNDRED MILLION DOLLARS IN PROFIT for your pensioners (which is the owners job!).