Taconic Tackles NY Multifamily Adaptive Reuse

MIAMI—Taconic Investment Partners is moving and shaking on the New York multifamily scene. The company has a solid pipeline and a strategic focus on adaptive reuse projects in its toolbox.

In part one of this exclusive interview, we caught up with Kevin Davis, Chief Investment Officer for Taconic, to discuss general multifamily trends. Now, we're diving into adaptive reuse projects and the opportunities they are creating for developers.

GlobeSt.com: How are adaptive reuse projects creating opportunities for developers?

Davis: In certain neighborhoods in New York City, especially within Brooklyn but also in Tribeca, many renters and buyers prefer to live in converted/retrofitted buildings that not only have unique character, but also fit into the charm and feel of the surrounding neighborhood.  In Tribeca in particular, there is strong demand for full-service luxury properties with architectural significance, like The Sterling Mason.

GlobeSt.com: When does the adaptive reuse strategy work? When does it not work? What factors help you decide whether to pursue the opportunity?

Davis: Adaptive reuse works when you start with a well-built building. We look for buildings with high-quality construction, preferably concrete, abundant light and air, and floor plates that translate well for residential use. The existing structure must be well-built and well-positioned on the site for the project to be a success.

GlobeSt.com: Does adaptive reuse tend to work better in some markets than others?

Davis: Adaptive reuse is most compelling in neighborhoods where the existing population gravitates to buildings with character. A great example is Williamsburg, Brooklyn; conversions lease there at a premium compared to new construction.

GlobeSt.com: How does the ROI pan out on renovation project compared to ground-up construction?

Davis: The ROI is typically lower for a renovation project than it is for a ground-up development, but so is the associated risk. A renovation project can generate income through the renovation process, depending on the degree of renovation, whereas a ground-up development does not.