This story was reported and written by Mark Heschmeyer, with design by Jelena Schulz.
Many U.S. buildings turning 100 years old this year are thriving. Some are still offices, their originally intended use. In other cases, conversions have taken place to accommodate the daily bustle of corporate life.
The longevity and durability of centennial buildings have been supported by factors including their often iconic nature, the dedication of a string of owners over the years who have maintained and enhanced them, and cities and communities making efforts to preserve their histories.
There are 144 buildings of 100,000 square feet or larger that opened between 1920 and 1922 still widely in use as office buildings, CoStar data shows. Noteworthy properties include Detroit’s 1.7 million-square-foot Cadillac Place, the original home of General Motors, and the 752,400-square-foot 11 Wall St. in Manhattan, the 23-story annex of the New York Stock Exchange.
At a time when offices face a demand challenge in the form of hybrid work styles in the pandemic, the elder buildings are performing better than their U.S. office counterparts built since 1923, according to CoStar data. They have a higher occupancy rate, 79.3% versus 77.3%; higher market rents, $38.45 per square foot versus $36.87; and have sold at higher average prices, $405 per square foot versus $355.
Buildings about 100 years old were among the first of an era that combined cheaper building materials and technologies. Advancements in the use of steel, reinforced concrete and water pumps allowed for a wave of construction and such ornamentation as terra cotta in a range of colors. Engineers and architects advanced the proliferation of unique properties and styles that helped define cities across the country.
In 1922, construction began on the original Yankee Stadium in New York, and in Los Angeles, the Hollywood Bowl amphitheater began hosting performances.
The decade was a time of economic prosperity in the United States, emphasizing social, artistic and cultural dynamism. Jazz blossomed. Art deco peaked. The large-scale development and usage of automobiles flourished. Rapid industrial and economic growth, as well as accelerated consumer demand, introduced significant new cultural trends.
Buildings reflected this cultural change. In fashion, silk stockings emerged as a popular accessory, and Dye House in Milwaukee was home to a stockings manufacturer. Flash forward to this April, and Switzerland-based SoftwareOne signed a 19,500-square-foot office lease in Dye House, making it a fitting example of how 100-year-old buildings are keeping pace with the times.
Singerman Real Estate acquired the property in pieces starting in 2017 from members of the family that had owned the building since its opening in 1922, Adam Parritz, asset manager for Singerman, told CoStar News. The building, which originally housed the dyeing facility for the Phoenix Hosiery Co., now has a six-story mural of a female worker with worn hands featured prominently on its side as a nod to its past.
Singerman converted the first floor to retail condominiums, with floors two through seven becoming office space and the eighth floor residential. The investor bought the ninth-floor penthouse late last year.
“We had a relationship with the owner of that unit,” Parritz said. “He had retired to travel the world. So, it was time for him to sell the unit, and we were able to very happily acquire that condo because he had exclusive rights to the rooftop. We acquired that so that we could regain access to the roof and open it up as an amenity for all the occupants.”
As hybrid work models stake their claim in the workforce, SoftwareOne was in the market to find an environment that would support its employees. The company said it chose Dye House because Singerman equipped it with the latest technology to support out-of-office and in-person operations.
Wrigley Building Revamp
Bob Six, as a Building Owners and Managers Association fellow and CEO of Zeller Realty, attested to the canvas that firms have when working with historic buildings. Zeller handles leasing for the Wrigley Building in Chicago owned by Mansueto Office, which acquired the 509,368-square-foot, two-tower complex in 2018 for $255 million.
The Wrigley Building, located downtown on Michigan Avenue overlooking the Chicago River, celebrated its 100th anniversary last year.
Zeller was a partner-manager of the property with the previous owner, BDT Capital. Together they undertook a $70 million renovation of the building that upgraded lobbies, elevators, restrooms, windows, and the electrical, plumbing and climate systems. They also added a new conference center.
The redevelopment removed various additions put in over time, restoring the complex to its original design. The expansive plaza was transformed into a two-level, 50,000-square-foot dining and shopping destination. The renovation won a BOMA/Chicago outstanding building award in 2017.
BDT was able to take advantage of opportunities for tax credits from the city of Chicago in financing the modernization, Six told CoStar.
“That allowed us to invest the money that was needed to return the building to its original glory and beyond,” he said.
‘Have a Story’
Mark Stoner, senior director of preservation architecture for the National Trust for Historic Preservation, agreed that combining the iconic quality and history of older buildings with current-day standards helps bolster their attractiveness to potential tenants.
He said four factors make any building viable as a leasing alternative: location; comfortable temperature and humidity; lease price per square foot; and amenities.
“All four of those things transcend the age of your building,” he said. “But the one thing, though, that a building from the 1990s compared to a building from the 1920s doesn’t have is this intrinsic historic character. ... I would say have a story.”
The smart owner is the one who can bring that story to life for older buildings, according to Stoner.
“You need to provide a building that people want to be in and that tenants want to provide to their staff,” he said. “That gets to amenities and to character. [Tenants] want to be in places that inspire them, and if a space doesn’t inspire them, they may just be more inclined to work from home.”
Turning 100
Besides Cadillac Place, 11 Wall St. and Dye House, here is a sample of other notable office properties celebrating their centennials this year:
The Reserve Center is an 18-story, 638,500-square-foot property primarily housing the Federal Reserve Bank of Chicago. When the U.S. declared war on Germany in April 1917, the Chicago bank led the effort to fund the war through the sale of Liberty Bonds. The bank sold $3.29 billion in bonds by the end of the war, the largest subscription per person in any of the Federal Reserve Districts. That effort paved the way for the bank’s expansion into the new space in 1922. The Reserve Center also houses the Fed’s Money Museum.
The Falchi Building is a five-story, 711,194-square-foot building in the Long Island City neighborhood of Queens, New York. It opened in 1922 as a warehouse and distribution facility for the famed Gimbels department store. Savanna Real Estate Fund acquired the building in 2016 for $255 million and has been implementing a comprehensive capital improvement program, positioning it to meet the demands of today’s office tenants by upgrading systems, modernizing elevators, and renovating common corridors and bathrooms.
The Wharfside Building is a six-story, 515,862-square-foot building in San Francisco’s Mission Bay/China Basin market owned by McCarthy Cook & Co. Southern Pacific Railroad opened the landmark building in 1922 to serve as a warehouse to support shipping operations. As shipping volume declined in Mission Bay, the area underwent a change in the late 1990s with the construction of the San Francisco Giants’ new ballpark and the University of California San Francisco committing to building a campus and biotechnology hub in the area. The Wharfside Building is one of two neighboring structures converted from their industrial use into a creative office, life science and technology campus. The rectangular floor plates were outfitted with the latest information technology infrastructure.
The Investment Building is a 13-story office building in Washington, D.C., acquired by Ponte Gadea USA, an investment fund backed by Spanish billionaire Amancio Ortega in 2018 for $384.5 million. The seller was a joint venture of Washington real estate investment trust JBG Smith and JPMorgan Asset Management. An extensive interior renovation and redesign of the building done by architect César Pelli was completed in 2001 with essentially only the facade of the building remaining intact. Upon completion of that project, the building sold for $144.7 million.
The Bowen Building, a historic trophy building, is a nearby neighbor of the Investment Building in Washington and had shared ownership. JBG Smith sold the building to JPMorgan Chase Bank for use as its Washington headquarters for $140 million in May 2018. Located at the corner of 15th and Eye streets, it is just two blocks from the White House on McPherson Square. The building was restored and redeveloped by integrating original beaux-arts architectural elements.
The Stark Building, formerly known as the Hartford Trust Company Building, opened for business in 1922 to complement the Old State House in Hartford, Connecticut. This 18-story architectural masterpiece is listed on the National Register of Historic Places and is the oldest high-rise commercial building in downtown Hartford. The first payphone in the country was installed at the intersection now housing the building in 1889. In 1998, the building was purchased by Houston developer Boxer Properties for $1.5 million. Following upgrades, it was sold in 2017 to Stark Office Suites for $4.3 million.
Andover Landing at Brickstone Square is a landmark three-building business campus totaling over 1 million square feet in Andover, Massachusetts. The Class A campus in Andover’s historic downtown offers connections to nearby highways. Owners KS Partners acquired the property in September 2014 for $59.5 million. After undertaking extensive renovations that included a new main entry lobby, cafe, lounge, fitness center and conference center, KS recapitalized the property in May 2017 at a value of $90 million.
The Stephen L. Brown Building at 197 Clarendon St. in Boston was designed by Parker, Thomas and Rice. The eight-story, 422,000-square-foot building opened in 1922 as a four-story structure with a center tower extending six floors. In 1924, Parker, Thomas and Rice received the Harleston Parker Medal for its design. In 1928, an additional four stories were added for a total of eight stories. Originally known as the John Hancock Life Insurance Company Building, it was renamed in the early 2000s in honor of Stephen L. Brown, chairman of John Hancock Financial Services. The building was LEED certified in 2009. John Hancock and Manulife employees occupy 100% of the building.