Why Edison Properties Chose Adaptive Reuse For Ironside Newark
Interior demolition is well underway and scaffolding and sidewalk bridges have been erected at Ironside Newark, Edison Properties’ redevelopment of the former Newark Warehouse into a mixed-use office and retail mecca.
When Edison Properties looked at all the parcels it controlled around the area, it ultimately settled on the redevelopment of the circa 1907 warehouse, which allowed freight trains to load, unload and store goods, said Michael Sommer, the company’s executive vice president of development.
The six-story building will be transformed into 456K SF of modern loft-style office space on the top floors (including a seventh-floor glass penthouse) and a two-story atrium surrounded by retail on the lower floors. The retail and restaurant space will front Mulberry Commons, which is on grade with the building’s second floor.
But why redevelopment versus building anew? It was an easy decision: The warehouse has unbelievable bones considering its age, as well as the capacity to not only carry the loads Edison Properties is proposing, but more, Sommer said.
It also has character that cannot necessarily be re-created, he said, including exposed ceilings with beams and rivets and polished concrete floors — very different from the typical office building that rises in Newark, allowing Edison Properties to differentiate its product from competitors.
Besides aesthetics, there are multiple reasons to consider repurposing buildings, Sommer said. For one, it reduces risk that comes with building new.
“Even if you do all your investigations from a geological and environmental standpoint, you never know what you’re going to find in the ground,” he said.
It also makes sense from a financial standpoint. Even though developers are taking on additional costs of adaptive reuse, having good bones can reduce construction costs by a significant amount since they do not require as much structural work, he said.
In the first quarter of 2017, construction costs for nonresidential buildings increased 1.29% over the previous quarter, reflecting a 5.05% increase year-over-year, according to Turner Construction’s quarterly building cost index. There were also moderate gains among raw material prices, particularly metals like steel and iron.
And when the existing building is near transit, like Ironside Newark is to Penn Station, it makes the decision even more of a slam dunk. More developers in New Jersey will seek out those types of projects, he said.
But what Edison Properties has learned from its previous projects — which include warehouse conversions into Manhattan Mini Storage locations and the modernization of Manhattan’s Hippodrome at 1120 Avenue of the Americas — is that you cannot fit a round peg into a square hole. Despite infrastructure being important, the real estate adage of “location, location, location” is still king.
“That’s why we didn’t have to think long and hard about Ironside Newark, given its location on McCarter Highway, proximity to transit and being inside the center of gravity in Downtown Newark,” he said.
Sommer will be speaking at Bisnow's Repositioning and Redeveloping New Jersey event at Bell Works on June 20.