As the development in the commercial real estate market almost come to a halt in the economic downturn, some well-capitalized commercial developers are focusing instead on sprucing up existing properties.
The process is usually referred to as retrofitting, renovating, repurposing, or even repositioning. However, the underlying idea is the same—to wring out more value at a time when the rents can not support new construction.
In New York, prominent buildings, such as the Empire State Building and 500 Fifth Avenue, are being rehabilitated. Meanwhile, 475 Park Avenue South will get a $25 million renovation and face-lift led by the architect César Pelli. Refurbishments have just been completed at the former International Toy Center, 200 Fifth Avenue, as well as 545 Madison Avenue.
Though not all of these projects have a direct tie to the economic recession, many do, such as the one started by the Hampshire Real Estate Companies. The company plans to spend about $16 million to upgrade a quite normal four-story suburban office building—Centra, at 186 Wood Avenue South in Iselin, N.J., near the Metropark train station.