Hines is increasing into office-to-apartment conversions with its acquisition of the 24-story South Temple Tower in Salt Lake Metropolis, which the Houston-based international actual property agency plans to rework right into a 255-unit luxurious multifamily.
Development will start early subsequent 12 months. The acquisition was brokered by Newmark; Hines didn’t disclose the vendor or the phrases of the transaction.
The residential tower will function a variety of condo sizes and kinds, together with studios and one- and two-bedroom models, with a collection of residential facilities to be designed by structure and design kind Hickok Cole. The South Temple Tower gives unobstructed views of town skyline, the state capitol and the Wasatch Mountains.
Hines will strip the constructing to its core and shell, take away all the present places of work and restructure the constructing to create an environment friendly residential ground plan.
Hines mentioned it performed an intensive evaluation of the South Temple Tower earlier than the acquisition to make sure the constructing was appropriate for conversion, evaluating the constructing’s walkability, pure gentle, the form of the constructing and the variety of potential condo models.
Hines is planning to cut back the embodied carbon within the development supplies that will probably be used for the adaptive reuse of the constructing, together with limitations on using concrete. Vitality-efficient mechanical techniques additionally will probably be deployed to cut back the constructing’s operational carbon emissions.
The constructing’s location in Salt Lake Metropolis faucets into a good housing market with rents which have risen 20% YOY in Q1 2022, however nonetheless reasonably priced compared to the US nationwide common.
“Downtown Salt Lake Metropolis is experiencing immense development, with Utah having the second-highest inhabitants development within the nation over the past decade and there’s an undersupply of housing,” mentioned Dusty Harris, senior managing director of Hines, in an announcement.
Greater than 14,000 new multifamily models have been in development throughout Q1, most of them being constructed within the city middle. Regardless of the inflow of latest stock, Salt Lake Metropolis’s demand is more likely to proceed to maintain outpacing provide.
In line with a latest report from Yardi Matrix, Salt Lake Metropolis’s status for affordability is fueling in-migration from dearer West Coast markets.
“Low stock pushed some renters towards single-family communities, which have seen file lease development,” the report mentioned, noting that common occupancy charges in Salt Lake Metropolis have been as excessive as 97% in Q1 2022.