Church conversion to apartments

[Frank Maratta]

Hi everyone. I have an opportunity here to create apartments out of two historic church buildings. The church, and the second rectangular building to the left comprise about 19k-20k sq ft total. It has adequate parking.  Obviously very early in the deal and discussions with the town right now but they seem to be on board with my interest in conversion to multi family. They have an interest in bringing up this corner of the street and re-purposing these beautiful historic buildings.  I have not spoke with them yet about tax breaks or grant money. 

I have never taken on a project this large, however The two church buildings can be bought for $500k.  My natural instinct was that there is no way that the numbers can’t work here, buying a shell that can house 25 apartments for only $500k. But as I’ve done more research, I’ve come accross many people who view the shell as nearly worthless, and comming out of the ground with new-construction can actually be cheaper.  If 25 apartments cost me nearly $5m to retrofit here, then the numbers don’t make sense. Each unit would have to rent for around $1900, and I don’t think the market in this city would support that. Although,  the city is comming up.  Average rents for a 1 bed are $1000-$1200 and a two bed $1200-$1400.  

Does anyone have expierance with repurposing buildings of this sort into apartments, and if you do, what were your costs like per sq/ft ? 

Any input here is appreciated, im interested in what you guys think