10K SF commercial, maybe mixed use building East Providence RI

[David Sisson]

About 3 months ago I purchased a commercial building in East Providence RI. This is about a 3500 SF footprint, on 3 levels, including the basement. The intention of this property is to move my architecture firm into & also have some rentable space to help finance the whole thing. It's a 1940 era concrete block building, with 12 foot wood ceilings, wood floors, industrial windows. We took a loan to renovate the first floor into 2 rentable units - 1300 SF and 1400 SF. I'm planning on putting my office on the 2nd floor (GSF 3500) - although I don't need this whole floor.

One of the challenges is rehabbing the building vs cost - a lot of delayed maintenance on the building (it was simply a storage warehouse for 30 years). My long term goal is to convert it to apartments or live/work units, but right now the best my budget can do is basic commercial space (white box). 

My goal of this diary is to hopefully get some advice, and some creative thinking going. In my area, small commercial spaces (class C or D commercial) do seem to be renting, but the market is much hotter for residential. Unfortunately, my cost for electrical, HVAC, plumbing, & fire protection is too high to do the residential conversion right now. Just getting one floor white boxed is taking all the $. 

Posting a couple of photos here

Exterior - front - we repainted two sides, to give it a bit more curb appeal. Obviously, it's  a basic industrial building. One thing I liked was that it already had 3 gas meters and 4 electrical meters, so it came with a bit of what we needed to split it to multiple units. Plenty of power supplied to the building.

One of the units under construction. 

Another interior shot. The block walls have been primed, and a big stack of windows waiting to get installed (to replace all the small ugly windows you can see in this shot). This unit looks horrible in this picture...but I'll post another one soon showing the windows installed and the walls painted. 

Here's one with some of the windows installed

One thing I'm mulling over is the conversion to residential. We'd probably max out at 10 one bedroom units (about 600 SF each) or could do fewer larger units. Although I'm an architect, I'm having a bit of trouble wrapping my head around the code requirements for live / work, especially in terms of HVAC (can we use the ceiling hung heaters or do we need new residential HVAC systems?), electrical (can we use the existing circuiting, or do we need new AFCI circuits everywhere?), and plumbing (can I do shared baths outside the units (allowing me to reuse existing baths - or do I need to build private baths inside each unit?). Getting solid answers on these questions could be huge in terms of the $. Obviously, any advice would be great. 

[Anthony Thompson]

@David Sisson Have you talked to the city building/planning department to figure out if they will be in favor or against your proposed use change? I'd also recommend talking to owners of neighboring properties if the opportunity arises, since I believe their input will be solicited for any potential zoning changes.

Aesthetically, I like your exterior painting (and nice budget move only doing the 2 visible sides!), and I can see that changing the windows will do amazing things inside the space (almost literally "night and day").

Taking a step back, my general idea is "do one thing and do it well" - so if it were me with that building I'd probably pick a course as far as office/commercial or residential and stick with it. But if the town is in favor of (or not opposed to) a more creative use then maybe there's an opportunity there.

I'd also say, think about if you ever decided to sell the building and who your potential buyers would be. How many people are going to want to buy a mixed office/residential building, versus one that's simply offices/commercial, or simply residential. Not to say that mixed is the wrong move, but I do think it's a more limited resell market so something to consider.

Lastly, I have not done this, but in the recesses of my brain there's a concept of a "highest and best use study". I have no idea if this project is a good case for such a study, or how much it would cost, but as long as you're opening up the can of worms of changing the present use, it might be something worth looking into (even if you ultimately say, that would cost too much for this building/project to make it worth commissioning such a study).