As downtown Salt Lake City’s boom in residential construction rolls ahead, developers have purchased a high-profile office tower along South Temple with plans to convert it into luxury apartments.
Hines, a global real estate company based in Houston, said work on the white 24-story office building known to longtime residents as the University Club Tower, at 136 E. South Temple, would begin in early 2023 and transform it into 255 high-end studios and one- and two-bedroom dwellings.
Crews will strip the rectangular office building “to its core,” Hines said, and repurpose it “for high-quality residential living at a time when the Salt Lake City market is starved for much-needed housing.”
The privately held firm said its recent purchase of the 216,976-square-foot high-rise — for an undisclosed price — came after an extensive analysis showed it met requirements for walkability and natural light, and that the shape and overall floor plan of the building were conducive to creating that many apartments.
Taking an adaptive reuse approach as opposed to new construction, the firm said, will lower carbon emissions by limiting use of new building materials, particularly concrete, an industry staple that also produces large amounts of carbon dioxide to make. Updating the building’s mechanical systems, Hines added, is also expected to lower emissions over its life cycle.
Downtown real estate is shifting focus
The announcement comes as several new office towers have opened or are being built downtown, even as office spaces across the country are seeing some of their highest vacancy rates in three decades, depressed by the effects of the pandemic and work-from-home trends.
At the same time, demand for homes — for rent or purchase, at all price levels — have reached new peaks, although there are signs that could begin to ease as interest rates rise.
Salt Lake City’s trend toward luxury housing, meanwhile, has fueled frustration among those who point to the region’s dire need for more affordable homes as home prices and rents continue to shoot upward.
Referring to the city’s “immense growth” during the past decade and an undersupply of housing, Dusty Harris, senior managing director for Hines, said the company “is stepping in to fill a need amongst the city’s residents.”
“We’re finding a creative solution for a building, which is not being well used, by converting to a use that the community needs,” Harris said in an interview. “We’re excited about that, and we think there’s a lot more of this to come probably. A lot of people in the real estate industry are thinking about this.”
And while it won’t directly produce moderately priced housing, he said, “our view is that the city needs housing of all types and this is certainly helping to meet the demand of more housing in the community. And just adding to the housing stock should help ultimately make the market more affordable.”
The South Temple tower will be a choice residential location, Harris said, for its proximity to downtown amenities, landmarks and mass transit as well as its views of the Salt Lake Valley.
Located just east of the Alta Club near the intersection of State Street and South Temple, Hines’ latest acquisition in Utah was renamed the South Temple Tower in 2015 after a $10 million overhaul by a previous owner, San Francisco-based Maier Siebel Baber.
That renovation restored some of tower’s original historic character, enhanced its exterior, created a two-story lobby and entry plaza on South Temple and improved vistas from some of its upper floors.
County property records show the building, constructed in 1965, and its 0.61-acre lot were valued at $55.7 million as of last year.
Surge in high-end, high-rise living
Hines also is finalizing designs on a 31-story luxury residential tower dubbed 150 South Main Street Apartments, located on the site of the now-demolished Utah Theater on Main Street, with 400 apartments, 40 of them rent-subsidized.
The international developer’s two proposed residential towers join several similar projects launched in recent years amid an apartment construction boom and what is projected to be growing demand for luxury high-rise living in Utah’s capital, especially among better-paid workers relocating to the urban core.
The 21-story Liberty Sky, at 151 S. State, opened this year. Built by Utah-based Cowboy Partners with 272 luxury units, it marks the city’s first rental project above the 200-foot mark.
In what will soon be Salt Lake City’s tallest skyscraper, crews for Boston-based Kensington Investment broke ground in January on Astra Tower, at 200 S. State St. That will stand 450 feet and 40 stories high when completed in fall 2024, with about 372 luxury apartments.
A recent study identified a record-breaking 3,974 new apartments under construction downtown and projected that their rents would likely be at least 30% higher than elsewhere in Salt Lake County.
Researchers also pegged prevailing apartment vacancy rates in Salt Lake County at a record 2% or below, which ballooned average rents by 10.1% in 2021 alone.
from The Salt Lake Tribune https://ift.tt/s5ZzIdb
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