For more than a dozen years, a 1905 warehouse—originally a shoe factory, then home to a textile manufacturer, and, finally, Class C offices—sat vacant on the northern edge of Philadelphia’s downtown Center City neighborhood. Copper was stripped from the building, most windows were broken, the homeless squatted, and the overall look resembled a war zone. Surrounding streets reflected a similar malaise.
Several developers had recognized the area’s potential because of its proximity to downtown and two major roads, the Vine Street Expressway and I-676. But each time, they found that construction costs due to the city’s powerful unions, and comparably low likely rents, made generating a profit difficult.
One development team waited patiently. Brothers Mike and Matt Pestronk had eyed the area, part of the Callowhill Loft District, and saw the 10-story warehouse as a way to gain a toehold. A bank was in the process of taking back the building after the 2008 crash. The brothers purchased it in a short sale for $5 million, less than half the $12 million a prior developer had paid.
“We like to buy properties where the seller is motivated,” says Matt, 36, and president of Post Brothers Apartments. Adds Mike, 32, and CEO, “We knew that converting it into apartments would appeal to young professionals wanting to be near work and in a cool, emerging neighborhood—people like us,” he says. They renamed it Goldtex Apartments for the textile firm that had occupied it for 50 years.
From Gray to Green
Although they had previously rehabbed nearby apartment buildings for residential use, this was the first time the brothers, who grew up in Virginia but went to college in Philadelphia, undertook an adaptive reuse. To make the economics work and appeal to their target demographic, they decided to make it one of the greenest rental buildings in the city.
“Even though a lot of people don’t ask for green, if you build it that way, we believed they’d come,” says Matt. And because they felt the area needed more services, they set aside 6,000 square feet at ground level for retail, including a restaurant.
Most architects they interviewed suggested a typical rehab that would retain the historical cast-concrete façade. But they hired KlingStubbins, an architecture and engineering firm with an office in Philadelphia, because it suggested floating an insulated, 6-inch skin of glass and aluminum off the façade, along with one living green wall. New, wide, horizontal bands of aluminum composite play up the residential use and replace the vertical bands typical of period commercial buildings.
Among the building’s greenest features are wind power and a cutting-edge VRF (variable refrigerant flow) system that captures heat energy drained from exhaust fans. There are also energy-efficient appliances and lighting and sound-attenuating insulation.
To encourage socializing, the developers looked both indoors and outdoors. The rooftop—planted with native materials and irrigated by captured rainwater—features a glass-enclosed gym that looks toward the city’s skyline, an outdoor pool, hot tub, kitchen, tanning area, and deck.
The first floor, meanwhile, offers a lounge/business center, dog-washing station, and bike storage. Parking was built below ground with an electric charging station. Wi-Fi is everywhere. The 163 units range from 400-square-foot studios, at $1,400 a month, to 1,800-square-foot three-bedrooms, for $3,500 and up.
The prime challenges of doing an adaptation versus a straight rehab were a longer timetable and a higher price tag, which totaled $40 million. “But we felt it was worthwhile,” says Sarina Rose, vice president of development. Adds Matt, “The building went from the worst structure in the area to one of the best.” The brothers expect full occupancy by late spring 2014.
The neighborhood association also is delighted with the transformation, which president and artist Sarah McEneaney says adds to the area’s now “artsy, funky vibe.”
Even more noteworthy may be that the building has spurred other residential growth, improved the status of existing buildings, and helped convince area activists to convert an elevated rail line into a park similar to New York City’s High Line.