CCIM expertise and resources can make reuse a reality.
greatest thing about CCIM is the people I’ve met,” says John Lauriello, CCIM,
principal of Southpace Properties in Birmingham, Ala. Those connections, as
Lauriello discovered, can make or break niche conversion projects.
Last year, he was retained by the local
YMCA to find land in Birmingham’s Hoover area for a new facility. “I was
looking for A sites, but everything that was available was B or C,” says
Lauriello, who also serves on the Y’s board. He had his eye on a 55,000-square-foot
vacant grocery store and eventually told the YMCA that a conversion might be
the best play.
But the Y turned it down.
Lauriello had an architect and a contractor
look at the space anyway. They confirmed that the space could meet the Y’s
needs. “We also determined that the Y could save $3 million to $5 million if
they converted the vacant space instead of buying land and developing,”
When Lauriello went back to the YMCA board
to re-pitch the property, he enlisted the help of fellow designee and Y board
member Timothy S. Blair, CCIM, principal with Shannon Waltchack in Birmingham. Blair’s
support as a “polished real estate expert” helped convince the board that
converting the vacant property was the best course of action.
That crucial CCIM connection wasn’t a
coincidence. “Locally, I’ve been a mentor to Tim and others,” Lauriello says.
“If someone wants to get into this business, I tell them that they need to
commit to the CCIM program.”
But it’s not just the education and
networking that help close these deals. Andrew D. Hyde, CCIM, broker with
Select Realty Advisors in Cherry Hill, N.J., uses CCIM technology resources to
identify self-storage conversion opportunities. “The key is to find a large
building in an undersupplied location with high traffic counts,” he explains.
“STDB is the perfect place to start.”
In 2004, Hyde found a functionally obsolete
industrial building that met the three basic criteria for self-storage
conversion: It was between 60,000 sf and 100,000 sf; it exceeded the minimum
traffic count of 17,000 vehicles per day; and the area’s self-storage supply
was only 2.5 sf per person, well under the national average of 7.5 sf per person.
“I downloaded STDB business lists, then uploaded them to a map and zoomed in on
the aerial images to measure rooftops of competing self-storage facilities,”
Hyde says. “The storage supply, combined with data from the STDB demographic
reports, enabled me to calculate supply levels.”
Today, conversions and adaptive reuse
remain a viable option for investors interested in self-storage, Hyde says.
Obsolete big-box retail locations, which are readily available in many markets,
are particularly well-suited for these projects. “Usually they offer interior
space that can be converted for climate-controlled storage, as well as a
parking lot that can be built-out with single-story drive-up storage,” he
But it ultimately comes down to whether the
numbers make sense. When this question arises, Hyde turns to STDB.
For more CCIM-led conversion projects, read "Beyond the Facade," which appears in the July/August issue of CIRE.