comscore Old post offices have timeless allure as work space | Honolulu Star-Advertiser

Old post offices have timeless allure as work space


    The former main post office building in downtown Chicago on Jan. 26. A real estate firm is taking a crack at reviving the Art Deco behemoth, vacant since 1997, one of several major postal building redevelopments in the works around the country.

The Postal Service moved out of its longtime main post office in downtown Chicago in 1997, but ideas for remaking the Art Deco behemoth never gained traction. The huge building sat vacant, a far cry from the time when workers could sort up to 35 million letters a day there and residents posted mail in its elegant lobby, an airy space with stone floors and decorative panels.

Now, the real estate firm 601W Companies is taking a crack at reviving it. With a $500 million construction loan in hand, 601W is transforming a place once known for catalogs and stamps into a 2.8-million-square-foot office building called, simply enough, the Post Office.

The project is one of several major postal building redevelopments in the works around the country, including in New York and Houston. With their central locations and warehouse areas that can be converted into new uses, older postal facilities are seen as tantalizing candidates for transformation.

“Truly unique postindustrial space can’t be replicated, especially in great locations,” said Matt Garrison, a managing principal at R2 Companies, a Chicago real estate company that bought a 1.1-million-square-foot postal distribution center in downtown Milwaukee from an investor in 2015. “It’s very finite in supply. That’s what makes the spaces special and unique — you can’t fabricate it.”

R2 plans to redevelop the property in Milwaukee primarily as an office building, though the Postal Service is still using it.

In Chicago, 601W bought the old postal structure in May 2016 from a British investor. Since then, workers have been replacing windows, hauling away debris and preparing to install new building systems inside.

The redevelopment will turn former mail-processing areas into uncommon office spaces, taking advantage of expansive spaces with 19-foot-high ceilings, said Brian Whiting, president of Telos Group, a Chicago brokerage firm looking for tenants to fill the building. The biggest floor space stretches 285,000 square feet.

“It’s very simple,” Whiting said. “We’re building a building to attract a younger workforce that is calling for more open, collaborative, neighborhood-feeling space.”

Amenities will include a “Gatsby-esque” lounge, a big gym and a quiet working area modeled after a university library. The former lobby will serve as the main entrance for office workers.

The scale of the property, about three city blocks long, will allow for “environments that smaller buildings can’t possibly do,” Whiting added. “It literally allows us to create an entire neighborhood in the building, or multiple neighborhoods in the building to give people that work community they’re really looking for.”

Two developers, the Related Companies and Vornado Realty Trust, are making a similar bet on the James A. Farley Building in New York, a building completed in 1913 that features a facade with Corinthian-style columns along one side. Across from Pennsylvania Station, the property will be turned into a train hall named after Sen. Daniel P. Moynihan, who died in 2003.

Amtrak and the Long Island Rail Road will use the rail capacity that Skanska, the Swedish construction contractor, has been constructing at the site. Vornado and Related will focus on about 588,000 square feet in the building’s second through fifth floors and on bringing in new tenants to retail areas on the first and concourse levels. The Postal Service will retain offices on the third floor.

The prospect of converting the upper-floor mail-processing areas into offices made the Farley property stand out, said Andrew Rosen, a senior vice president at Related. Such spaces are rare in New York, he said, but in demand from technology, media and other companies.

“It’s two full city blocks. It’s up to 200,000 square feet on a floor and a really open space with great light” and transportation links, Rosen said. “You end up with something that’s very unique.”

Lovett Commercial, a developer in Houston, plans to turn the former Barbara Jordan Post Office near that city’s downtown into a commercial hub as well. Lovett acquired the property, built in 1962 in the Brutalist style, from the Postal Service in 2015.

The building is “sort of a relic of Houston’s golden age,” said Kirby Liu, director of development at Lovett. “That’s a heritage we wanted to preserve. It’s an orientation of the past that we want to bring into the future.”

In a former two-story warehouse on the property, Lovett wants to create spaces for shops, artists and food purveyors on the ground level and office areas geared toward creative companies on the second floor. The old 5-story office component is slated for a hotel.

“There’s a lot of quirkiness to the building,” Liu said. “It’s something that’s both extremely familiar but also extremely alien to most people in Houston, because most never realized how much stuff was behind the curtain.”

One example of that: multiple nuclear fallout shelters in the property.

Developers have reimagined postal buildings into new uses for years. Completed projects include a prominent building that dates to 1884 in downtown St. Louis and the Old Post Office in Washington, which President Donald Trump’s real estate company leased in 2013 from the General Services Administration and converted into a hotel.

The Postal Service owned 8,448 properties as of September, according to its 2017 annual report, down about 2 percent from 2011. The post office leases the vast majority of its facilities, a total of 23,184 properties, the annual report said.

Over its last seven fiscal years, the agency has sold an average 32 properties annually, according to its financial statements and reports. Sales can be contentious. In some cases, communities have fought to ensure buildings remain in public hands and open to serve customers. The agency has also faced criticism for selling buildings with historic elements.

“Places that have a sense of neighborhood usually don’t like it,” said Steve Hutkins, a New York University professor who operates a website, Save the Post Office, that tracks building dispositions and other agency news.

The Postal Service consolidates and sells property to adapt to business and financial circumstances, including falling mail volume, Kimberly Frum, a spokeswoman for the agency, said in an email.

“In some locations, we have excess capacity,” Frum wrote. “Given our financial condition, selling property in these circumstances is a sound business decision.”

Before any sale, the agency always solicits and considers community input, she added. It also must comply with preservation laws and rules before it can sell historic properties.

Not every postal facility has a second life. The service’s distribution center near downtown Portland, Oregon, is slated for demolition under plans by a local economic development agency, Prosper Portland.

The organization bought the property in 2016, eager to take control of a site that connects several neighborhoods in and near downtown, said Sarah Harpole, a project manager at Prosper Portland.

The building on the site — a 400,000-square-foot structure built in 1962 — is unable to accommodate local priorities, she said, like developing new housing to meet expected population growth in Portland and creating affordable units in a central location.

“We’re looking a high-density development that necessitates that demolition of the building,” Harpole said. “It has limited functionality.”

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