Unique Opportunities for Adapting Mid-Century Office Buildings as Hotels

By John Tess President & CEO, Heritage Consulting | November 26, 2017

While breaking new ground for a new hotel is often always first in consideration, central downtown development can offer the added advantage of location. Ground up downtown development can be difficult to achieve due to limited vacant lots along with high property costs. One option that often makes a central city locale feasible is to rehabilitate an existing building.

When considering the adaptation of an existing building into a new hotel, mid-century Class B or C office towers, in particular, are prime for redevelopment into hotels, with premier locations, unique architectural features, and relatively low price tags. Additionally, office towers built in the 1950s and 1960s are now over fifty years old and may be eligible for historic tax credits (HTCs) which can help provide additional equity to the capital stack.

Opportunities for rehabilitating mid-century buildings are abundant and many are undervalued as the buildings are often in need of significant upgrades. When it comes to reusing mid-century office buildings for hotels, these resources typically contain larger windows and flexible floor plans, two important features older historic buildings usually do not offer.

With every passing year, the benchmark for which buildings are considered historic (typically 50 years old), correspondingly moves. As a result, more and more mid-century office buildings are historic and eligible to utilize HTCs to assist in financing hotel conversions. HTCs, including the 20% federal credit, as well as companion state credits available in most states, provide an incentive to rehabilitate historic buildings and are a major driver for the adaptive reuse of buildings throughout the country. In order to qualify for the HTCs, a building must be designated historic, and the proposed rehabilitation, including all exterior and interior work, must meet the Secretary of the Interior’s Standards for Rehabilitation.

To better demonstrate the potential for adapting mid-century office buildings into hotels, several examples of recently completed rehabilitations are featured in this article. These examples illustrate creative solutions which capitalized on the unique features inherent in mid-century architecture, resulting in unique and modern hotel public and amenity spaces.

These projects successfully maintained the historic character of the building while providing a vibrant and modern aesthetic. Each of the adaptive reuse projects discussed below utilized federal and/or state HTCs.

Aerial view of the Langham Chicago situated at the far right
The Langham Chicago lobby
The Langham Chicago building entrance
Aloft New Orleans Downtown
Aloft New Orleans lobby
Aloft New Orleans aerial view
Aloft Orlando Downtown
Aloft Orlando main entrance
Aloft Orlando lobby

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Coming up in February 2018...

Social Media: Engagement is Key

There are currently 2.3 billion active users of social media networks and savvy hotel operators have incorporated social media into their marketing mix. There are a few Goliath channels on which one must have a presence (Facebook & Twitter) but there are also several newer upstart channels (Instagram, Snapchat &WeChat, for example) that merit consideration. With its 1.86 billion users, Facebook is a dominant platform where operators can drive brand awareness, facilitate bookings, offer incentives and collect sought-after reviews. Twitter's 284 million users generate 500 million tweets per day, and operators can use its platform for lead generation, building loyalty, and guest interaction. Instagram was originally a small photo-sharing site but it has blown up into a massive photo and video channel. The site can be used to post photos of the hotel property, as well as creating Instagram Stories - personal videos that disappear from the channel after 24 hours. In this regard, Instagram and Snapchat are now in direct competition. WeChat is a Chinese company whose aim is to be the App for Everything - instant messaging, social media, shopping and payment services - all in a single platform. In addition to these channels, blogging continues to be a popular method to establish leadership, enhance reputations, and engage with customers in a direct and personal way. The key to effective use of all social media is to find out where your customers are and then, to the fullest extent possible, engage with them on a personal level. This engagement is what creates a personal connection and sustains brand loyalty. The February Hotel Business Review will explore these issues and examine how some hotels are successfully integrating social media into their operations.