The 10-story Citizens Bank building and the Pearson’s Jewelers building on Elm Street in Manchester have brought more than 250 residents downtown after being converted to apartments in recent years. The Millyard has also become a hot spot for people to live.
While the redevelopment of office buildings into residential units is an ongoing trend in urban centers, the COVID-19 pandemic could accelerate the transition with the rise of remote working.
Ben Gamache, a Manchester commercial real estate investor, wants to turn vacant office space above Gauchos Churrascaria Brazilian Steakhouse at 62 Lowell St. into nine apartments and bring another 12 apartments to a vacant 14,000-square-foot office building at 540 Chestnut St. The two projects would bring a total of 21 new residential units downtown.
“With the pandemic and the downsizing of office spaces there are a lot of (commercial) vacancies,” Gamache said. “There is not as much of a need for office space.”
The New Hampshire office market remains “unsettled” as the state moves away from pandemic-related shutdowns, according to a recent report released by Colliers International.
“In 2021, some companies will undoubtedly downsize or close NH locations, while others may expand to follow social distancing guidelines,” the report reads. “As more companies make office decisions, we believe this will lead to lower occupancy rates in the market.”
Some adaptive reuse projects were in the works before the pandemic, such as the redevelopment of the former Lemay Jewelers and the Raxx Billiards on Elm Street to include 33 apartments, among other uses.
Last year, the owner of the Bedford Block at 1331 Elm St. opened 52 furnished studio lofts that can be rented with either short- or long-term leases.
The downtown needs more units to maximize an affordable housing stock, said Dick Anagnost, a Manchester developer.
“We have a really walkable downtown that if we could convert a bunch of the buildings into residential it only helps,” he said.
Anagnost expects increased opportunities for more apartments once the office market settles, especially with more options for remote work and businesses offering rotating schedules.
Gamache agrees more buildings will likely be converted to housing.
“It’s a combination of too much office space and not enough apartments,” he said.
He hopes to start the work on Chestnut and Lowell streets shortly after getting planning board approval. The board heard the plans on Thursday night.
“We are going to start right away,” Gamache said. “The buildings are empty.”
The Lowell Street project is estimated to cost $450,000, according to the project application. A similar figure was not provided for the Chestnut Street project.
Elm Grove Companies sees converting underutilized commercial properties as an opportunity for multi-family housing, said Chris Schleyer, a principal and head of property management.
The company took on the Pearson’s Place project and recently opened The Lofts at Star Theater and renovated the 1911 Kearsrage Building into apartments in Concord.
“One of our goals was to get more people living on Elm Street in Manchester,” Schleyer said of the Pearson’s project. “Hopefully that leads to more retail on Elm Street and to make Elm Street more of a destination, which I think it is turning into.”
While many have speculated that people might want to live in less-crowded spaces because of the pandemic, Gamache thinks there will be a demand for downtown units with easy access to entertainment and places to dine.
“There are a lot of schools, a lot of college kids there,” Gamache said.
Besides Pearson’s Place, Elm Grove converted the former Farnum Center building at Union and Hanover streets into 32 micro-apartments.
The demand for smaller units is still there during the pandemic, Schleyer said.
“We found that the mini-flat or luxury studio model is really appealing to a broad spectrum of renters,” he said.
Gamache’s Chestnut and Lowell street projects will include two bedrooms. Each unit will be between 800 and 1,000 square feet and be priced between $1,200 and $1,400 a month.
The second bedroom can be used as an office for those working from home more often during the pandemic.
“I think people want to live downtown. It’s fun to be downtown,” Gamache said. “I think it is going to be an attractive living style, and I think there is a need.”