Areas become gentrified and also change their purposes as the economy fluctuates or opportunities open up and investors want to take advantage of a growing area. For instance, when the doc com boom was in full swing in the Bay Area, all of a sudden there where huge lofts and luxury apartments going up, there was a lot of new money be thrown around and real estate investors were trying to get a piece of the action. Luxury lofts want up in parts of San Francisco that were once down and out, and condo conversions were on the rise.
Other Examples of Property Use Change
Industrial parks are replaced and or become offices for the new technology companies. High ceilings become the new style loft, and buildings are picked off that have those attributes. The newly minted Silicon Valley started ups make them their new incubators--their new homes. The key is buying the property at the price when it’s was deemed industrial rather than office space or suited for a loft. Changing the use of a property can drastically increase the value of the property but timely is key--getting in early.
industrial buildings to offices
warehouses to lofts
residantial properties to commerical
apartments to residential hotels
apartments to condos
Check with your state and local building departments to see what the rules are as far as changing the use of a property. Whether it's going from residential to commercial or to a condo conversion.
Tear it Down
I’m sure you’ve seen those shots of entire buildings being torn down or blown up. That’s because the investors have determined that the property will make more money if they demolish it and turn it into a brand new hotel or office space—one that’s inline with what the current real estate trends are demanding.
You don’t keep running a hotel if surrounding you are apartments and condos and the tourists have all started staying in a new part of the city. It just makes more sense to turn the hotel into a residence building with perhaps office space on the first floor. Alternatively, it could just cost more money to remodel a hotel in Las Vegas than just blow it up and start over.
This is the implosion of the famed Stardust Hotel and Casino, which is being cleared to make way for a new resort complex known as the "echelon," which will open in 2010.
