It’s no longer just a formerly fly hip-hop phrase. Now, owners of industrial properties are raising the roofs of their once-obsolete, low-ceilinged warehouses and gaining new tenants as a result.
What was once considered an almost exotic move, one that carries significant costs, is increasingly becoming a step that industrial landlords are considering as a way to creatively adapt out-of-date properties into sought-after homes for today’s tenants.
The measure certainly isn’t for the faint of heart. A company that specializes in roof raising will arrive with large hydraulic machines that end up welded to the columns holding up the roof. The columns are cut and the entire roof is lifted to the desired height with the load on the columns transferred to the lifting mechanisms. Then, workers will splice in or replace the columns in the same locations and remove the machines. And voila, your 16-foot, functionally obsolete building is now ready for use as a modern distribution center or other use.
But it’s not cheap, and the smaller the roof, the less likely it is that the numbers will support raising the roof. Marty Shiff, president of Rooflifters, a firm based in Toronto, Canada, that specializes in these projects, said a roof raising in a building with just 10,000 square feet of roof would likely cost $30 a square foot. But that old 100,000-square-foot manufacturing facility that you’ve been just waiting to lease and could if you had higher ceilings? That roof will cost just $15 a foot to raise.
Shoring Up Options
Rob Cronin, a vice president in Lincoln Property Co.’s Boston office, said he would certainly consider raising the roof on some of the 200,000 square feet of industrial properties he is marketing in the 128 North and I-93 North markets.
One building in particular, 31 Olympia Ave. in Woburn, has 16-foot ceilings but is still a solid industrial space – except the roof is too low for today’s users, keeping it from being a Class A industrial property, Cronin said. The owners bought the property in 2006 hoping to redevelop it into a retail property. But the market fell apart and now the owners are trying to think of ways to adapt the building. Cronin thinks raising the roof would solve the problem.
“It gives the building a rebirth if you can afford to do it,” Cronin opined. “But you need a real strong lease rate to support that kind of project.”
And most places in the market aren’t achieving the rents to justify such an expensive undertaking. Right now, industrial is renting for $4 and $5 a square foot on average, Cronin said, with some spaces reaching near $7.
When it comes to raising the roof, he said, “We need the rates and the demand … before you can afford to do that.”
But according to brokers, leasing activity in the northern industrial markets has picked up significantly in the last six to 12 months, and that could provide the kind of encouragement more landlords need to go spec with roof lifting.
Greg Klemmer, an industrial broker with NAI Hunneman in Boston, said the firm is tracking about 500,000 square feet of requirements in the northern industrial markets, and added there is probably twice that number floating around the market for space.
Sounds Of Silence
But raising the roof isn’t the only solution landlords can look to when trying to creatively reuse an old warehouse.
Needham’s Equity Industrial Partners purchased 9 Northeastern Blvd. in Salem, N.H., a 670,000-square-foot, vacant manufacturing property, in 2010. Within 18 months, the property was 85 percent leased and tenants are continuing to absorb space, said Thomas Farrelly, executive director for Cushman & Wakefield.
One firm, a call center, wanted to use the space but didn’t know how it could work with so much echoing ceiling height above. So, the landlord installed sound-deafening materials, known as cloud ceilings, to deaden any sounds.
