When I first moved to the Portland Metro in 1996, I found an apartment in Beaverton, a nearby suburb. After a year, I made some friends and moved to the trendy Northwest area of Portland with a roommate. We got a 2 bedroom apartment in a great old building call the Envoy. The Envoy was built in the 1920s and is listed on the National Register of Historic Places. I loved living in this area. There are a bunch of little shops, restaurants, and bars nearby. This part of town is always lively and there are a lot of fun things to do. The Envoy is also right next to Washington park and I could go for a hike whenever I need to get away. We paid $850/month for the two bedroom apartment and it was a great deal.
During the real estate boom, apartment conversions were quite common and the Envoy was one of them. I went by to take a look at my old apartment because I would love to live there again, but I think the price was around $500,000. That’s a bit too expensive for a 2 bedroom condo. The price came down a little bit over the last few years, but the awesome penthouse is still very expensive at $3,475,000. The top floor used to have two apartments, but the buyer joined them together to create one big penthouse. If I ever win the lotto, I’ll pick this place up for sure. This is my Portland dream home. For those of you who live in the Northwest, this was Fred Meyer’s old home a long time ago.
I think apartment conversion is a great idea. Here are just a few things that I like about it.
- A historical building can be saved by a conversion instead of being torn down.
- It’s more environmental friendly because the building can be recycled for another purpose. Quite a few downtown warehouses were converted to condos in Portland over the last 15 years.
- The price is usually lower than a comparable condo in a brand new building.
- The city sometime gives incentive to the buyers in the form of property tax freeze (to the pre-conversion property value.) This will encourage the buyers to move into a newly repurposed area. The tax freezes I’ve seen usually expire in 10 or 15 years.
However, there are some negatives as well.
- Old buildings usually have outdated floor plans. In the old days, people don’t want to see the kitchen so it is usually hidden away. Now, we like to cook and still interact with the family. The old bedrooms are usually bigger than bedrooms in new constructions, and aren’t the most efficient use of space. The bathrooms in old buildings are usually more cramped too.
- Outdated building material such as lead paint can be a concern. I’m not optimistic about how the Envoy would do in a big earthquake either.
- A converted building may have older plumbing, elevator, or other longer life structures. You will need to talk to the HOA and read all the fine print to be sure there won’t be any surprises.
- A building conversion can take a long time and the market condition could change by the time a building is finished. The builder would have used an estimator to figure out their cost and set the for sale price accordingly. However, the big real estate market downturn caused a panic and many condos in many buildings remained unsold for a long time or reverted to apartments.
All in all, I’m a big fan of the process and if the price is right, I would consider it. What about you?