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The old Utah office tower will be converted to apartments. Will this become a trend?

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Well-known 24-story building will have 255 high-end rentals.

(Rick Egan | The Salt Lake Tribune) This office tower in Salt Lake City’s South Temple, shown Thursday, June 30, 2022, will be transformed into 255 luxury apartments.

As the residential construction boom continues in downtown Salt Lake City, developers have purchased a high-profile office tower along South Temple with plans to convert it into luxury apartments.

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Hines, a Houston-based global real estate company, said work on the 24-story white office building known to longtime residents as University Club Tower, at 136 E. South Temple, would begin in early 2023 and transform it into a high level 255. end studios and one and two bedroom homes.

Crews will strip the rectangular office building “down to its core,” Hines said, and repurpose it “for high-quality residential living at a time when the Salt Lake City market is starved for much-needed housing.”

The private firm said its recent purchase of the 216,976-square-foot high-rise building, for an undisclosed price, came after extensive analysis showed it met daylight and pedestrian accessibility requirements, and that the shape and the general plan of the building led to the creation of so many apartments.

Taking an adaptive reuse approach rather than new construction, the firm said, will reduce carbon emissions by limiting the use of new building materials, particularly concrete, an industry staple that also produces large amounts of carbon dioxide. . Upgrading the building’s mechanical systems, Hines added, is also expected to reduce emissions over its life cycle.

Downtown real estate is changing focus

(Rick Egan | The Salt Lake Tribune) This office tower in Salt Lake City’s South Temple, shown Thursday, June 30, 2022, will be transformed into 255 luxury apartments.

The announcement comes as several downtown office towers have opened or are under construction, even as office spaces across the country are experiencing some of their highest vacancy rates in three decades, depressed by effects of the pandemic and work from home trends.

At the same time, demand for homes — for rent or purchase, at all price levels — has reached new peaks, though there are signs it may start to slow as interest rates rise.

Meanwhile, Salt Lake City’s trend toward luxury housing has fueled frustration among those who point to the region’s dire need for more affordable housing as home prices and rents continue to rise.

Referring to the city’s “tremendous growth” over the past decade and the housing shortage, Dusty Harris, senior general manager of Hines, said the company “is stepping in to fill a need among city residents.”

“We’re finding a creative solution to a building that’s not being well used by converting it to a use that the community needs,” Harris said in an interview. “We’re excited about that, and we think there’s probably a lot more to come. A lot of people in the real estate industry are thinking about this.”

And while it won’t directly produce moderately priced housing, he said,our opinion is that the city needs housing of all kinds and this is certainly helping to meet the demand for more housing in the community. And the simple act of increasing the housing stock should ultimately help make the market more affordable.”

The South Temple Tower will be a residential location of choice, Harris said, for its proximity to downtown amenities, landmarks and public transportation, as well as its views of the Salt Lake Valley.

Located just east of the Alta Club near the intersection of State Street and South Temple, Hines’ latest Utah acquisition was renamed the South Temple Tower in 2015 after a $10 million overhaul by a previous owner, Maier. Siebel Baber, based in San Francisco.

That renovation restored some of the tower’s original historic character, enhanced its exterior, created a two-story lobby and entrance plaza on South Temple, and improved views from some of its upper floors.

County property records show the building, built in 1965, and its 0.61-acre lot were valued at $55.7 million last year.

Increase in luxury and high-rise housing

(Image courtesy of Hines, via Salt Lake City) A rendering of the 31-story apartment tower and adjacent park that will be built where the Utah Theater once stood on Salt Lake City’s main street.

Hines is also finalizing designs for a 31-story luxury residential tower called 150 South Main Street Apartments, located on the site of the now-demolished Utah Theater on Main Street, with 400 apartments, 40 of them rent-subsidized.

The two residential towers proposed by the international developer join several similar projects launched in recent years amid a boom in apartment construction and what is projected to be a growing demand for high-rise luxury homes in Utah’s capital , especially among higher-paid workers who move to the inner city.

The 21-story Liberty Sky, at 151 S. State, opened this year. Built by Utah-based Cowboy Partners with 272 luxury units, it marks the city’s first rental project above the 200-foot mark.

On what will soon be Salt Lake City’s tallest skyscraper, crews at Boston-based Kensington Investment broke ground in January on Astra Tower, at 200 S. State St. That will stand 450 feet tall and 40 stories when completed in the fall of 2024, with approximately 372 luxury apartments.

(Rendering courtesy of Kensington Investment Co., through Jacobsen Construction) Rendering of the future Salt Lake City skyline with the addition of Astra Tower, which will become the tallest skyscraper in Utah.

A recent study identified a record 3,974 new apartments under construction downtown and projected that their rents would likely be at least 30% higher than anywhere else in Salt Lake County.

The researchers also pegged prevailing apartment vacancy rates in Salt Lake County at a record 2% or less, pushing median rents up 10.1% in 2021 alone.

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