Eric Rahe, a partner with Philadelphia-based BLT Architects, says using an existing building is about the only way to get a new hotel opened in an urban city. The high cost of land in major metropolitan locations made it nearly impossible for new construction pre-recession, but the ongoing credit crunch has further diminished the possibility of financing for new-build projects, making adaptive reuse the most viable route to urban development.

Rahe and his architectural and interior design firm have specialized in both the hospitality industry and adaptive reuse. BLT Architects is celebrating its 50^th anniversary next year and Rahe recently took some time to discuss the best approach to urban adaptive reuse, including his work on the award-winning Loews Philadelphia.

Do developers bring architects buildings to look at or do you find buildings that would make good hotels and seek out interested developers?
The answer is both. It's most common for developers to come to us with various buildings to look at. Usually with an inexpensive and quick plan we can look at how many keys can fit into a building. We lay out a set of relatively conceptual floor plans and usually developers work with a contracting partner to put a cost element to that. Then we put that into a pro forma and the developer makes a decision.

What are the initial things you look at when considering an urban adaptive reuse project?
Location matters first, but the next thing is what type of hotel are you planning? If limited service, there are some great examples, where because you’re working with guestrooms primarily, many different buildings and configurations work. It’s more problematic if you’re interested in a hotel that needs meeting space. It’s tougher because you need uninterrupted volumes of space and that’s harder to accommodate.

Tell me about the Loews Philadelphia your firm worked on.
It’s a landmark building in Philadelphia that for years was known as the PSFS Building. It was actually the first international style high-rise built in the 1930s. It was designed as the office building for Philadelphia Savings Funds Society. That was an interesting case in that the partners at this firm were familiar with the building and looked at it before the developer came in. We looked at and studied it and got a local developer interested who met with the hotel people.

What are some of the initial elements you look at when considering a building like that?
The overall condition of the building, the skin or envelope. Are the walls in good shape? The other big issue is fire code. You have to get a handle on the basics like exit stairs, the fire rating of the floors and walls. Acoustics are another big issue. Sometimes with older buildings you might have wood to cinder to different types of concrete that don’t have acoustical ratings equal to current new construction so you have to come up with additive measures. It’s easy to be seduced by beautiful public spaces, grand marble lobbies, but you just really have to think about contemporary meeting spaces. It’s great to have those wonderful spaces to meet in, but think about how meetings are conducted with audio-visual systems, and sometimes that become the real challenges.

This sounds like adaptive reuse can get pretty costly?
Obviously there is a premium to do this. Frequently the initial cost of the building and often there are subsidies like historical tax credits, and those things offset the premium to make it work.

Any other initial things to consider when looking at an older urban building for conversion?
Parking. Very few older buildings have adequate parking. At the Loews, we were able to convert the basement levels to onsite parking. Other projects haven’t had easily constructed parking and you have to rely on nearby land or buildings. Urban hotels don’t have the same requirement for cars, but the reality is some portion of guests will come by car and frequently our clients have had to look beyond the building’s walls for that.

What about environmental concerns?
You’ve got to get your arms around that early. Many of these buildings are built at a time when the materials might now be unsafe. That can represent a significant premium, and as a general rule, owners need to engage an environmental testing agency, at least to do a visual exam of the property. Sometimes you can’t see asbestos though; it can be hidden around pipes in walls, so some limited exploratory demolition is needed. Setting aside cost, if that is discovered during construction, it can clear a site.

Are office buildings the best for hotel conversions?
Certainly older apartment buildings are most ideal. Frequently they are already designed with the floor-to-floor distance you need, they’re sized for residential use and usually have adequate elevators. But with the trend of more people living in cities, we see a lot of office buildings—typically Class B office buildings—being converted and they don’t have as big a floor plate. Offices represent two-thirds of the buildings we look at, maybe more.

What else can work?
Occasionally we see a specialty building, like a public building being abandoned or maybe a school, although they’re typically not in ideal (commercial) neighborhoods for hotels. We looked at a court building—it was a beautiful space, great for the lobby and meeting space, but no place for guestrooms. We proposed an additional floor on top of the building, but there were concerns over site lines and some other constraints. Frequently the best thing to look for is land nearby for a new tower or addition with the contemporary sizes and needs for guestrooms and use the specialty exiting building for the retail public space.

Do these projects have potential for LEED certification?
Clearly there’s a trend for environmentally conscious design and a number of these are LEED certified. One of the great things about adaptive reuse is you can get a lot of LEED points in urban locations. There are energy and lighting concerns, but there’s a number of points you can get for being close to mass transit, reusing walls and ceilings and those shouldn’t be taken lightly. Those can be great advantages.