For nearly a century, the Wonder Bread Factory in Washington, D.C. was — well, exactly that. Bakers made bread and pastries in the high-ceilinged brick building, situated just a mile and a half from the White House. But, as has happened with countless U.S. industrial centers, Wonder Bread took their manufacturing operation elsewhere in the mid-1980s, and the factory went silent. The building stood vacant for almost 20 years.
Sensing opportunity, developers acquired the building in the late-1990s. By 2013, the long- vacant factory had been converted into a loft-style coworking and office space, now home to tech startups, catering firms and more. Its design preserves elements of the original factory — brick facade, chromium piping, Wonder Bread and Hostess signs — while also making room for sleek, modern features. It’s a combination of old and new: the industrial America of the past housing the informational America of the future.
The Wonder Bread Factory conversion is an example of adaptive reuse, an increasingly common phenomenon in America’s urban centers. In essence, vacant buildings constructed for one purpose are acquired and adapted to a new purpose. Factories become office spaces, warehouses become apartment complexes, churches become hotels. Less expensive and more stylish than from-the-ground-up construction projects, adaptive reuse presents significant upside for entrepreneurs and investors alike.
Moreover, city fathers like adaptive reuse. Once a building is abandoned, maintenance responsibility falls on the local government. This uphill battle takes a toll on cities’ budgets and uses up valuable manpower. So, federal and local incentives have been introduced to facilitate adaptive reuse projects. This eases the burden on the local government, provides an entrepreneurial opportunity for developers, and adds value to the neighborhood in which the property is situated. It’s a win-win-win.
Need for Speed
Once a property is abandoned, “successful early intervention is the best course of action,” according to an article on the United States Department of Housing and Urban Development (HUD)’s website. In other words, it’s best to act fast, while the building’s bones are still good. For many, this can be tricky; buildings need to undergo extensive inspection, grants and tax incentives must be explored and/or applied for, and all plans must be checked against municipal regulations. A lot has to happen, and it takes experience to execute with urgency and accuracy. Furthermore, due to the large amount of “moving pieces” and execution complexity, finding an experienced debt provider that will confidently move swiftly to provide needed capital can be one of the project’s greatest challenges.
That’s where Bloomfield Capital comes in. We have deep expertise in complex commercial bridge loans, the standard for adaptive reuse projects. As a direct lender with discretionary capital and a focused team, we speak directly to our clients as an engaged capital partner. Our success does not depend on outside decision-makers, or selling off our debt to other investors; our success depends on our borrowers’ success.
We are a nimble operation, with clear, open channels to the highest-level decision-makers. If you call our office, you will talk to a key team member who is experienced, intelligent, and influential. We review and respond to applications quickly — often in the same day — and we take our due diligence seriously. If a borrower wants to fund a warehouse repositioning deal anywhere in America, an investment professional will be on site as soon as the next day to walk the property with the borrower. We are a nationwide lender, with hundreds of deals closed, from New York to Florida to California.
Absent bureaucratic obstacles, Bloomfield Capital can act with maximum efficiency, selectivity, and speed. Our team is made up of seasoned professionals whose decades of experience mean they can distinguish a strong value proposition from a weak one. We know how to recognize clear visions and pragmatic business plans, and invest in them with confidence. We are not learning on the job, and have likely invested in a complex project like yours in the past. From difficult municipal issues, complex construction and development challenges, partnership obstacles, and esoteric structuring problems, we are a special situation lender that excels at the intersection of complexity, speed, and the need for capital. We’re taking what we’ve accumulated over many, many years and applying it to adaptive reuse projects nationwide.
We can foresee the issues that arise when bringing a centuries-old warehouse up to code. We can share valuable insights from prior complex projects when you are transforming a defunct factory into a 40-unit apartment complex. We know how to leverage the new federal Qualified Opportunity Zones (QOZs) program. We expose brokers to crucial knowledge that they can apply in future transactions. Above all, perhaps, we communicate effectively, and close with confidence. Partnerships of all kinds depend on everyone being on the same page, so we prioritize transparency at every level.
Roll with the Tide
U.S. cities have long been evolving from manufacturing hubs to idea centers. Fast, savvy real estate conversions help shepherd this evolution. A 2019 Nareit (NAR) quarterly market survey of more than 600 commercial realtors characterized adaptive reuse as a leading commercial opportunity. Bloomfield’s direct investment in borrowers’ success, deeply relevant expertise, and accelerated, transparent decision-making help everyone take advantage of this fertile commercial climate.
Contact Brent Truscott at btruscott@bloomfieldcapital.com about your adaptive reuse project.
