Luxury senior housing proposed for nearly empty Rye office building

A nearly empty office building on Old Post Road in Rye could be knocked down and replaced with luxury housing for active seniors, a move that fits with a trend in Westchester County of finding new uses for outdated office properties.

The 75,000-square-foot building at 120 Old Post Road is owned by Alfred Weissman Real Estate LLC. The owner has proposed to develop a 222,000-square-foot, 135-unit luxury apartment building restricted to residents 55 and older on the 7-acre property.

An analysis of the Rye office market, one of three reports by Goman+York Property Advisors LLC included in Weissman”™s proposal, noted that the 120 Old Post Road building was configured primarily as an open-plan headquarters building, making it difficult to fill as newer leasing has focused on smaller spaces. The only tenant at 120 Old Post Road is its owner, which has its headquarters there.

It”™s not an unusual predicament, as older office buildings on Westchester”™s Interstate 287 corridor in Harrison and White Plains, known as the Platinum Mile, have also struggled to attract tenants and some have been converted to new uses, such as fitness centers and luxury apartments. In Rye, the vacancy rate for office buildings is hovering around 20 percent, according to a March 2015 report by Goman+York, which attributed the slow rate in leasing activity in part to a trend of companies using less square footage per worker.

Beyond finding use for the building, Jonathan Kraut, an attorney representing Alfred Weissman Real Estate, said the senior housing fills a need in the city.

“Active adult housing is an aspect of the market in Rye that doesn”™t presently exist,” said Kraut, a partner at Harfenist Kraut & Perlstein LLP in Purchase. “So this can fill a niche in the marketplace.”

This is not the first time the building”™s owner has sought a new use for the three-story office building. In 2012, the company wanted to build a hotel on the property, but that plan was withdrawn after it met with backlash in Rye.

Built in the 1960s, the property was bought by the Weissman firm for $1.4 million in 1997. It once served as headquarters for Mobius Management Systems Inc. The records management company in 2007 was purchased by Florida-based Allen Systems Group Inc., which closed the Rye office.

Kraut declined to disclose the cost of the senior apartment development. The luxury complex will offer concierge services, a fitness center and swimming pool, among other amenities. The attorney said the developer has not yet decided whether a third party will operate the facility.

The company is also not yet disclosing potential rent for the planned rental units. However, one report from the realty company”™s property adviser estimates the project could “reasonably expect” to charge rents between $2,800 and $3,200 a month for a one-bedroom unit. If offered for sale, the same one-bedroom residence could be priced between $425,000 and $475,000.

A November 2014 office market report from Goman+York highlights the difficult climate that office building owners face in Westchester. The company found vacancy rates to be at an all-time high as of the report”™s release and noted that companies such as Regeneron Pharmaceuticals and Westmed Medical Group chose to construct office space of their own, “likely the result of obsolete office stock.”

The vacancy rates in the county”™s older office stock have forced some municipalities to rethink and revise their master plans and zoning restrictions. The Harrison Town Board last month approved a 421-unit luxury apartment building on Corporate Park Drive office-park property owned by Normandy Real Estate Partners. Two vacant or nearly vacant office buildings at 103 and 105 Corporate Park Drive will be demolished to make way for the project, the first apartments to be built in the Platinum Mile corridor.

The Rye City Council approved a necessary zoning change and site plan for the Rye senior apartments development last December. The project still needs approvals from the Rye Planning Commission and the city Board of Architectural Review.

If approved, Kraut said construction would be completed in about 18 months.