A conversation between Gordon Lamphere, J.D. of Van Vlissingen and Co. and Eugene Flotteron, Principal and Director of Architecture at CetraRuddy, who led the design of 25 Water Street, the largest office-to-residential conversion ever completed. Transcript edited for clarity.
Eugene Flotteron: You’re not renting a four-hundred-square-foot studio apartment, or even a five-hundred-square-foot studio home office. You’re renting into a hundred-thousand-square-foot space, because the amenity package is so robust. We’re back to the amenity wars.
Gordon Lamphere: I’m Gordon Lamphere, and welcome to the Real Finds Podcast, where we have real conversations with key entrepreneurs, activists, and researchers shaping the real estate industry and, as a result, our world. On today’s podcast we’ll be speaking with Eugene Flotteron, Principal and Director of Architecture at CetraRuddy, where over the past twenty-four years he’s become one of the industry’s leaders in adaptive reuse and office-to-residential conversion. Eugene led the design of 25 Water Street, the largest office-to-residential conversion ever completed, transforming 1.1 million square feet into 1,320 apartments. On the podcast, we take a deep dive into distressed office buildings being reimagined into housing, the role of local tax programs in unlocking affordability, and why the future of cities depends on creatively reusing what we’ve already built. If you’re interested in office conversion projects, today’s episode is a must listen. Eugene, thank you very much for hopping on today.
Eugene Flotteron: Thank you for having me.
Gordon Lamphere: So what got you into the world of real estate and adaptive reuse?
Eugene Flotteron: I’m an architect by training, and historically about half of our firm’s practice has been adaptive reuse and half new buildings. The reuse projects are really the more interesting ones to me, because they have so many more challenges, but also so much more opportunity to do something a little more unique. New buildings end up having certain standards and can get a little cookie-cutter. A conversion or adaptive reuse project is always a one-time, unique building experience. There are similarities, but there’s always something special about every building that sets them apart, and I enjoy that. Plus, most of our clients are private developers, and I love the private developer clients. They’re very much about time being money; they want to move fast. So it’s being creative, being creative quickly, and convincing them that our expertise creates more value through good design, really good planning, getting the right efficiencies, and being creative with them in an existing building. We have so much experience. I got involved in those projects almost because it was the work the firm was doing, but it’s also work that naturally felt good to me. I love this idea of adaptive reuse, because our cities, which we all live in, need to keep evolving. Everything’s changing constantly, and we need to evolve with it. What once worked doesn’t work anymore, so how do you pivot? The health of the city is all about taking these beautiful old buildings and finding a way to keep them, as opposed to knocking them down and building something brand new. There’s a market for that, obviously, but there’s a market for these beautiful buildings you would never build again today.
Gordon Lamphere: You’ve worked with your firm for a while, and you’ve done some pretty interesting projects. How’d you get started, and what drew you to them originally?
Eugene Flotteron: When we started, they were smaller projects, smaller buildings. We’ve done every version of adaptivity on these projects, converting every building type to every form of residential housing, from luxury condominium to supportive affordable. It started with smaller projects, taking a rental to a supportive program and replanning them, then taking rentals to condo conversions, even more difficult than the big office-to-residential conversions happening today, which are vacant and gut renovations. We did a lot of rental-to-condo conversions around existing apartments, dealing with existing conditions and all these different building types. You do one, it’s successful, you do another, you learn something from the last one, and you start to become an expert in the challenges of working in occupied buildings. These office conversions have some occupancy issues you can plan around because you have experience, with the most sensitive issues being rental issues, people who live there or are rent-stabilized, while you modernize the other rental apartments to a condo finish. It was an evolution from one scale to the next. When you deal with these beautiful buildings, you’re going to deal with historic issues, so we started working with the Landmarks Commission on multiple projects. I think we built a great reputation with them, our sensitivity about preserving the building, bringing back the building, bringing back details through our research. All of that kept moving us forward.
Then it hit a moment a few years ago where we had probably some of the most experience converting this new particular building type, these big large office buildings, because we had done it five or six years ago for one particular client whose business model downtown was offices to rental. So when the market started shifting after COVID, with these office buildings becoming the next big distress class, we had already converted a number of them that were performing well in the market. It was a perfect storm of our experience and history up to this moment, and all the issues these newer buildings brought up, we already had the most specific market experience. That walked us right into the big conversion at 25 Water Street, which is still today the biggest residential conversion of an office building, a 1.1 million square foot building we converted to 1,320 apartments.
That project is actually the first, and we have a lot of firsts, to use the new 467-m tax program, which came out while we were in construction. To that program’s credit, the units, planned to be all market rate, could easily be selected for the twenty-five percent affordability requirements without changing anything about the planning or how we thought of the building. Both that project and another going under construction at the same time, 55 Broad, decided during construction to go for the program. We had to do nothing different about the apartments, and we basically brought a market-rate project into twenty-five percent affordability, which was amazing, because the biggest thing my conversion work had lacked for a long time was this affordable component. You didn’t see a lot of buildings converting for affordable. Years ago there were smaller supportive projects, little rental buildings, but more or less these were upscale rental and upscale condo. We saw a lot of condo work on the smaller pre-war buildings, then this whole post-war rental phenomenon of the last two to three years. But we were already doing it five or six years ago, so we hit that moment with our experience.
Ten years ago, most clients would never even think of 25 Water as an opportunity for conversion. It’s too big, too much area, too much housing, too much that had to be modified. You had to cut large portions of the interior out to make the efficiency work, and rip open large portions of the facade to make light and air work for the new residential use. All that area was then added to the top of the building, so you didn’t just lose it. It’s a very aggressive amount of modification, but the financials worked. They bought it at such a distressed market price, and it was vacant, which is an amazing opportunity, because a path to vacancy is your biggest complexity. If you have one tenant in the middle of the building on a lease for the next ten or fifteen years, it can be difficult. Not impossible, but difficult. So it was empty and cost-effective, and we got into it and started figuring out how to get the efficiency right, because the more apartments we come up with, the more successful it can be.
When we were studying it, I’d take an area out and do a six-story addition, this many units, this much net. Then I did a more aggressive study, cutting more area for more efficiency and more rentable net. The clients came back and said they wanted the less aggressive modification but the same net I’d gotten to. So we got more creative, dug in, looked at those courts, and made them as efficiently laid out as possible. Zoning has some interesting deductions, things you can add that don’t count as floor area, that we were able to find. We ended up with a ten-story addition before we were done. Every week we were talking to a structural engineer: can we do seven, no problem; eight, no problem; nine; and we got to ten. We asked about eleven, and he said we’d have to reinforce all the footings. So, ten it is. Ten became our new limitation, and we sculpted it to use all the available area and get it right.
Gordon Lamphere: CetraRuddy has done some very cool projects, and you mentioned that projects have accelerated over the last five years and that financials have shifted. Do you think the office distress world is creating huge opportunity, or are there still a lot of deals that aren’t distressed enough to pencil?
Eugene Flotteron: The distress market seems to still be rolling in right now. From what I hear at the events I go to, this whole distress market has another three to five years minimally, they think. Two years ago I thought it was even longer than that, but the market corrects quickly. You take half the empty buildings offline and the other half start to fill up. So they’re becoming less and less distressed, which makes the numbers more difficult, but the numbers on the rental side have also been going up, so the deals have penciled back. I saw it tighten a little, then accelerate. The new tax program, the 467-m, is fantastic. I can’t say enough good things about the city coming up with that. They didn’t do such a good job with the 421-a replacement, the 485-x for new buildings, but on the 467-m they hit it where developers said, yes, I’ll use this, it’s worth it.
This program currently has a thirty-five-year abatement, but that thirty-five-year abatement expires in June of this year, June of ’26, and reduces down to thirty. So I have a plethora of clients trying to get their approvals in prior to that expiration, because those five extra years of abatement are worth millions of dollars. That’s giving us a rush at this moment to get in. I saw the same thing when 421-a was expiring for new rental buildings; we got a rush of work, a lot of architects did, to get a foundation in the ground and grandfather those programs. I’ve got one project right now finally breaking ground on a grandfathered 421-a that’s been expired for a number of years. It took a while, but they got those foundations, and those projects financially make sense and move forward. It’s been a huge credit to the city.
New York went a step further in the Adams administration with the City of Yes rezoning initiatives. They did a lot for new building sites, but huge things for the conversion market. There’s a part of New York City zoning, chapter one, where you can convert these buildings, all of the building’s area regardless of its FAR, to residential use, if they were built before ’61 in certain districts and before ’77 downtown. They expanded that to 1990 buildings, so more buildings apply, and made it citywide. The biggest advantage is it lets you use the light and air rules of the multiple dwelling for loft-type buildings, which are much less restrictive on court sizes and yard issues, and that makes these work so much better than if you had to modify them to meet current rules. Someone put it that the City of Yes took a fire and threw gasoline on it when it came to adaptive reuse, making more buildings and more parts of the city available to a newer age of conversion. The market took a huge shift at that moment, and it’s shifting again right now with this abatement expiration. These citywide, statewide initiatives are big influencers on how these markets do, and I think New York is trending the market right now.
We’re seeing it outside of New York in a huge way. Everything we’ve done in New York, our knowledge of converting every building type, post-war, pre-war, buildings from the seventies, eighties, nineties, and buildings from 1890, we’ve dealt with every construction type, its pluses and minuses, and how to modify it carefully to keep costs down and get the efficiencies these projects need to pencil out. We get very special apartments you’d never build day one. Compared to a new-building studio, a converted studio has higher ceilings, a unique layout; it’s not cookie-cutter, it’s an art form.
I started getting calls from around the country, because of our historic work and our conversion experience. We got calls in Texas, Dallas, San Antonio, Houston, in Washington, which is trending popular because they have state tax incentives that help push this further. We’re getting calls in Pittsburgh, all million-square-foot offices, million-five, million-eight, just massive. We’re doing one in Charlotte right now. The difference outside of New York is they don’t have the velocity of the market. In New York, we can’t build enough housing or build it fast enough; as much as we could fit will rent. Our two projects at 25 and 55 beat their projections on dollar-per-square-foot rents and beat their projections on velocity, how quickly they rented and occupied, and those were tremendously aggressive projections to begin with. Outside of New York, absorption is lower, so they end up looking at mixed-use projects with a hotel component. The one we did in Charlotte, the client said he didn’t want more than four hundred apartments. I came up with 410, he said no, I said 400. I came up with 399, he said no, I need 400. Then we did a two-hundred-key hotel, and brought the idea of a great food-and-beverage experience at the top, which he hadn’t even considered. The nearest building, a fifteen-story hotel with a rooftop, was doing five million dollars a year in revenue, and he realized a building thirty stories high with views of the stadium, where you could hear the game playing, could blow those projections away. So we brought that into the program: F&B at the top, residential, and hotel hospitality, plus interesting residential services like room service and cleaning, like a hotel offers.
Everything outside of New York was more mixed use, because they couldn’t handle that many apartments at once, so they needed another component. In New York, the hospitality component is actually more difficult because of our special permit process for new hotels and the labor requirements. But outside the city, as-of-right development is huge. I was in San Francisco for the AIA convention two years ago, and they were talking about how to get into conversions because downtown was struggling. Their biggest problem was they had no real as-of-right approval process; they have to go through special approval to make that change of use, which means everyone starts asking for affordability requirements that aren’t economic, and the timing of those special approvals kills the deal. New York has done everything it can to accelerate approvals. The Department of Buildings implemented a program to get these projects done in six months, and they’ve beaten that on most of my projects, especially with the current rush. I’m amazed how they’re keeping up with the velocity of the work.
Gordon Lamphere: Let’s talk not just about the approval process, but about what the market actually demands in multifamily. It’s great to convert, but if we don’t know what we’re converting to, how do we get there? What do tenants expect in 2026 in terms of light, air, layouts, work-from-home ability, noise control, modern amenities?
Eugene Flotteron: It’s interesting, and a lot of people go back and forth on this. You’re creating very small apartments, because efficiency in unit size is critical. An office building conversion is going to be very deep, so you end up with light and air issues; apartments go fifty or sixty feet deep sometimes. There are rules on how wide they have to be, and if I make an apartment too big, it’ll be too expensive to rent or won’t rent at the right profitability. So we get very efficient in sizing. The biggest driver, and New York City has really clear rules on it, is that in a converted building we can create a home office space, up to fifty percent of the apartment as home office. Since it’s work-from-home, home offices are literally needed, and there’s no policing how people live in them. What you’re really creating are studios with a home office that go from thirty feet deep to fifty feet deep. You get an apartment with a living space, an eating area, a bathroom, and another room. That other room competes in the market with a one-bedroom. A one-bedroom in New York usually sizes about 650 square feet, maybe as big as 700. We’re trying to get studio home offices at about 550 square feet, under 600, and it rents for five hundred to six hundred dollars cheaper a month than the one-bedroom comp. Our room doesn’t have a window, but it’s cheaper, and the young professional coming into New York says, I’ll take that all day long, a room in the back I can use for a home office or however I live. It’s cheaper than the market, and that’s the magic of getting the units.
Some will argue you’re creating all these smaller units, but they’re not microunits, which New York has been kicking around. They’re all code-compliant, just small. But I look at it as you’re not renting a four-hundred-square-foot studio, you’re renting into a hundred-thousand-square-foot space, because the amenity package is so robust. We’re back to the amenity wars: who has the most amenities, which are sexier, better and better. You may have an efficiently sized home that works for a young professional or someone retiring who wants a building with a robust amenity package you’d almost never build to that scale. 25 Water has a hundred thousand square feet of amenities. You’re not renting four hundred square feet, you’re renting access to a hundred thousand square feet of in-your-home amenities. That building had two existing sixty-thousand-square-foot cellar levels next to the water’s edge, which you’d never build because of water and dewatering issues, but we had 120,000 square feet of space there. One level was office amenity space, the other had bricks stored for building restoration. We emptied it and used it all: pickleball courts, an indoor pool, an outdoor pool on the roof, a game room with a bowling alley and classic arcade games, a whole wellness program around the pool with treatment rooms and infrared saunas. Anything you could think of, because we had this found space we could never build new. Building that new would be so expensive.
These projects have efficiently sized apartments that rent cheaper, but with access to this public space we find in all this found area a new building would never get. I don’t know how many buildings do thirteen hundred apartments and build a hundred thousand square feet of amenities new. That set the market: we had a half-court basketball, two pickleball courts, and everyone asked, how do we get that? The pool is the big thing. I haven’t done one yet that won’t put a pool on top of the building, as small as it could be, because it’s worth that cachet and access. It’s more than nice spaces; it’s a curated amenity experience, a hospitality kind of amenity. At 25 Water they brought in a group called Life Time to help activate the space and create the program, wine tastings in the atrium that connects the amenities, pickleball tournaments to get tenants active. That activation, that almost-hotel component, is becoming what the market wants, and we’re getting more creative than the next.
We’re doing a project now at 80 Pine Street, another hulking, over-a-million-square-foot office conversion with four street fronts. As deep as I went with apartments, I couldn’t use a certain portion of the middle for residential units, and the building had no available cellar level; it had parking and retail down there. So where do we put the amenities? We put them in that center space and did a vertical amenity experience with its own separate elevators, because I had so many elevators for an office building that I don’t need for residential. When you go into the amenity on any floor, you can go to any other part of the amenity without walking out into the residential experience. It culminated at a rooftop pool in a recess we created on the fourteenth floor, a double-height space where we pulled the facade in for an indoor-outdoor pool experience. We had so much space in the middle we started doing little Zoom rooms in the corridor on your floor, so you don’t have to run far from your apartment to make a private call. I’d never put a Zoom room in the corridor of a brand-new residential building; you wouldn’t pay for that. But when you have the space, what else can we do to create value? These amenities generate fees to join and work into the rental situation, so they create income, plus you can rent the party room for a birthday or anniversary. It’s an amenity arms race of who has everything the other one has.
Gordon Lamphere: In our shop, we have all sorts of investors reaching out to ask, does this building play into the conversion playbook? Is it a good building to convert, does it have good bones, and what should we look for? We’ve done a ton of conversions to industrial, and there are other podcasts people can listen to for that. But for the multifamily playbook, what floor plates are you looking at, corridor depths, the thirty-foot daylight rule? What are you looking at when trying to find an ideal building for a multifamily conversion?
Eugene Flotteron: The ideal building isn’t more than sixty or seventy feet wide and has light on three sides, but that’s few and far between. None are really ideal, and the thing is, nothing is impossible to convert. It’s just how much you have to modify it and whether the economics make sense. 25 Water, ten years ago, nobody would have converted; if you said the economics require cutting two courtyards and putting ten stories on top, they’d say forget it. But it works today at whatever price you came in.
I have a checklist when a client calls. The first thing I look at is whether the building is overbuilt, which a lot of these office buildings are. Even with new zoning allowing up to eighteen FAR, New York City zoning historically limited residential to twelve FAR, and only in certain districts with big FARs. City of Yes made that cap eighteen FAR, but I’ve already converted buildings at twenty-one and twenty-four, and I’m doing one that’s thirty FAR. You can never build that much housing brand new. So, is this building overbuilt? If it is, great, you couldn’t knock it down and build it this big, and you’d never get this much housing. That’s a good start.
This overbuilt-equals-opportunity insight is the crux of what makes conversions pencil, and it connects directly to the density and entitlement questions we cover in Why Every Chicagoland CRE Investor Should Know What FIMBY Means.
Next, is it efficient? In most cases it won’t be. My clients try to get to eighty percent efficiency per floor, or they don’t think the economics work. So how do I get to eighty? Sometimes that’s moving the stairs, removing elevators, cutting a full light well through the building, which is the most aggressive cutout. Some buildings I can’t cut a light well through because it’s a stepped building, like 80 Pine, where I’d eventually wipe out the best part of the floor plate. So what else do I have? There, I put an amenity in that space. Those things have to be factored in. My clients these days target about eight percent of their residential net for amenities, pretty high targets, which at 25 Water is a hundred thousand square feet to find.
I look at how many street exposures, how much light, and depth is going to be a problem. A good building is only forty-five feet on either side of the apartments at a hundred-foot-deep building; a brand-new residential building would be sixty or sixty-five ideally. So how many sides do I have light on? Light on one street and a back is a certain analysis; three sides is better; all four sides is probably the best for getting efficiency. You’ve got to dig in, get the pencil and paper out, and find the other goodies. We did the Barbizon Hotel, a tight, efficient hotel-to-residential condo, easy because it wasn’t deep. But where else can you find area? A client said they weren’t touching the elevators and stairs because of cost. I said, let us look. If I put a new scissor stair in and right-size the elevators, what would you get? In one meeting we found them twenty thousand more net sellable square feet just by modifying the core. It was the fastest decision he made on the job: rip out the elevators and stairs and put in a new scissor stair. That also led us to find that the most beautiful window in the building was in the elevator machine room, a beautiful pointed arch window, and we made that into the most fantastic residential unit in the building. These found opportunities are like a treasure chest of hidden gems, whether it’s too much cellar, like at 25 Water where one part of the cellar did a hundred cars of parking, such an amenity in New York you can’t find in a new building. Some buildings I convert don’t even allow parking, which I find crazy; zoning limits the choice. I don’t get the choice of why I can’t allow it.
So we’re doing deeper apartments. Forty-five is almost standard and good, but I’m going fifty, fifty-five, and in certain unique units even sixty or sixty-five feet deep. Zoning limits width-to-depth, but we get creative to create a unique apartment you wouldn’t get in a new building.
Gordon Lamphere: Is there a certain era of building that tends to have better bones for conversions, or is it truly case by case?
Eugene Flotteron: Really case by case. The old pre-war stuff was all we used to convert, because it wasn’t that big or deep. The big hulking post-war 1970s buildings all seem to be big curtain-wall buildings rather than punched-window buildings. If you have good punched windows, that’s probably a good thing; if I have very little window, I have a problem. My biggest problem in a lot of buildings, especially 1970s curtain walls, is they were designed to a five-foot module based on the office module, which is a terrible residential module. Ten feet center-to-center is a nine-foot-six living room, which isn’t wide enough; ten feet is almost the minimum. The next module over is fifteen feet, too wide for an efficient apartment, which becomes too big at fifty feet long. So you get really creative aligning the curtain wall with the columns and offsetting a bit at the perimeter. They’re a challenge, but solvable; I’ve solved them half a dozen times. You’ve got to be really good with the planning and know what you’re heading into. So it’s case by case, and today I say there’s nothing you can’t make work architecturally. We just have to figure out if it works financially. That’s the real tipping point: either conversions are faster and cheaper than a new building, or they take longer and cost more because you made it too complicated and modified it too much, and you hit the other side of the scale.
Punched-window versus curtain-wall, and the point where modification stops penciling, is exactly the kind of asset-level triage Chicago owners face as the office market bifurcates, which we examined in Sidley Austin’s 725 Randolph Signals More Office Trouble.
Gordon Lamphere: Let’s talk about that case-by-case difficulty. What’s been your most difficult conversion? Let’s walk through that case and how it worked out.
Eugene Flotteron: I’ll give you two to compare. 25 Water to date might be my most difficult. My most complicated smaller conversion was 30 Morningside, four hospital pavilion buildings, just complexity, a 250,000-square-foot hospital conversion from back when hospitals had horse and buggies. One of the main buildings was called the stable building; they used to keep the horses that ran the ambulances in it. Two of the four pavilions were landmarked, the other two not. My client wanted historic tax credits, a different complication, because it’s not just keeping the beautiful pavilion buildings but what you do inside; one prerequisite is preserving some of the existing circulation, even though you have to change a lot of it. We worked closely with them on how to conceptually preserve the patterning of the circulation while changing much of it. Every layer of complexity at once: landmarks, historic tax credits, preservation.
Our client bought it from St. Luke’s Hospital, and they’d had an analysis done by one of the top zoning people and one of the top attorneys in the city, who said that to convert it, you have to knock the carriage house down for light and air. But the historic tax people said if you knock the carriage house down, you won’t get tax credits. So I said, I don’t think we have to; there’s another approach on light and air. I want you to bring that same zoning person and that same attorney onto our team, and I think we can prove we can make this comply while keeping it. And we did. We kept the carriage house, it got the historic credit, and it’s the most beautiful shared amenity in the building, this beautiful old carriage house with an open ceiling and little round windows at the top, a gorgeous gem in the middle of the building. It was a go/no-go on historic tax credits; if he hadn’t gotten them, he’d have demolished those two beautiful pavilions and built a brand-new rental building, almost like what they did across the street on the church site.
That had every level of complexity: four buildings from four different eras, four different structural systems, only the third and sixth floors aligned. Each building had nine stories, each modified. I added twenty thousand square feet of new FAR the hospital could sell them. Everything in a barrel at once, and it came out so beautiful. Someone on the community board told me I made that project too nice, that it’s so expensive to live there now. I guess that’s a compliment and maybe a concern. We built it during COVID, one of the first buildings built during COVID, and because it had the historic tax credit program it was one of the special buildings that could keep moving forward. Building remotely during COVID, with all that complexity and structural modification, that’s probably the most complicated, but we got the new cores, the right efficiencies, and spectacular apartments in some attic spaces with historic round windows that we duplexed. It took time and creativity to find what unlocks the building and use as much of it as possible so none goes unused.
25 Water wasn’t far from that in difficulty, because today developers are very aggressive on timing. My biggest challenge is that they buy a building and want an apartment as fast as possible, because they’re carrying it.
Gordon Lamphere: Cost of capital.
Eugene Flotteron: So how fast can you start? I’m starting jobs where, within the first three months, the schematic phase, we end with a filing set so they can start the approval process for the change of use, which is really early. We do a separate interior demolition package so they can gut the building, scan and survey it, and get the right bones. If we’re doing structural reinforcing, that goes in as a separate alteration type-two so they can start and buy that work. At the end of schematic, they’re also buying the elevator package, upgrading and fixing the elevators separately, and there’s a window replacement out to bid. So five construction items could be happening while I’m just starting design development. As I get the project approved, I’m also finishing the design and documentation, and there are other early bid packages, because the next big package for a guaranteed maximum price is the MEP systems, and buying that at the end of design development instead of the end of construction documents. It’s that accelerated. This is the job. We create this overlap where you’re still in early design development but also in construction, getting shop drawings to approve for something you haven’t finished laying out. That’s the biggest rub with that speed. We have two separate teams, the construction team working the first packages and the team doing the design they’ll build when they get there. You’re building something we haven’t even designed yet, so we catch up to you, and you just make sure it all lands at the same end condition. At 25 Water, the whole structural steel of that overbuild and the bracing of the entire building was already bought at the end of schematic design. Our structural engineer looked at me and said, what do you mean I’m issuing design development? I’ve already issued construction drawings to bid. I said, well, we didn’t coordinate it all the way yet, we still need to finish that.
Gordon Lamphere: One of the things we love to coordinate on this podcast is our Final Four. It’s a great way to wrap up and learn more about you and the industry from a true expert. One of my favorite questions: what’s the biggest thing the industry isn’t talking about enough?
Eugene Flotteron: A couple of things. The rest of the country has to catch up with the incentive programs. DC has tax incentives, Chicago is doing something called a TIF, and Los Angeles is doing something too. You’ve got to find a way to get as-of-right approvals to get people to come in and buy these distressed deals and reimagine them. Our job is to reimagine them and make them into live-work-play communities. A million-square-foot project with that many apartments and that much interior space is like a neighborhood.
Chicago’s version of exactly what Eugene describes is the LaSalle Street Reimagined program, which uses Tax Increment Financing to convert vacant Loop high-rises, with the first project breaking ground at 79 W. Monroe, the historic Rector Building, supported by TIF. The trade-offs Chicago developers face, weaker absorption than Manhattan and the need for public subsidy to close the gap, are part of the broader housing-supply debate we lay out in Can We Solve the Housing Crisis Without New Construction?
The one opportunity I’ve always felt, because public space is important to us and we’re master planners as well as architects, is: when are all the public buildings going to start activating their rooftops the way our residential buildings do? So there could be a public realm above grade in a city like New York, starting with civic buildings. It’s one of the most spectacular things in these residential buildings, the views the community gets to enjoy, whether a rooftop or an amenity in the middle of the building. But it’s public for our building, not truly public; it’s almost impossible to make even a rooftop public in a residential building. Conversions allow commercial over residential, so we can maybe make a restaurant up there if it works for the deal, and then the public can use it and see spectacular views. But the civic buildings in New York have all these beautiful empty rooftops; if they were public spaces and parks, the whole city would benefit from that other level of public realm we don’t have much access to now. That’s an untapped market: how do we create additional public spaces that take advantage of what buildings can do? We’re in New York, we’re vertical, but our parks are on the ground. How do we get our public parks vertical?
Gordon Lamphere: That’s a really great point, a huge underutilized aspect of the urban real estate landscape. Speaking of underutilized things, we’re making a lot of progress improving urban spaces. What should we look forward to in terms of how the industry is changing, and what do you think the industry will be like ten years from now?
Eugene Flotteron: I think the public-private partnership is the main thing going on that’s revolutionary. It’s been going for a little while now. I’ve been to enough presentations where city officials admit they’re not good builders; they’re over budget, beyond schedule, it’s taxpayer money, and they can’t build a bathroom in a park for less than ten million dollars. They just don’t know how to do it. But a lot of the RFPs we go after, where the city sells off a site with all these requests for the private developer, are fantastic. Look at what they did in Times Square: the developer was key to finishing the public space of the train station first, before his temporary certificate of occupancy. They got private money to build a much-needed public space, and they did it on time, on schedule, on budget, because if they didn’t deliver it, they wouldn’t get their first TCO in the building that really makes them money. It’s a creative process of public and private working together, because the private sector builds on time and on budget, and the public sector supports it and holds them to certain requirements. It’s been done so successfully that I see it expanding as the most positive way to build in the public realm.
The government owns the most land; they’re still the biggest landowner in the country. As they figure out how to sell off portions that make sense, it’s a great opportunity for all the other asks. We won a project in Brooklyn through the Vital Brooklyn initiative, and again, the developer gets creative. Everyone gives them the housing the RFP asks for to a certain FAR, but what else have you got? On one project we found unused air rights from the MTA, so we could build a bigger building than everybody else by putting something outside the box, building to the zoning envelope from the public space right next door in the MTA building. On another in Brooklyn, on Clarkson, we proposed a half basketball court, they loved it, then asked if we could fit parking too, then asked if we could make it a full court that could be a community center. So we offered a community center with a half basketball court that turns into a full-court event center, and that community is going to have a really great community center in its building. I saw one RFP where the winning bid took the little hospital building they were supposed to build next to and instead knocked it down and put it in the new building, giving it a brand-new facility. You have to go beyond the lines of the RFP, but those RFPs create interesting creativity between the private sector and architects. I saw one where they offered to build it out of mass timber, super sustainable. The sustainability, the requirements to use solar, and certain affordability requirements come out of that creative process you wouldn’t get from just regular zoning and selling off land. I think that’s going to continue to be the future.
Gordon Lamphere: One of the things that keeps moving forward is time. We can’t go back in time, but we have a lot of younger listeners, and one question they always love: if you could travel back in time and give one minute of advice to yourself, what would it be?
Eugene Flotteron: As an architect, if I went back to talk to my younger self, it would be this: you have a reputation. I didn’t know I had a reputation until, having been at CetraRuddy for twenty-four years, I left for three years to work for a private developer, to see what it was like on the owner side before architects get involved. It made me a better architect now that I’m back and a partner in the firm, understanding the perspective of our clients in the deal. But as a young architect, I didn’t realize that when you’re doing a good job, you’re almost doing it for yourself. You might do it because you get paid and want a raise, but sometimes there’s an attitude of, well, it’s not really mine. That good job you do is your reputation, and that reputation is so valuable. When I left, everyone said, you’re the guy we want to work with when we work with that firm. I didn’t know that until I left. So if I went back, I’d say: all that good stuff you do, put your best effort in, because it’s worth something beyond a salary and a raise. It’s your personal reputation as someone with integrity who delivers, and that’s the value you create for yourself and your company. Don’t shortchange yourself. Be aware that all that work and effort to communicate clearly is building your reputation in this industry. I didn’t realize I had such a positive reputation from work I thought no one noticed, until I left.
Gordon Lamphere: We have a reputation on this podcast to bring on great men and women in the arena who provide advice and insight on their own expertise. Who should be the next person we bring on?
Eugene Flotteron: On this whole conversion topic, the client who did 25 Water, and we’re doing two other projects and a new building RFP with them, is Brian Steinwurtzel of GFP Real Estate. He’s a super innovator in the developer space. I find working with him fantastic, and his pushback has gotten us projects that create more housing with more efficiencies that make them more affordable in the market. When I listen to him speak, I learn so much about the deal that goes into real estate; he puts it in such great, simple terms. He’s a huge innovator in this market right now, so I’d bring Brian Steinwurtzel from GFP into your next meeting.
Gordon Lamphere: I’d love to have Brian on, and if you could make a connection, that would be much appreciated. If somebody wants to connect with you, what’s the best way to get in contact?
Eugene Flotteron: Call my office, going through reception is still not invalid, or email me, or catch me through LinkedIn and connect that way. Email is one of the better things; calling the office is item three for getting me quickly. Everything that goes through the office system comes right to my cell phone. I don’t necessarily answer numbers I don’t recognize, but I do call them all back.
Gordon Lamphere: Eugene, thank you so much for hopping on today. We really appreciate it, and we have to have you on in the future.
Eugene Flotteron: Thank you, I was glad to be on.
Gordon Lamphere: Thanks again to Eugene, we appreciate his insights. If you enjoyed the podcast, please give us a like, a five-star rating, and a review. Your comments, subscriptions, and interactions truly matter and help us continue to get quality guests. You can find us on YouTube, Spotify, or wherever you get your podcasts. I’m Gordon Lamphere, the Real Finds Podcast, and thank you for listening.
Van Vlissingen and Co. has been the Midwest’s oldest commercial real estate brokerage, development, and management firm since 1879, and today is independently ranked the #1 commercial real estate agency in Chicagoland, home to the #1 independently ranked agent, Gordon Lamphere, and the region’s #1 ranked commercial property management team. If you own, manage, or invest in office, mixed-use, or conversion-candidate property across Lake County, the North Shore, the Northwest and O’Hare corridors, DuPage and the I-88 corridor, Will County, or southern Wisconsin’s Pleasant Prairie, Kenosha, and Racine markets, contact Van Vlissingen and Co. at 📞 847-634-2300 or 🌐 vvco.com. For a market-wide view of where these dynamics sit today, see our State of the Chicagoland Commercial Real Estate Market for Q2 2026.