Take a look inside an abandoned high school turned apartment building
In 2019, Jesse Wig, 35, was approached with an off-market deal to buy an old high school in Homestead, Pennsylvania, located about seven miles away from Pittsburgh. The building had been abandoned for almost 10 years. Wig, a real estate agent and investor, saw the potential in the space, but knew he couldn't take on the project alone. He got in touch with Adam Colucci, a 35-year-old real estate investor and owner of an audio-video business, and Dan Spanovich, a 42-year-old real estate developer and lawyer. In May 2019, the trio bought the abandoned school, Bowtie High, for $100,000 and converted it into a 31-unit apartment building. The renovation started in early 2020 and took about 18 months to complete.
"Bowtie High" was converted into a 31-unit apartment building. Alexis Zakis
Colucci tells CNBC Make It their biggest concern was how much money would be needed to convert the space, which became an even more urgent matter when the partners had a bank pull its financing at the last minute. Wig, Colucci, and Spanovich found a different bank and secured a $2 million mortgage, which they pay down at $12,129/month. The partners also put in $1.3 million of their own money. In total, renovating the old school cost $3.3 million, an amount that the partners are still shocked by. "I'm not sure we would have done the renovation in the beginning if we would have known what it was going to take," Spanovich said.
The partners converted the old high school's auditorium into a resident's lounge. Valentina Duarte. Photo by CNBC Make It
Renovating an old high school meant the project qualified for historic tax credits from the state of Pennsylvania and the federal government. But it also meant they had to keep the historical significance of the building and its hallways. Wig, Colucci, and Spanovich took it a step further by reusing some of the original materials found in the school, like an old bookshelf and the original hardwood floors from the former auditorium.
Leasing started in October 2021 before renovations were even completed
Leasing at Bowtie High started in October 2021, and within six months, the former high school had reached 100% occupancy. There are 31 units in the building, with monthly rent for one-bedroom apartments starting at $1,400 and two-bedrooms starting at $1,600.
The one-bedroom apartments still have the original chalkboards. Valentina Duarte. Photo by CNBC Make It
Some units that used to be classrooms have the original chalkboards and an enviable amount of natural light, thanks to massive windows throughout the space. Apartments are also equipped with stainless steel appliances, in-unit washers and dryers, and walk-in closets.
Bedrooms have a lot of natural light thanks to the old high school's large windows. Valentina Duarte. Photo by CNBC Make It
Wig, Colucci and Spanovich are reinvesting profits into a second abandoned school
When Colucci learned that the school just right across the street from their property was up for sale, it was already under contract with another investor. But that deal fell through and in 2020, the partners bought it for $90,000, with a $3.25 million mortgage. "I knew that we needed to have it in our portfolio mainly because when you look out of the front windows, that's what you see, so we could control what we see," Colucci said. Spanovich estimates they will need more than the mortgage amount to finish the school because it's been a "much more challenging project than Bowtie High was."
Wig, Colucci, and Spanovich bought the abandoned school across the street for $90,000. Valentina Duarte. Photo by CNBC Make It
When the second school is complete, it will have 33 apartments and amenities like a rooftop deck, indoor parking, and a common lounge on the lower level. It will have about seven apartments on each floor. Renovations for that school are expected to be completed in July 2023. The units will feature the same 14-foot high ceilings from the original classrooms and the concrete floors, that the partners were able to save and refinish. "These buildings sat vacant for a long time and a lot of investors passed on them before we came along," Spanovich said. "I'm invested in this area not only financially but from the aspect that I live here and I want the area to continue to improve," Wig added.
Source: CNBC
