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A historic building in the downtown area that housed paintings by Antonio Berni will have a new destination
November 23, 2023
Built in 1920, the building served different functions - such as being the guardian of Antonio Berni's works - now it will have homes and a gastronomic market.
The headquarters of Banco Galicia in the downtown area will be homes with an investment of $6,500 million in two buildings
It was 1920 when Argentinians walked around the streets of downtown Buenos Aires in suits and long skirts. On Perón Street, between San Martín and Reconquista, a building dedicated to the shipping industry had just been inaugurated. Neoclassical in style, the architects who designed it exalted the construction: Walter B. Bassett Smith and Bertie Hawkins Collcutt, the minds behind the British embassy.
But the summers passed, fashions changed and the building with art deco balconies also mutated to catch up with the latest trend. This is how for some years it housed works by famous artists - such as Antonio Berni - while it functioned as a gallery. Little by little, it began to sell its functional units to be used as offices.
From offices to homes, from bank to developer
With more than 100 years of history, this building of neoclassical French architecture today once again shines its chameleonic capacity and once again adapts to the trend: it will transform its offices into exclusive homes and will have a gastronomic market. In this way it will be aligned with the City Government's plan to convert the downtown into a 15-minute city
This is what the historic building will look like when its conversion is completed
The company behind the project is Banco Galicia, which “with this work becomes the first case of a banking institution that focuses on real estate development ,” says Nicolás De Mestico, Real Estate and Works Manager of Banco Galicia . More than 40 years ago, the bank began buying some units in the building until the 90s when it finished buying the last one and remained the sole owner, an advantage it took advantage of to be able to transform it without obstacles.
In fact, they will not do it only with this building but they already have the go-ahead to replicate the idea with a second one a few blocks away. In total, it will invest $6.5 billion in the conversion of both office buildings into homes and estimates that after a 14-month work that begins in April, they will be delivered in the second half of 2025.
The move has a double impact: on the one hand it adds value to buildings in the neighborhood and on the other it eliminates from its books the expense of $38 million a year that it currently has to maintain two empty buildings. Both are class B offices, a market of which the bank concentrates 8% of the stock in the historic financial district of the downtown area, while it also owns 25% of the class B offices in the neighborhood.
The second building that will be converted was built in the 70s
The transformation transcends this duo of buildings and devastates the neighborhood. “The downtown comes from a public recovery between the Paseo del Bajo, pedestrianization, bike paths and the metrobus that we estimate required an investment of US$350 million in recent years.” With that basis, the government sanctioned the law that proposes giving another life to the microcenter to attract private investment, which it attracts with tax benefits," says De Mestico and calculates that the 150,000 square meters already approved represent a private investment of US $230 million of which US$70 million will be reimbursed by the Gross Income exemption of between 50% and 60%, according to the project.
The perimeter reached by the transformation plan of the Buenos Aires microcenter
The new face of buildings
Designed for permanent residence and driven by Puerto Madero, the project on Perón Street includes 54 studio-type apartments of 26 m² to three rooms of 70 m² with three-meter-high ceilings, amenities and a fashionable space: a mini gastronomic pole.“On the first level there will be a gastronomic market that will be interconnected with the Torre Galicia next door - designed by Mario Roberto Álvarez - through a green and public plaza that we will make between both buildings that will serve to give it momentum. to that classic corner of the downtown area of Perón and Reconquista ,” explains Martín Seijas, Habitat Design leader at Banco Galicia. On this level there will also be an art gallery.
One of the attractions of the project is to highlight the corner with a gastronomic market
Projects that have more than 60% of the green space on the terraces can request an extra percentage of tax exemption
Nature will extend to the terrace, where more than 60% of the space is green . Projects that are part of the reconversion program and meet this characteristic can request an extra tax exemption for adding green spaces to the neighborhood.
The second building to be refunctionalized is located on Maipú Street, one block from Corrientes Avenue with its theaters and its influx of tourists. This is the case of a more modern building, built in the 70s. Being rationalist, it is configured like most office buildings today: as a large open floor plan. “That is why this project is going to have 52 smaller homes that will be complemented with many common spaces from the basement to the seventh floor under the logic of coliving ,” says Seijas.
The units within the Perón Street project will have three-meter-high ceilings
This project will also have two commercial areas that could add gastronomic spaces to the downtown or could function as the businesses that the area demands, such as a gym.
None of the buildings includes parking space in their plans, a fact that blends in with the new concept that surrounds the area to turn it into a “15-minute city”: revitalizing a place with connectivity, services, offices, housing, education, entertainment and gastronomy . The idea is to minimize the use of the car and that you can reach all points of interest on foot.
In that sense, the law promoted by the Buenos Aires government encourages - in addition to housing - the construction of spaces related to the revitalization of the area, such as gastronomy, health and education. There are already several institutions that have opted for this idea. For example, on the corner of Perón and San Martín it was rented by the Technological Institute of Buenos Aires (ITBA) and the CEMA University purchased the historic Maple building in July 2023 from IRSA for US$5.75 million.
The CEMA University also joined the microcenter reconversion plan and bought the Maple building from IRSA for US$6.76 million
The challenge of converting
The mission to revive the downtown and transform its corporate buildings into residential ones is not an easy task. The fact that the structures are already made is a double-edged sword: on the one hand, savings are made in the construction of the bases, but on the other hand, sometimes extra expenses have to be incurred to adapt the pre-existing structure to its new use.“In this case, if the project were built from scratch, the construction of the profitable square meter could cost between US$900 and US$1,000, but in these projects it costs between US$1,100 and US$1,200,” says Martín. The question that arises is why a developer would invest more money in something that needs to be remodeled if it could actually cost less by doing it from the beginning.
Part of the bank's commitment to the area is the long-term revaluation of properties
For example, Seijas maintains that in open-plan buildings that are a standard product today, they usually have a single battery of bathrooms that has to be distributed to the rest of the floor, or they have curtain wall -style windows that usually show off the façade of the building . and provide luminosity but they cannot be opened. In that case, the carpentry and structure must be modified from scratch with the costs that this implies to make them functional for their new use.
For De Mestico, that is when the Porteño Government program enters the scene and adds value. “The cost of construction is the same throughout the city and when in five and eight years many players join the area, the neighborhood could revalue and be able to quote the same values as Palermo ,” he says.
Added to this long-term factor is the short-term tax exemption and an aspect that for Seijas is fundamental: “Architecture takes care of the heritage and with this transformation we can maintain the spirit of the area and its heights. ” For example, in the building located on Perón, its classic architecture, its arches and pine floors and original carpentry will be preserved.
Building a residential building of just over 1,000 total square meters in eight-story horizontal property requires an initial budget of more than US$564,000, according to the Real Estate Report.
With so many obstacles in the way of reconversion, a question that arises is whether or not it is worth taking on this challenge or whether it is preferable to carry out construction from scratch. In Buenos Aires, for example, building a residential building of just over 1,000 total square meters in eight-story horizontal property requires an initial budget of more than US$564,000, with a cost per salable square meter of US$714, according to calculations by Real Estate Report as of the first business day of November.
Noel Epelboim, CEO of Epelboim Real Estate , the developer that converted more than 270,000 square meters in Venezuela, Costa Rica and the United States, points out that beyond cost, there are other factors that intervene in the equation.
“ From a numbers point of view, perhaps it was easier to demolish the building, but factors such as the economic situation must be taken into account .” For example, in a complex context, constructing a new building implies investing more capital to make a larger project. Therefore, larger loans must be taken, which in turn presents a higher risk, and in an economically complicated framework there would be fewer banks in the pool willing to lend larger amounts,” he says.
In that sense, recycling a building is convenient for the developer who seeks to avoid suffering the ups and downs of the Argentine economy. This is possible because when a building is transformed, the work takes at least half as long as a traditional building from scratch usually takes. For example, that of Banco Galicia is stipulated to be completed in 14 months.
The downtown is a historic financial district and there are still many different banking entities there
In short, Epelboim summarizes that, although the theory indicates that the larger the building, the more money is earned, the other side of the coin shows that the larger the project, the more risk it takes, the more time it takes to build, and The extra money needed means more debt.
But money is not everything. Beyond the expenses that having two old unused buildings means to the bank, De Mestico talks about the fork in the path the company was taking. “There were two alternatives. Today these two buildings have no use value for us or for the market, since the vacancy of class B offices in the area is around 40%. We can then leave the skeleton of an elephant, as happened with a construction near the Maipú building, or we could choose to value it and give it life with the environment, as we decided to do,” he explains.
A no small fact is that the bank has an advantage that few buildings in the downtown have: they belong to a single owner. “In the area, the majority of class B buildings are that there are many co-owners who would have to agree to carry out such a project ,” he points out. Like Galicia, there are other entities as the sole owners of building properties that outline the path of reconversion. Some examples could be the Tornquist and the Del Plata building.
The Tornquist building is another of the office buildings that will be converted into homes.
