Upper floors in old buildings: why are they so hard to put to use?

City planners, chambers of commerce, commercial real estate brokers, and Business Improvement District (BID) managers should have no difficulty finding common ground on a number of subjects.  Generally speaking, they don’t run out of things to talk about.  And while they might cavil about the finer points of what is more important in attracting investment and capital to their favored jurisdictions (or districts within a jurisdiction), those are different means of reaching the same end-state.  The teleology is the same.  But one topic comes to mind where near-unanimity exists for both the means and the ends—where they really have a lot in common.  Any reader who belongs to one of these professions (and hasn’t come to this article through my spoiler promos) can probably guess: it’s the never-ending challenge of enlivening the upper floors of historic, 19th century buildings in commercial main streets.  We’ve all seen them even we don’t think about them, but they linger. 

For those who don’t belong to one of the aforementioned professions, I offer a particularly striking example:

vacant upper floors in Zanesville, OH

This beautifully ornate façade graces one of the main streets in downtown Zanesville, Ohio, a city of about 25,000 people located 55 miles east of Columbus—far enough away that it’s not likely to enjoy much residual benefit from suburbanization around the state’s fast-growing capital.  Regardless of whether Olde Town Antique Mall is the owner of this structure, a hearty kudos must go out to whoever has devoted the labor and money to maintain the color contrast on all those ornamentations around the cornice line.  But it’s hard to imagine the investment has yielded much return: look closely at those windows in the upper floors and its obvious there’s not much going on.  Few if any curtains on the second floor.  A strange trellis-like latticework on the second floor, but scattershot panes of glass are missing.  The upper floors are storage at best and possibly completely vacant.  It’s highly unlikely there’s much climate control.  And, if the building commanded a great value, they’d likely be able to attract a more lucrative tenants.

Loath as I am to impugn a mom-and-pop tenant like Old Town, these sort of antique malls are a dime a dozen, frequently the most prevalent tenant in small towns that lack tourist clout…which is most.  Sure, these stores are as likely as any place to hide some fantastic find worthy of Antiques Roadshow, but they often deploy the term “antique” liberally because it has more clout than “thrift store” or “scavenge shop”.  But antique stores like this one in Janesville typically need a big broad floorplate at a low price, since they carry a large volume of merchandise, much of which has a low likelihood of selling.  If Zanesville were an economically healthier city, a façade like this one could command something with higher earning potential: a clothing store, a restaurant, a brewpub—maybe all three.  And those upper floors could function as offices, apartments, or even some novelty use; economically healthy places like King Street in Old Town Alexandria host more than one escape room in the upper levels of these old commercial buildings.

I can’t credit the owners of this Zanesville building enough; the economically depressed city on the edge of Ohio’s Appalachia have salvaged a beautiful building with a stable tenant that hopefully can at least generate enough money to keep the place looking so nice, even if those upper floors are drafty and musty and moth-filled (at best).  Travel 200 miles further east, and the building below can’t claim so much luck.

vacant upper floors in Frostburg, MD

This image comes from Frostburg, Maryland, a town much further ensconced in Appalachia than Zanesville, and in a generally more remote location.  While busy Interstate 70 bisects the Ohio city, Frostburg is close to nothing more than I-68, which, though a perfectly viable interstate highway, gets nowhere near the traffic: I-70 traverses more than two-thirds of the countries lateral distance, but I-68 is a mere 112 miles long, linking Cumberland in Western Maryland, with Morgantown, West Virginia (where it terminates).  I-68 travels through mostly rural, rugged terrain; Frostburg is one of the largest cities nearby, and its population is a mere 9,000.  All things considered, Frostburg’s downtown is more intact and occupied than one might expect given the lack of economic vitality in most of Western Maryland; the presence of Frostburg State University no doubt helps.  But the building in the photo doesn’t exactly manifest a high level of downtown investment.  The first-floor tenant is a real curiosity: the Community Model Railroad Club, open to the public to view a collectively curated model train display.  No cost.  It is no doubt a delight for model train aficionados young and old, but this railroad club would never be able to pull this off in a high-rent building.  And, much like the example in Zanesville, this Frostburg structure’s upper floors are vacant.  Not particularly subtly vacant, either.

It’s an age-old problem: the economic model that prompted 19th century main streets to host buildings like this simply hasn’t found a counterpart in 2023, at least not one that has the replicability that those sturdy buildings enjoyed in 1875.  I can detail how upper floors went from strategic space management to a white elephant through a crash course in the history of American urbanization.

Prior to the automobile, the live/work model was practical.  In a nation predominantly rural and agrarian, which characterized the US (and every other nation) at least until the latter half of the 1800s, those who didn’t own large farmsteads—who most likely worked in trades, services, or industry—needed to live close to work.  At that time, fifteen miles was still a considerable distance.  And for those who owned their businesses, it behooved them to consolidate residences and the “showroom” for their businesses under one roof.  Convenience, efficiency, and cost savings all prompted the model of the two- or three-story commercial building: business on the bottom, residence atop.  At least a few of the upper floors might also serve as storage to support the business; the logistical model of freight trains (long-haul) and horse- or ox-drawn wagons (short-haul) didn’t allow the same sort of bulk handling of merchandise, so back-room warehouses did not exist in any large degree.  People received surplus goods and used pulleys or rudimentary elevators (dumbwaiters) to get the additional merchandise to the upper floors.  Or they schlepped the stuff up the back stairs.  The good old days.

vacant upper floors in Welch, WV

The advent and proliferation of the automobile prompted two quiet spatial revolutions that weakened the need the commercial buildings that dominated the 19th century (and quite a few preceding centuries).  Cars—and bicycles for that matter—made it easier for upwardly mobile people to own property separate from their business, so they might have a brief commute.  And freight-hauling motorized vehicles reduced the logistical network’s dependence on railways, favoring the vaster, more versatile road network.  As a result, the upper floors had less reason for being, though a growing need for supportive services (finance, insurance, real estate, among others) still encouraged re-use of those upper floors to offices, especially businesses that don’t depend on garish first-floor display windows to attract customers.

But the escalating appeal of car ownership helped it become mainstream—not a recreational curiosity the elite enjoyed on weekends, but a utilitarian commodity readily available to the middle and even working class.  A necessity.  More people could live farther from their work; retailers could store more off-site in warehouses.  However, the centers of small towns and large cities lacked space to park all these cars.  And, by the 1950s and 60s the paradigm of concentrated, central commercial activity began to weaken, to the point that those upper floors just weren’t necessary.  They devolved from surplus storage to junk storage. They fell into neglect.  The businesses could function fine on the street-level first floors, rendering the upper floors as excess space.  By the mid 1960s, even the first floors had lost their cachet, as more retailers migrated to the shopping centers and malls in the suburban fringe, where parking was abundant, land was cheap, and shopping was closer to where all the cool kids were moving.  The 19th century commercial buildings suffered obsolesce, and the abandoned ones began to rot to a degree that necessitated demolition.

During the peak Mall Era, from 1970 to at least 1990s, old-school main streets and downtowns seemed passé.  But a backlash against malls helped historic downtowns enjoy a bit of a renaissance at the 20th century’s end.  Historic preservation as a discipline sparked a renewed love and desire to salvage the old buildings, including those upper floors.  The recognition that walkable, consolidated downtowns yield their own benefits emerged in part from  a quasi-rebellion against the dull, dowdy suburbs and an appreciation for the nostalgia and aesthetic of the main street of yesteryear.

But it’s never quite return to 1875.  Any buildings got demolished that parking lots and vacant lots leave out main streets at least partially gap-toothed.  And even gorgeous old buildings like the one in Zaneville can’t always claim enough clout to find a better use for those upper floors than junk storage in a musty, climate-uncontrolled setting.  While prosperous corridors in thriving cities like Alexandria can claim near-full occupancy (both street level and upper floors) , the Frostburg Community Model Rail Club buildings are still far too common.

The best indicator of well-used upper floors is the general density of economic activity in the surrounding area.  The brown buildings in the previous three photos all lurk in and around Welch, West Virginia, the seat of McDowell County in the far south of the state—one of the most economically depressed counties in the country, and one that has lost 80% of its population from the 1950 peak.  Not surprisingly, plenty of buildings in Welch’s downtown, feature unambiguously empty upper floors.

But the opposite extreme is not great surprise: Manhattan Island in New York, the most densely populated place in the United States.  Take this building in the bustling Hell’s Kitchen neighborhood.

A corner building hosts a fully operational Mexican restaurant, even as the upper floors are, to put it mildly, under distress.

Some plywood in the windows of those upper floors.  Is this a blighted part of town?  Not in the least.

But something had clearly happened to the building when I snapped this photo in the summer of 2021.  Looks like the upper levels sustained significant enough fire damage to render them uninhabitable.  Floors three through five got singed. But things are not so bad on the ground floor to keep Rancho Tequileria from slinging salsa.  It’s a testament to the resiliency of the Manhattan economy that a building can get burned badly enough that it’s obvious to the untrained eyes…but nobody’s scared enough about structural stability to shy away from the restaurant.  It continued to operate even while the upper floors languished in a post-conflagration mothballed state.  I I guess the restaurant owners knew better: a building this valuable isn’t going to sit damaged and vacant for long.  don’t know what caused the fire or how long it looked this way, but I’d be surprised if those upper floors were vacant more than a year. The damage simply wasn’t bad enough, and by summer 2022 the five-story building was fully restored.

vacant upper floors in Hell's Kitchen, NYC

Hell’s Kitchen and Frostburg are polarizing demonstrations that, as much as these multi-story commercial buildings manifested the mixed-use gestalt by 19th century standards, the difference in use between ground floor and upper floors precipitated their untethering in the 20th century.  Simply put, upper floors operate on a totally different social and economic plane from the one at street level.  It’s not hard to see: the different fenestration, the need for stairs to access, and the possibility for nuisances (living right above a restaurant yields noise, annoying smells, and potential vermin pests).  All of these have bifurcated the real estate potential from floor one and everything above it.  And I’m aware of no trends that are going to change it.  Even for those businesses that lease the entirety of a three-story building, there’s little chance that operations on the second floor will look identical to what’s happening on the ground floor.  Heck, a person could run a thriving distillery at the street level while the upper floors are smoldering ruins from a fire.  Okay, hard liquor and flames—not exactly the best example.  But the point still stands.

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5 thoughts on “Upper floors in old buildings: why are they so hard to put to use?

  1. Chris B

    Along with suburbanization, the real estate industry became fairly specialized. Whereas once, Mom and Pop owned the business and the building and lived in one of the upper-floor units (and possibly rented out others), today residential rentals and commercial space rentals are specialized disciplines. Only recently have urban residential landlords been faced with renting that ground-floor “commercial’ space, and except in the hottest parts of any city, they don’t have many takers and much of it sits vacant for a long time.

    An example in your hometown is in The Cosmopolitan at Michigan and Senate, where the “ground floor retail” sat mostly vacant for long stretches since the building was completed more than a decade ago, and where the tenants are typically NOT “retail”…currently it’s occupied by office space for “Direct Connect Logistix”. Hardly “activation” of the ground level that was anticipated by the Indianapolis Regional Center Design Guidelines. Another example is The Hudson, which has always had office uses on the ground floor (for 10-15 years of its existence).

    In contrast, the ground-floor commercial in the more-recent “Axis” development diagonally across the street from Cosmo has been continuously occupied by a grocery store and a couple of smaller “active” uses. But I suspect Axis was designed around a grocery tenant from the start, while Cosmo simply hoped to attract one.

    1. AmericanDirt Post author

      Hi Chris, it certainly seems like property management has grown more complex and almost partitioned over the years. I suspect that the phrase “mixed-use building” didn’t exist when they were the status quo along main streets, nor as suburbanization and Euclidean zoning pushed everything out, flattened it (lower FARs), and separated the uses. No, I imagine “mixed-use building” only emerged as advocates began to push for a return to old town centers.

      But the mixed-use building (whether built in 1880 or 2020) still must compete with the other typologies out there, none of which has become as obsolete as an urban main street building had become by 1980. This probably explains the condition of the 1st floor retail in the Cosmo, or Hudson, or even the fact that, as recently as the early 2010s, close to half of the first-floor space on Mass Ave was office uses that really didn’t need those storefront windows, but earned them because the building owners needed tenants. I wrote about this back then: http://www.urbanindy.com/2013/03/22/mass-ave-retail-vibrant-behind-those-venetian-blinds/

      I’ve made my peace with the notion that any tenant can and should take the first-floor space. And while retailers are still more desirable (they rarely can flourish on a second floor), the state of retail is so fraught at this point that even converting a storefront to residential seems better than riding out time with a long-term vacancy until the perfect tenant comes along. Of course, property owners/managers in Manhattan seem to have decided otherwise, since they can write the depreciation off on taxes, paying less for a vacant building because they’ll be assessed for less. At this point I don’t imagine the Cosmo or the Hudson will ever get an edgy restaurant or even a Jamba Juice.

      Frankly, I had no idea the Hudson even supported office tenants. Is it the building at the southeast corner of Ohio and New Jersey? Geez, that entire intersection really suffers from the prevalence of late 90s/early 00s single-use construction: what looked urban by those standards now almost seems more suited to the near East Side. Or Carmel, if Carmel had lower design standards.

  2. Jeffrey Jakucyk

    Sorry for being late to the party, but there’s a couple other items to consider. Chris B touched on the real estate industry’s lack of creativity when it comes to managing multi-use buildings, but the banks play a role too. Mortgage and construction lending is so balkanized that it adds another layer of difficulty to an already onerous situation. Owner-occupied plus additional tenant spaces, some commercial some residential, is the sort of the thing that would blue-screen most mortgage lenders. It’s just not commodifiable enough.

    Building codes don’t help either. Assuming a mixed-use building is allowed by local zoning (a big assumption in some of these smaller burgs), the building code puts up some pretty hefty requirements for fire separation between different use types. Retrofitting fire barriers between a first floor restaurant and offices or apartments above can be quite challenging. Restaurants by their nature also have a plethora of ventilation and refrigeration equipment that can be quite difficult to integrate into a multi-story building.

    Lastly, while ADA is usually a solvable problem in existing buildings, the need for two means of egress is often the deal-breaker. Many of these old buildings only had one stair to the upper floors, and fire escapes just don’t cut it anymore. The small floor plates and aforementioned fire separation issues mean that an external stairwell is often the only viable solution, but that could very well eat up a couple parking spots that were surgically carved out of the rear and in themselves still don’t satisfy the suburban-minded parking requirements of the local zoning code.

    Rock and a hard place.

    1. AmericanDirt Post author

      Thanks Jeffrey. Your reference to lending risk probably explains why probably half of these first-floor retail places actually happen quietly and organically, but not in conventional commercial main street settings. I covered this many years ago with some obscure examples in Indianapolis: https://dirtamericana.com/2010/02/extreme-makeover-small-business-edition/

      I suspect this sort of thing happens all the time: a home fronting a highway/arterial or collector road with less stringent zoning becomes a home business, and the owner-occupier builds an office or storefront atop the house. Such multi-use properties are probably even harder to commodify than the 19th century commercial buildings, but they’re viable as long as the business remains viable and the owners live above (or in the back).

      I didn’t know what you said about building codes and fire barriers, but that no doubt would further compel banks to be hesitant. The ADA detail you mention I probably sort of understood unconsciously, but you articulated it better than I ever would. Again, it probably mostly ties to building codes and fire safety, and, as you note, it’s very difficult to retrofit.

      That said, a high-value commercial main street (my example was King Street in Alexandria, VA) does not seem to have too much difficulty finding tenants (office, residential, or occasionally even second-floor retail) for those upper levels. Then again, I’m sure at least a few of these old buildings merely look activated on the upper levels but are still probably underutilized. Lastly, I’ve learned that Alexandria has applied an extremely high standard of historical architectural fidelity for its infill structure. While there are at least a dozen prominent buildings on King Street that don’t try to look authentic, and, therefore, make no effort to hide the fact that they are up to code, a number of buildings throughout Old Town Alexandria are in fact infill from the 1980s to 2010s, effectively capturing the patina of a historic structure while being 100% code compliant by fiat. This can only happen in a place with intrinsically sky-high land values, which is almost certainly never going to be the case in Frostburg MD or Zanesville OH.


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