Converting Warehouses Into Tech

Michael Sonnenfeldt developed a commercial real estate project converting an industrial warehouse into a tech center for Wall Street firms, capitalizing on the growing need for computer centers near financial districts in the 1980s.

Key Points:

• Core Concept:

  • Convert large industrial warehouses into computer centers
  • Target location: 3,000 feet from Wall Street across the Hudson River
  • Property: Largest building in world when built in 1929 (later eclipsed by Pentagon)

• Strategic Advantage:

  • Only 5 minutes from parent companies via PATH train
  • Solved problem of computer centers being too far from headquarters
  • Building had ideal specifications:
    • Appropriate floor loads for computer equipment
    • Ceiling heights that could accommodate raised floors
    • Structural capacity for heavy equipment

• Market Opportunity:

  • Wall Street firms needed computer centers
  • Alternative was suburban campuses that felt disconnected ("like Siberia")
  • Close proximity maintained connection to parent company

• Outcome:

  • Sold when founder was 30 years old
  • Project sold for over $100 million in 1987
  • Heralded as most successful real estate project in metropolitan history for financial return