When an abandoned high school in Homestead, Pennsylvania, was put up for sale in 2019, Jesse Vig saw an opportunity.
The sellers were asking just $100,000.
The 34-year-old real estate agent bought the school, then contacted a friend, who connected her with Adam Colucci, 35, a real estate investor and owner of an audio and video business.
“They told me about the school, and to be honest, I wasn’t sure what mattered most to do with the building,” Vig told CNBC’s Make It Future.
For two years, Vig and Colucci pondered what to do with the structure. They envisioned a wedding venue, a beer garden, and even a WeWork space.
“Our eyes widened and after two years of thinking about it all the professionals told us that all roads lead to home,” explains Colucci.
The two realized they needed help and contacted Dan Spanovich, a 41-year-old full-time multi-family real estate developer and manager.
“These old buildings can be very difficult to replace,” says Spanovich. “We were willing to take the risk regardless of what we were going to use it for. We knew that, at this price, we would be able to find some use for it that would be large enough to satisfy everyone.” will produce results.”
The institute’s old classrooms were converted into new, modern apartments with washers and dryers, and the auditorium became a shared space. They also added a full gym on the ground floor with a half basketball court, weights and Peloton bikes.
The institute, which had not been used for many years, was 50,000 square feet. With this much space, the three partners hoped to have about 60 apartments.
In the end, they were left with only 25,000 rentable square feet, the equivalent of 31 apartments, due to the large hallways, stairwells, gym and auditorium.
Colucci said it was important to him that the building retain some elements of the school. “We worked closely with the National Park Service to ensure that it maintains its historical significance,” he said. “We made every effort to preserve the school in its historic form.”
The partners received historic tax credits from the federal and Pennsylvania state levels, though they declined to disclose the exact amount.
Construction of the building began in early 2020 after purchasing the school in May 2019 and was completed in October 2021.
The final product consists of 27 one-bedroom apartments and four two-bedroom apartments. The partners also added solar panels to the school’s roof to help reduce its environmental footprint.
Leases began in October 2021, and after only six months, the building reached 100% occupancy.
Spanovich said the building’s rent was as high as $1,400 a month for some 1-bedroom units and $1,650 for 2-bedroom units.
When it comes to sharing profits and expenses, Colucci said that he, Vig and Spanovich split everything based on a proportionate share of the building.