That rarest of properties

As seen on ReJournals.com

That rarest of properties: Park Place Holdings converts Kimberly Clark office property to 55-plus apartment development in Wisconsin

It takes the right property and the perfect location. But when it happens? A conversion from an office property to a multifamily development can remove unwanted space from the market and replace it with desperately needed — and in-demand — housing.

That’s what happened earlier this year in Neenah, Wisconsin.

Park Place Holdings, a De Pere, Wisconsin-based commercial real estate investment firm, completed its transformation of a former Kimberly Clark office building into Marathon Flats, a 55-plus apartment community.

Park Place holdings in July is schedued to complete Phase II of the project, delivering an additional 30 units. Once this phase wraps up, Marathon Flats will offer a total of 61 residences designed for older adults.

Getting to this point did take time, though. That’s not surprising. While conversions seem like a good way to remove underperforming and outdated office space from the market, adaptive reuse projects are rarely simple jobs.

“Conversions are not impossible, but they are often close to it,” said Corey Vanevenhoven, director of development for Park Place Holdings and the project manager of Marathon Flats. “Only about one in every 10 office buildings work for a conversion. Usually, the numbers don’t pencil out and it makes more sense to focus on ground-up construction. But this property was one of those rare ones in which a conversion did make sense.”

Park Place Holdings began its work on Marathon Flats in June of 2022 with initial city meetings, rezoning requests and approvals. The company then acquired the building in August of that same year. Park Place purchased the 148,000-square-foot single-story office building from Kimberly Clark Commercial LLC for $3.75 million, equal to $25.34 a square foot.

Park Place Holdings completed Phase I of Marathon Flats in November of 2023. The company decided to begin the second phase of construction after the successful lease-up of Phase I. Demand was strong for the 55-plus housing units.

Marathon Flats includes studio, one-bedroom and two-bedroom unit residents. One-third of the property remains dedicated to office space for Kimberly Clark.

What made this property such a good choice for a conversion to housing for seniors? The Kimberly Clark property was only one story. That made this an ideal fit for older adults who might face mobility challenges.

That doesn’t mean that the conversion was simple. As Vanevenhoven says, Park Place Holdings had to completely redistribute the property’s electrical and plumbing systems. This was necessary to ensure the safety of residents.

In addition to the property itself, the location was a good fit, too. Marathon Flats is close to the highway, which makes it easier for visitors and residents to reach the property, Vanevenhoven said. It also sits on the edge of an industrial park. This means that Marathon Flats is surrounded by 20 acres of green space, something that makes the property an attractive one for residents.

The development is also next to a Neenah police station. That doesn’t mean guaranteed safety for residents, but it does provide reassurance to residents who might be worried about crime, Vanevenhoven said.

Park Place Holdings was creative with amenities, too. The property features two outdoor courtyards with gas grills, outdoor furniture and outdoor kitchen areas. Marathon Flats offers golf simulators and an infra-red sauna. Residents can also take advantage of an indoor community room, yard games and a fitness center. Security cameras monitor the property.

The apartment units come with in-unit washers and dryers, air-conditioning, dishwashers and insulated double walls for privacy.

Vanevenhoven said that demand has been strong since Marathon Flats began welcoming residents last November.

“We had a goal with our lender to get to a certain number of phase-1 units leased up. Opening in November is not the ideal time to do lease-up. But we hit that number within about five months,” Vanevenhoven said. “We have about 10 of our second-phase units leased up already. Lease-up is going extremely well.”

Vanevenhoven said that Marathon Flats hits a certain niche. The property is not low-income housing and it’s not high-end, luxury housing, either.

“We are not creating luxury housing with granite countertops,” he said. “But everything is new and fresh. It is very appealing to seniors. There is no one above or below them. People are moving here because they want quality and they want a peaceful place to live. They don’t want to deal with maintenance. We feel like we are serving a wide group of people with this project.”

Park Place Holdings has even managed to sell an undeveloped corner of the property to the Boys & Girls Clubs of Fox Valley. Vanevenhoven describes this as a win for everyone: The Boys & Girls Club gets an ideal location for a community center that will serve the area while Park Place Holdings recovers a bit of the money that it invested in developing Marathon Flats.

“Marathon Flats represents more than just a redevelopment endeavor,” said Caleb Hayes, chief executive officer and founder of Park Place holdings, in a statement. “It’s about creating spaces that enhance the quality of life for residents and contribute positively to the fabric of our local communities.”