Another company heavily investing in multifamily developments in São Paulo's city center is Citas. The company has six projects underway in the area, with two having already entered operation in the first half of this year. One more project is expected to be completed by the end of the year, while the remaining two are scheduled for delivery in the second half of 2025.

“Citas has been contracted to retrofit three more buildings and is in active negotiations for seven additional properties, with others in the feasibility analysis stage. These three contracted buildings will add 270 new apartments to our portfolio, expected to start operating in 2025,” said Isadora Rebouças, CEO of Citas.

The company states that it has been delivering, on average, three retrofit projects per year focused on the multifamily segment. Additionally, the company is involved in the complete management of the assets, coordinating efforts related to leasing, occupancy, and the administration of residential buildings.

So far, all of the retrofit projects operated by Citas have aimed to convert commercial buildings into income-generating residential developments. However, the company mentions that, as part of its commitment to the requalification of the region, it may eventually coordinate a retrofit project for a different occupancy profile, such as developing units for sale or assets intended for cultural attractions.

The total investment by Citas, including acquisition and retrofit costs for the six projects it is leading, ranges between R$ 5,000 to R$ 6,000 per square meter of private area. 

For the requalification of the properties, Citas reports that the biggest changes made are to the electrical and plumbing systems of the buildings, which are completely replaced to meet the specific demands of their new use. Other systems that undergo adjustments include air conditioning, fire protection (Fire Department), and the Lightning Protection System (SPDA), also known as lightning rods.

"The downtown area is Citas' 'blue ocean.' In addition to the hundreds of available real estate opportunities, Citas has spent the past five years dedicating itself to deeply understanding its tenants' expectations, the particularities of the region, and the relevant legislation," concludes Isadora.

When consulted, another company in the Real Estate sector, Sequóia Properties, informed that it carried out the retrofit of an old hotel near the Mackenzie Presbyterian University, in Consolação. The project, named Hub 88, has 112 units spread over a 2,000-square-meter plot.

"The plan was to do the retrofit, lease it, and then seek an exit by selling to a strategic investor. The multifamily-focused development was a success, and we completed the cycle in 2021," commented Sequóia Properties' CEO, Joaquim Rocha Azevedo.

According to the executive, depending on the structural condition of the building to be retrofitted and the scope of the renovation, the savings in the retrofit process compared to constructing a brand-new building can reach 30% to 40%.

"However, it's always important to take into account the total production cost, which includes not only the construction work but also the cost of acquiring the property," he adds.