LYNN — Two brothers are planning to transform the former Daily Item building into market-rate apartments and commercial space.
Construction is underway on the historic downtown building and tenants are expected to move into “Exchange St. Lofts” by July. The iconic flatiron structure has been vacant since 2015.
Hourmat Abdul Rauf and Hashmat Rauf, co-owners of Lynn-based BuildAR Group, plan to redevelop the five-story building into a mix of 31 market-rate apartments and seven ground-floor commercial units.
Rents for the one-bedroom units would range from $1,800 to $2,000 and the desired dynamic is that tenants would make use of the commercial space. Businesses, such as a gym, bar and convenience store, were chosen for that purpose, and the building is geared toward young professionals, Hourmat said.
“It’s a great time for Lynn real estate, and we strongly believe it’s a great investment,” said Hourmat. “There is high demand for this product and the location is very desirable. Just a one-minute walk to the commuter rail, a 20-minute train ride to Boston, this new vogue neighborhood offers ease of access to Boston for commuters.”
The Rauf brothers purchased the 35,000 square-foot building at 38 Exchange St. for $1.4 million last December from Be Developer Group, an Atlanta firm, according to property records, and are investing $5.6 million into renovations.
The building has not been demolished, but is undergoing a complete restoration, which includes a new roof and windows, a refinish of the 1900s original hardwood, and a restructuring of its interior layout. The work is geared toward “bringing life” to the 119-year-old building, Hourmat said.
Construction consists of a gut rehab of the entire building, but the Rauf brothers have had to work with the Massachusetts Historical Commission to preserve some of its historic features, Hourmat said.
The brothers are paying $2 million “out-of-pocket” for the renovations, Hashmat said, but had to secure financing for the remaining investment.
The financing is three-pronged, with loans coming from Newburyport Bank, MassDevelopment and Lynn Municipal Finance Corporation, according to James Cowdell, Economic Development & Industrial Corporation of Lynn (EDIC/Lynn) executive director.
“They are investing about $7 million into the building,” said Cowdell. “That building is key because it’s literally steps from the train stop and steps from the arts and cultural district. It’s been vacant for several years and it’s another major development for the city.”
The development plans are similar to what the brothers have done with other properties in Lynn, Revere, Chelsea and Everett, but on a larger scale. With their redevelopments, the Raufs like to have more modern aesthetics to their properties, which they say is aimed at attracting younger generations and couples.
The brothers are planning another mixed-use development in Lynn, which would include 25 residential and two commercial units, but declined to say what building was purchased until plans are finalized.
Built in 1900, 38 Exchange St. served as the paper’s headquarters until 2014. The building housed the newspaper’s printing production, executive suites, sales and operations.
