Seeking asylum

DANVERS, Mass.

In real estate, not even spooky trumps location.

Across the nation, former state hospitals for the mentally ill — with dated names like “lunatic asylum” — are being converted into homes.

Even the ominous Danvers State Hospital, once described as “the scariest building in the world” and a favorite destination of ghost-hunting thrill-seekers, soon will be home to laptop-toting latte drinkers.

“There’s obviously a lot of notoriety associated with the site,” said Scott Dale, a vice president at AvalonBay Communities Inc., which is constructing 497 luxury apartments and condominiums there. “We think at the end of the day, that will be helpful.”

No units have gone on the market, but Mr. Dale expressed confidence that occupancy won’t be hurt by the property’s past, including a cemetery with some unmarked graves — one reminder of the sad history of treatment of the mentally ill.

The formula has been successful elsewhere.

Six hundred would-be buyers signed up for the first 60 homes built at the site of the former Dammasch State Hospital, a $500 million project in Wilsonville, Ore., 20 miles south of Portland, city officials said.

In Traverse City, Mich., developers of a former asylum overlooking Lake Michigan have down payments in hand from buyers looking for condos and a waiting list should those buyers bow out.

Rents at the 500-unit Octagon, the former New York City Lunatic Asylum on Manhattan’s Roosevelt Island, are 10 percent higher than expected, developer Bruce Becker said. Studio apartments in the $170 million development start at $1,700 a month.

“It certainly still has a slight mystery to it, but I wouldn’t say scary or haunted,” said Rebecca Shaw, who is moving with her boyfriend into a one-bedroom unit at the Octagon next month.

The asylum, built in 1841, later became a hospital, which closed in 1955. Trailblazing journalist Nellie Bly spent time undercover at the asylum and wrote in 1887 that it was a “human rat trap.”

Miss Shaw, who grew up on Roosevelt Island, recalled bicycling and roller-skating on the grounds.

“At that time it was weeds and bushes, overgrown plant life, which made it really cool,” the 30-year-old social worker said. “For kids, that was part of the appeal. It was scary and spooky. When you get older, you decipher what’s real and what isn’t.”

What’s real: parking space, short commute.

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