26 July Adaptive Reuse: Giving Old Buildings New Life July 26, 2023 By sma Commercial Real Estate News, Property Investment apartment, building renovation, business tips, multi-family property, office space, real estate trends, restaurant, save money 0 ADAPTIVE REUSE: GIVING OLD BUILDINGS NEW LIFE July 26, 2023 | Property Investment, Commercial Real Estate News | real estate trends, business-tips, save money, building renovation, office space, restaurant, multi-family property, apartment Adaptive reuse is on the rise in commercial real estate as somewhat radical shifts continue to reverberate throughout various CRE subsectors. With the mercurial nature of office and retail space utilization, finding creative ways to repurpose properties without starting from scratch is certainly in the air. This is where “adaptive reuse” comes into play. Do you own a warehouse that’s become an underused capital sink? Restore and renovate the property so that you can reopen it as trendy luxury apartments! Defunct businesses like switchboard operator buildings sitting empty? Rather than tearing it down, reopen it as a unique coffee shop or restaurant. Adaptive reuse is all about creativity and innovation while preserving the interesting historic buildings that can bring a neighborhood or a city its unique character. There are many ways for CRE investors to utilize an adaptive reuse mindset in today’s volatile market, and the benefits of this strategy just might have a considerable impact on their ROI. Common Applications for Adaptive Reuse Today The first form of adaptive reuse that we’re seeing pop up over and over recently is the multi-family conversion. Office buildings have continued to struggle filling up post-pandemic, and features like high ceilings, which are somewhat common in offices, are highly sought after in multi-family properties. The thought is that while it’s hard to say when some companies will decide to move back into offices in full force, multi-family properties are a more consistent need that is far less likely to hit a similar lull in the near future. Other types of properties that are looking to apartment conversions as a new lease on life include hotels, old warehouses, and even movie theaters. Per CRE analysts at Rent Cafe, major cities like Los Angeles, New York, and Chicago are leading the way in new adaptive reuse apartments, and though the initial 2019/2020 surge wasn’t ultimately sustained, these conversions remain prevalent. Another utilization of adaptive reuse is seen in restaurant and coffee shop conversions. These span the gamut of commercial real estate with everything from old post offices to banks to former railway corridors being transformed into trendy eateries. These atypical locations can become a hotspot quickly, drawing attention from a young clientele in an area that was previously defunct. But the uniqueness factor that these businesses gain isn’t the only reason why business owners look at adaptive reuse for their ventures. Advantages of an Adaptive Reuse Strategy As mentioned, one great benefit of an adaptive reuse strategy is the ability to create a desirable, unique experience for customers. We discussed previously how millennials and Gen Zers are placing increased value on unique experiences, and their ability to share their experiences over social media offers a new avenue of “free” advertising that is incredibly desirable for business owners. Making a splash online can be tough for property owners who don’t have a comfort or knowledge in marketing, so inherent advantages like these shouldn’t be overlooked. Beyond these locations being an aesthetic draw, the reuse of existing buildings requires fewer materials and produces less waste in comparison to full teardowns and reconstruction (when the circumstances are right). With sustainability in mind, adaptive reuse might be the best way to reduce pollution and update neglected properties. Finally, retrofitting properties for new purposes through adaptive reuse strategies can help communities revitalize themselves while holding onto their history. Older buildings require demolition if they fall into disuse and disrepair, but with a little investment, historical locations can have a new life and serve a new purpose for a new generation. There’s something about bringing the old and neglected back to life that helps communities come together and invites more local participation. A strong sense of community is vital for small business success. Investors who are looking to diversify their portfolio may benefit from looking at local historical or vacant properties in need of a little love. Not only could it be a shockingly strong performer, these properties can become catalysts that renew an entire community. Inspectors from NPI have the expertise and versatility to perform thorough inspections for commercial properties across all sectors - multi-family, office, industrial, retail, hospitality, mixed use, and special purpose facilities. Contact your local NPI inspector, or speak with our National Accounts department to see how we can fulfill your needs! Comments are closed.