Adaptive Reuse: What to Do with Vacant Commercial Property

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(Link to the article)

Overview

Adaptive reuse can be thought of as building recycling. Architecture is of incredible importance to the identity of many communities, and removing buildings can sometimes destroy the culture of a neighborhood. Further, trends shift, and office spaces can be converted to provide affordable housing, or warehouses can be made into indoor farms. This allows real estate investors to recapture value, however, it does not necessarily resolve problems with social equity or gentrification.

Key Takeaways

  • Adaptive reuse extends the value of a structure sustainably, and takes into account regional context 
  • Repurposing vacant spaces is not unprecedented within some of my areas of consideration.
  • This article is fairly investment-centered – another perspective not considered here is in social equity. In upcycling vacant buildings, there lies the risk of gentrification.

Excerpts

  • Most commercial properties will have a vacancy at one point or another
  • With regards to risk and insurance as well as the need to continue maintenance regardless of if there’s a tenant, it’s important to resurrect these properties as soon as possible.
  • Vacant properties are linked to higher crime rates (particularly arson) and declining property values.
  • Vacant properties also represent unique opportunities to reuse or refresh the structure, serving to revitalize the local neighborhood and reinstate your cash flow
  • “Adaptive Reuse” refers to the situation where you take an existing building and repurpose it for a different use, while maintaining as much of the original structure as possible
  • Studies suggest that over the next ten years, new development will decrease, and up to 90% of development will be in the form of renovation and adaptive reuse.
  • Reuse of vacant structures could also give a new lease on life to the neighborhood while supporting the local economy, and enable people to stay close to their workplaces – all the while helping preserve the social and cultural heritage of a region
  • Shopping malls are being repurposed into mixed-used developments  that feature multi-family living, hotels, gyms or yoga studies, co-working office spaces, retail and entertainment tenants, and sometimes even civic amenities such as libraries or post offices
  • The craft brewing business has exploded in recent years, growing to over 5,000 breweries in just the past two decades. Many times, these businesses find their new home by outfitting an existing warehouse
  • Distribution centers are perfect for vertical indoor vegetable farming. Further, it enables farmers to be close to their customers, allowing them to save big on logistics. 
  • For senior living, old schools are perfect. They already have small individual units, as well as predefined communal areas.
  • The demand for office space is on the decline (thanks in large part to the increase in co-working and instances of remote working), while the demand for multifamily living is on the rise.
  • Worldwide, cities are turning old industry or waste sites into beautiful public spaces