Every town, big or small, has its collection of vacant and dilapidated buildings; those burnt-out structures with graffiti, broken windows, and perhaps some unwelcome and hopefully “temporary” house guests. These properties often sit in disrepair for years and remain an eyesore for both residents and community officials until a curious investor or real estate developer buys them up in pursuit of a business endeavor. Interestingly, these are some of the most unique and cavernous spaces which provide a host of creative and spatial opportunities. It's not surprising that this trend is drawing in a new batch of entrepreneurs and developers.
The driving force behind these pursuits may vary, but a growing trend towards the adaptive re-use of older commercial structures, warehouses, and industrial spaces remains. Many of these buildings may have held some local or historical significance and are now being converted into restaurants, breweries, event centers, and even residential living spaces. This is an obvious benefit to the local communities at large, but it is the investors and developers that are lining up for these lucrative opportunities. Those with a keen eye for real estate continue to seek out or simply “discover” some of these prospective opportunities as they peruse the local listings. And, while it's certainly in the best interest of local communities and city administrators to see the facelift of these properties, what does it truly take for these decaying structures and historical buildings to be reclaimed, re-purposed, and brought up to functional standards?
We have broken the process into three distinct categories to help understand and manage the most critical phases of the project and determine its feasibility. Following this simple guide can help in deciding whether a potential project is worth pursuing and what the major risks, challenges, and setbacks might be.
Evaluating Existing Conditions
Most older buildings have seen a long list of general repairs and modifications throughout the years. It’s also likely that there is some neglect and damage that will need addressing. Changes to the original building structure and floorplan may have occurred several times over as well, causing undocumented architectural and mechanical changes that are only discovered after any demolition has begun. In any case, an in-depth investigation should be performed by an architect, engineer, and qualified contractor(s) to determine the current status and functionality of the building. Some questions may be, “When was it last occupied? Does it have functioning utilities? Is it a safe space or is it in need of significant structural repairs?” This evaluation should also consist of any new code requirements that will need to be met in order to bring the space up to current building codes. Modern building codes consist of a variety of structural, mechanical, and accessibility requirements in order to meet current usage demands depending on how the space will be used. Some of the categories that are important to this initial evaluation are as follows:
Accessibility and restroom requirements
Electrical service and lighting needs
Total occupancy load
Ventilation and conditioning of the space
Overall structural integrity and roofing
Parking needs
Planning - Design/Budget
Once the initial evaluation has been completed, and the required improvements have been established, the next step is to design the new space. Taking into consideration any new code requirements, owners and designers will need to determine how to incorporate these new demands along with the basic needs of whatever business type is planning to occupy the space. This can consist of several iterations of spatial planning, mechanical coordination, and several site visits in order to make the new changes work within the existing building shell. The goal of the new design should be to balance the updated code requirements with the practical improvements needed to make the new layout function for its intended purpose. A well-executed project will bring the building to a point of functional occupancy as well as aesthetic pleasure that will be welcoming to the new target clientele. Here are some considerations for owners and designers to consider during this stage.
Code requirements (Sprinkler systems, Upgraded Electrical Services, Major Structural or Mechanical improvements, Egress, Fire-rated partitions)
What is the budget for the project? Are there design and construction contingency funds?
Practicality vs. Perfection (You can’t fix everything! Choose wisely)
What improvements will offer the most ROI or impact for the intended use?
Opportunity Grants, Tax credits, and other sustainability initiatives
Execution - The Construction Process
Choosing the right team of contractors for any job is crucial. When it comes to adaptive re-use it is important to work with contractors that have a proven track record working in these types of buildings. It is also important to consider the project type when selecting contractors to perform the required scopes of work. For example, some contractors are especially qualified for restaurant work while others may specialize in residential or multi-family housing. Exploring contractor qualifications can go a long way in helping to fit the right contractors to the job. Additionally, having the best contractor(s) will ensure that when problems arise, they are equipped to assess and handle the issues.
One of the most common occurrences to happen on adaptive re-use projects is the discovery of unfavorable existing conditions. The term “existing conditions” is used to identify those things easily discoverable upon the initial investigation. However, it also consists of those items that existed prior to the commencement of the project, but that was only discovered after the project has begun (e.g., hidden conditions concealed behind walls). This can present budget challenges to a project that is already pushing its financial constraints. Hence, entering the project with some budget contingencies is imperative should the contractors discover something unexpected. Having the right project team and contractors is extremely important in the discovery, communication, and mitigation of these findings in real-time. In such cases, a well-trained project manager and the team will assess the findings and quickly form a plan to address the new issues. This often requires deeper levels of engineering and code analysis with design professionals working together to find solutions.
Conditions of this sort may consist of finding excessive structural damage from a roof leak that was only discovered after demolition began. Or perhaps existing mechanical equipment like a boiler or furnace is found to be defective or not performing properly. For owners and developers, it is crucial to have real-time feedback on these issues so that the proper financial decisions or changes can be made quickly to keep the project on track. In the end, a highly functioning project team will offer routine feedback on progress and should be able to highlight problems and solutions that are best in keeping with the goals of the project.
At SHFYT Collective we have curated an extensive team of experienced design and engineering professionals that we bring to each project. We understand what it takes to make profitable and sustainable real estate changes. We look forward to answering your questions and helping you with your next project.