Aging buildings don’t always need to be torn down. Adaptive reuse – where an existing building is repurposed for a use other than its original design – can net huge benefits for cost savings and the environment, and also play a part in preserving heritage as historical elements of a building can stay intact.
There’s no shortage of commercial buildings outliving their initial use. Giving a new lease of life to older buildings is likely to be a big part of the market in the future. As Saurabh Mahajan writes for Deloitte:
In the future, we could see increased vacancies across property types as existing buildings outlive their utility due to changing occupant preferences, higher costs, and availability of other, better options such as the state-of-the-art and environmentally friendly buildings. Given this scenario, adaptive reuse could effectively be a key factor in the future real estate ecosystem. Indeed, estimates suggest that new development in the next decade will likely be minimal, and 90 per cent of the development will likely be focused on renovation and adaptive reuse of existing buildings.
As parking lots and undeveloped locations offer the low-hanging fruit already snapped up by developers, the need for new spaces won’t dissipate any time soon.
“Perhaps the best example of this trend in the New York area is the borough-wide transformation of Brooklyn, which is still going strong. On Long Island, the growing demand for live-work-play lifestyles has triggered the transformation of an area long utilized for industrial, manufacturing and distribution into retail and multi-residential properties. These highly attractive projects have area-wide benefits to employees, residents and the entire community,” comments Ted Stratigos, Avison Young Principal and Managing Director of the firm’s Long Island office in a press release.
Tax credits available
Of course the building’s character has to fit with its new function, and issues such as heritage preservation, zoning bylaws and upgrading obsolete building systems are all factors that come into play. What may help tip the scales are under-the-radar tax credits. Per Building Design & Construction:
Often, designing and renovating a building can be easier than actually funding the project. What many clients and developers, including non-profit, for-profit, and government entities don’t realize is that they may be able to finance a substantial portion of the total project cost through relatively under-the-radar tax credits, one of which is a federal historic tax credit. Typically, people associate historic tax credits with designated landmarks or significant turn-of-the-century structures, but even a utilitarian 1960s warehouse could be eligible.
For an amazing set of examples of adaptive reuse projects in action, check out this list of 20 creative projects via Archdaily.