There’s a popular saying that says “sooner or later, everything old is new again.”
And that’s the motto when it comes to commercial redevelopment.
It can be a wonderful thing. This is why, as we discussed here, we’ve seen such a rise in redevelopment in recent years.
There’s a lot of interest in the real estate world about being sustainable and reusing existing facilities. Additionally, cities have become more favorable to adaptive reuse and redevelopment, as they reduce blight and revitalize value-diminishing properties.
But there are considerations abound. Whether a redevelopment is feasible really depends on the type and size.
As a tenant, it’s important to understand some critical elements that make or break a redevelopment project. Here are four of them.
What’s the superstructure?
It may seem obvious, but the first and foremost thing to consider is the health and makeup of the existing framework.
You’ll have to account for the wall structure, roof height, materials, potential environmental testing, etc. You may start redevelopment and find that you need to rebuild because the walls or structure aren’t safe. Or, you may determine that the cost to reinforce would be more than to completely rebuild, resulting in a decision that can completely alter the direction of your project.
For example, if you have to raise the roof on a redevelopment project, it might not make sense to keep the existing building. It’s likely cheaper to rebuild because a new structure presents a lot fewer challenges.
When was the building built?
The timeframe in which a building was built will likely determine many of the elements of the superstructure. For example, buildings in the ‘50s, ‘60s, and ‘70s typically have lower ceilings and rooflines. Today, those types of structures are considered economically “obsolete.”
Additionally, construction standards and building requirements have changed over time, resulting in older facilities no longer meeting updated codes, standards, load-limits, and more. Elements such as seismic codes, snow loads, and electrical systems have all changed in the last 20-40 years.
Furthermore, consider older materials like asbestos or lead-based paint, whose removal might need to be considered if any demolition or re-painting were to occur.
All of those areas can add complications to your project.
What are the local planning laws?
When it comes to redevelopment, a lot rides on your understanding and completion of the pre-application process. While many cities have created reuse programs or incentives to help promote redevelopment, local planning laws can still be very complicated and the approval process can be...well, challenging.
For example, your building may have been built in a right-of-way or has a grandfathered drive-thru. There are a lot of planning laws that can impact the feasibility of your redevelopment project.
So, it’s important to get contractors into the building early to assess the property and then address the city’s expectations. Discussions at an initial pre-application meeting with the city can shape the timeline and budgets early on to help you plan the appropriate course of action.
Do I have the right people for the job?
Redevelopment really comes down to having the right architect, the right contractors, and the right developer. You need someone with experience in addressing challenges as they come up — because they inevitably will.
Redevelopment is very different than a typical tenant improvement or even a ground-up development. Numerous factors affect the feasibility of property redevelopment, which may require considerable time, capital, and expertise depending on the condition and circumstances of the particular property.
Using an existing framework, conserving land, and potentially gaining favor through the municipal approval processes are all tremendous perks, if you can adequately manage the process.
When considering redevelopment, it’s important to remember these 4 factors and how they all play into your overall costs and project feasibility. Partnering with the right architect, contractor, and developer can be the difference between success and failure.