The reuse alternative: what’s the point?

Embracing adaptive reuse presents some ingenuity about building from scratch that is gaining demand. Bill Wilhelm of Construction Today points out the practice employed in multi-family entertainment venues, retail, office and large-scale entertainment venues. What exactly does this imply?

The basics

Without cutting corners, adaptive reuse breathes new life into an old site or building for use separate from its original intent. One popular asset class that has been successful with this goal is hotels. The rate at which a property can go to market is much faster paced in a reuse scenario, which means a few things:

• “Heads in bed faster”: There is an opportunity for revenue streams to offset construction costs sooner, pointing to a healthier balance sheet.

• Cost savings: Traditional construction from scratch has on average a 20% cost increase due to adaptive reuse. The initial investment is lower, allowing operators to achieve a comparable result with reduced financial backing.

• Protection of labor and materials: In his article, Wilhelm acknowledges that “labor and material costs change regularly. Sometimes it is revealing to look back at historical data from previous construction projects to see how much they increase or increase. the costs of certain materials will fall, depending on the moment. Reducing the construction schedule through adaptive reuse mitigates the risks associated with the ups and downs of the market that affect the costs of labor and materials. “

The challenges

No construction project is perfect. Adaptive reuse is certainly no exception. In the case of a building that requires on-site improvements per township / city code, there is often a considerable capital requirement that places the owner in a circumstance where it may make more sense to demo and rebuild from scratch. Every situation is different, however, there are countless structures in which this notion makes sense.

In unconventional locations or municipalities with a smaller population, there is a greater inclination for building from scratch. Adaptive reuse becomes a little more prevalent within the demand areas for the asset class and the scarcity of suitable properties nearby.

Depending on the factors that influence a project, there is a high probability that adaptive reuse has the potential to be an attractive option in saturated markets. As smart construction project managers value the engineer at every stage, adaptive reuse is recognized by many not only as an opportunity to save money, but also to cut valuable time from a schedule.

Referenced sources:

Construction Today Magazine, Volume 16, Number 3, Page 8, “Giving New Life”, Bill Wilhelm, 2018

About the Author:

JH Greene is a commercial general contractor and construction manager seeking flexible construction solutions whenever possible. Since 1974, we have been known for exceeding customer expectations. Learn more at http://www.jhgreene.com.