An Introduction to Adaptive Re-use and Repositioning
Aging buildings have their charm, but most can no longer perform financially in today’s marketplace. The main tenet of adaptive re-use projects is revitalization of an existing space to enhance both the property’s performance and the satisfaction of visitors who make use of the building’s features. Owners must analyze various factors with this goal in mind to determine if an adaptive re-use process makes sense for their asset. The property will either be updated to maintain appeal and garner new interest, experience a complete renovation and market repositioning effort, or be demolished and completely redone.
The physical aspects of the property – its structure, utility delivery systems, level of technology — are important for stability and growth. A detailed and extensive market analysis should be conducted to study comparable properties and what they offer, as well as determine a sensible reopening date. Adaptive re-use projects must consider a new regulatory analysis, as new zoning and environmental requirements will need to be met with any new additions or functions of the property. Most important of all is a financial analysis that will help determine if the changes make sense in terms of necessary investment costs. The financial analysis can be helpful in determining if there is room for outside investment help.
Any existing tenancies will need to be evaluated. It is the owner’s decision if he or she would like to maintain the tenancies, buy them out, replace them, or find a new purpose for their occupancy. If an owner has an entirely new vision for a space, it is likely that an entire tenant clear out will need to occur.