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What is Adaptive Reuse?

Adaptive reuse describes the process of retrofitting an old site or building for a new purpose. In other words, it’s simply real estate recycling.

Adaptive reuse can breathe new life into buildings or sites that may have become disused or abandoned while conserving historic value, building resources, and meeting the needs of modern occupants.

There are many ways to implement an adaptive reuse project. For example, in the U.K., the Battersea Power Station is now home to the Tate Modern art gallery, after decades of lying abandoned on the South bank of the River Thames. In the Netherlands, a former sewage plant is now a multifunctional cultural center. In Boston and Brooklyn, neighborhoods once specifically designed for manufacturing, warehousing and docking in the maritime industry, now house office spaces, apartments and a Tesla sales and service center.

Adaptive reuse also brings many benefits to the commercial real estate industry and society at large. These include:

1. Sustainability and low environmental impact

A building that has gone through an adaptive reuse process is a much more environmentally sustainable option than an entirely new construction. Obvious benefits include the reduction of waste and reuse of materials.

The original building’s embodied energy, which represents the energy consumed by all of the processes associated with the production of a building, is also retained during an adaptive reuse project, but is lost if a building is demolished to make way for new construction.

The reuse of building materials usually saves approximately 95% of the embodied energy that would otherwise be wasted, according to figures from the Australian Greenhouse Office.

2. A strong economic incentive

While there is no definitive research on the market appeal of reused heritage buildings, there are anecdotal economic benefits, including:

  • Depending on the nuances of the development, the cost to renovate is substantially less than the cost to rebuild. The primary advantages here are usually the time saved when using an existing structure, the reuse of building materials and resources and resulting embodied energy savings. There are also no demolition costs, land acquisition is usually cheaper and the required utilities and services are usually in place.
  • Developers could benefit from tax incentives, such as the Federal Historic Tax Credit, which is either 10% or 20% based on a building’s age and location.
  • By preserving the authenticity and historical features of a building, rents and purchase prices often go up as the resulting construction is seen as more desirable to potential occupants.

3. A positive social impact

The renovation of an abandoned building or site has long-term benefits for the communities that value them and, increasingly, recognize the benefit to future generations from the protection of certain places and areas.

The reuse of buildings in established residential areas can also provide the community with new housing and commercial property opportunities. Research reveals adaptive reuse has helped to underpin many successful regeneration schemes.

4. Promoting innovation

Adaptive reuse also presents a genuine challenge to architects and developers to find innovative solutions during a retrofit. As a result, adaptive reuse buildings are producing some excellent examples of creative designs that retain heritage significance.

Are there any restrictions for adaptive reuse developments?

Developers must take great care, particularly with the adaptive reuse of historic buildings, to minimize the impact on the heritage of the site.

Different countries and states have different policies in place to ensure any adaptive project is a viable option and sympathetic to the building’s heritage values. For example, the U.S. Secretary of the Interior published “Standards for Rehabilitation,” with policies including:

  • Minimal changes to the defining characteristics of the building and its site and environment.
  • The retention and preservation of the property’s historic character.
  • Repairing deteriorated historic features, rather than replacing them.
  • Discouraging “façadism” – where the building is gutted and only the façade is retained.
  • Discouraging poor imitations of the original historic style – any new work should be recognizable as contemporary and clear records of change must be made.

The challenges

A range of factors may prevent some buildings from undergoing an adaptive reuse transformation. For example, some structures might have sat vacant and decaying for too long to be resurrected. Building codes are also a significant barrier, with safety and accessibility often curbing such renovation projects.

For example, electrical, plumbing and HVAC systems usually need to be replaced and this can be financially prohibitive for certain projects. There also may be high unanticipated environmental costs such as asbestos cleanup or mitigating soil contamination. Local zoning codes must also be researched to ensure that the intended use of the structure is permissible.

Is adaptive reuse right for you?

Many developers are now recognizing the growing importance of adaptive reuse projects from a both a socioeconomic and heritage perspective.

No two adaptive reuse renovations are the same. Unexpected problems and hidden costs are commonly associated with such projects, but early planning, careful evaluation and project contingencies can help mitigate these issues and help you establish the potential of a space before signing a lease or making a purchase.

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