Given the current state of the retail market, it's no surprise that adaptive reuse has become a prominent topic. With retail space outpacing demand in many areas, repurposing existing assets has emerged as a viable strategy. Converting retail properties to alternate uses is often quicker, more cost-effective, and more sustainable than new development. However, not all buildings are equally adaptable. A thorough property condition assessment (PCA) can help identify opportunities and obstacles related to repurposing a retail property and provide an estimate of associated costs.
PCAs for adaptive reuse differ from standard assessments in several key ways. While a typical PCA covers major building systems such as the building envelope, mechanical/electrical/plumbing (MEP), fire/life safety, structural, and paving, a PCA for adaptive reuse focuses on whether these systems can support the proposed new use. Unlike standard PCAs, which assume "like-for-like" replacements, adaptive reuse often requires changes to system sizing and configuration to fit the new purpose.
When assessing a site for adaptive reuse, engineers look for "fatal flaws" that could limit the project's viability. These flaws may include electrical systems unable to meet modern power demands, aged or faulty plumbing systems, inadequate slab support, or insufficient site water pressure for fire suppression systems.
In addition to identifying deficiencies in existing systems, consideration must be given to the demands of the proposed use. Customized evaluations, such as acoustic insulation reviews or sewer lateral surveys, can provide valuable insights for decision-making and budgeting. Here are three recent examples:
1. Arizona Fitness Center Conversion: Our firm enhanced a PCA with a review of acoustic insulation in a tenant space at an in-line shopping center in Arizona. The space was being converted to a fitness center, and concerns about sound transmission to adjacent spaces prompted our review. This allowed for an accurate budget for necessary acoustic upgrades.
2. Southern California Sewer Survey: During an acquisition survey in Southern California, we conducted a detailed sewer lateral survey to determine the configuration of waste piping. Unclear details and concerns about prior use prompted this survey. Based on our findings, the city approved the purchase and alterations of the retail building.
3. Northwest Indiana Office Building Conversion: We assessed the feasibility of ventilating a portion of a 110-year-old office building in Northwest Indiana to accommodate ground floor restaurant space. Although beyond standard PCA scope, close coordination with the client allowed for the determination of feasibility and budget figures for tenant improvement allowances.
While the PCA is a crucial piece of due diligence, it's just one part of the process. Developers should also consider zoning reports, market studies, ALTA surveys, environmental site assessments, and evaluations by specialists like historic architecture or accessibility experts. Each adaptive reuse project is unique, requiring careful consideration of existing building characteristics, proposed use requirements, and budget constraints. By collaborating with qualified consultants and being realistic about limitations, developers can maximize the success of their adaptive reuse projects.