One man’s trash is another’s… repurposed real estate? Developers are looking at properties through new lenses and repurposing existing structures, like converting an auto garage into a restaurant or a supermarket into retail space. In our experience, repurposing existing spaces can save costs, drive neighborhood redevelopment, and create income-producing properties from abandoned spaces.
Prime Repurposed Real Estate
Shopping centers are more likely to be distressed properties since more and more established brands are throwing in the towel. Take Toys’R’Us, which recently announced its closure after 80 years of business. And they’re not alone: HHGregg, Bebe, TheLimited, Macy’s, RadioShack and more have shuttered some or all locations, leaving blank holes in physical retail spaces.
Luckily, spaces can creatively–and sometimes very successfully– be adapted from their intended use. This is key when the brick-and-mortar location’s original market niche is over saturated or failing. According to Forbes, “Adaptive reuse can be a great way for developers to leverage extremely valuable but otherwise inaccessible plots of land. If a structure has been designated historically significant and therefore cannot be torn down, developers can get creative by repurposing these buildings into trendy, “hip” units that renters are willing to pay a premium for.”
Why Repurpose Real Estate
Demolishing and starting over might bust a budget compared to repurposing good bones. Many aging buildings have qualities that are worth saving if they can be successfully remodeled and reconfigured. We’ve seen restaurants going to auto garages, warehouses converted into trendy downtown lofts, and public libraries taking over big retail locations.
Successfully Adapting Commercial Real Estate
In order for a repurposed project to succeed, start with data. Developers need to know based on a study of the neighborhood’s demographics, trends, and comparable stores what would possibly be successful in the space. Really thinking outside the box may be the key for the project to work.
Check out these successfully adapted properties from across the nation:
- In Texas, a YMCA took over an empty big box store.
- An IBM office building turned into a private high school in Silicon Valley.
- An auto dealership became a grocery store in Michigan.
- Arcade Providence is a redeveloped struggling shopping mall that converted stores into micro units.
- A former Public Health Service Hospital in a national park is now an apartment property in San Francisco.
Additionally, Urban Land Institute talks about gathering different stakeholders including creditors in the local government, to sell the vision of the repurposed space. Adapting an existing property may take a change in zoning laws or upgrading building code. Estimating the cost of the project and its returns will be crucial to any developers looking to tackle a redevelopment opportunity.