September 16, 2016 / Area Development / Michael McCormick
Although there are some challenges to adaptive reuse and infill projects, they can help to develop creative office space in historic, vibrant metro areas, while boosting ROI and environmental sustainability, and catering to the local community and talent pool.
Amid the rising demand for commercial properties, promising higher profitability and returns,owners and developers of land sites and existing structures alike are increasingly turning to adaptive reuse and urban infill concepts in their effort to boost the efficiency, profitability, and overall market value of their assets. Undeveloped and underdeveloped land within densely built-up areas, as well as abandoned properties, is meeting stronger demands from investors and developers as yielding better ROIs compared to new construction outside of traditionally buoyant city districts.
In commercial property development, adaptive reuse and urban infill methods are becoming increasingly widespread, helping to meet the needs of regional submarket demands for office space while promoting a strong ROI on the investor/developer side. Creative offices in prime historic and downtown locations are currently very desirable for many companies due to transit convenience, considerations of company image and prestige, and aesthetics and atmosphere of city centers, catering to creative workforce aspirations. The challenges with adaptive reuse and infill office space development oftentimes involve creating a modern, sustainable, and upgraded facility that meets a broad range of needs for potential tenants. Adaptive reuse and infill redevelopment concepts offer a wide variety of economic and environmental benefits for urban communities, in addition to property investors and developers. Yet, although opening exciting new redevelopment opportunities, bringing dramatic positive changes into city planning and economic and environmental sustainability, adaptive reuse and urban infill projects might pose several challenges to an investor or developer. City planning and zoning regulations, potential historical significance of certain properties, the ever-changing regulations concerning the use of certain construction materials, safety regulations, and lingering project feasibility issues might cause delays and disruptions at various stages of project development.
In order to address all the implications of adaptive reuse and infill projects properly, while adequately assessing all the up- and downsides, an investor or developer might consider several key points.
The point of adaptive reuse is combining historical authenticity of the once-abandoned or underutilized property with modern-day commercial feasibility and innovative “new consumer” appeal, rooted in technology, entertainment, and lifestyle.
Challenges Facing Adaptive Reuse and Urban Infill Contractors
Depending on property size, type, location, local laws, regulations, and the environmental situation, developers might encounter a complex combination of challenges to the construction process.
The adaptive reuse and infill approaches are both highly cost-efficient strategies for “filling in the gaps” in densely built areas, such as historic city centers and adjacent districts. Reuse and infill projects are, however, subject to municipal regulations and concerns of the local community. There is a range of potential requirements that the developer might be facing when embarking on such projects.
First of all, the local municipality and community might demand that the project does not negatively impact the already existing adjacent structures, with likely considerations including such issues as lighting, overall appeal of the neighborhood’s architectural design, and fire safety regulations. Additional concerns might include access to transit, traffic, and project parking demands. Addressing the community needs, the developer might need to conduct thorough research of the location and nearby infrastructure to determine potential costs of the project.
There are also requirements that new infill or adaptive reuse projects comply with the historical authenticity of the community, and not affect any on-site or adjacent historic structure in any way. A comprehensive study on the neighborhood’s history and demographics might provide clues for architectural solutions. For example, few communities would appreciate a skyscraper of glass and concrete in the midst of their Mediterranean-style architectural composition.
Undeveloped land and underdeveloped land in such areas are, more often than not, “brownfields” that were potentially contaminated by industrial waste or hazardous materials decades ago, thus requiring land-recycling techniques to be employed before any development project could commence. “Brownfield” land use might require a potentially costly decontamination effort affecting project ROI and construction timelines; however, the process has its benefits, including ecosystem preservation and restoration, promoting sustainability practices.
Additionally, recent regulations might hinder the reuse of certain existing on-site structures. For instance, some older structures might contain lead, or be insufficiently quake-resistant, thus requiring seismic retrofitting.
Strategies to Successfully Convert Obsolete Structures into Thriving, Innovative Properties
Given that adaptive reuse and infill projects are often aimed at reducing development costs and are motivated by earning a healthy ROI, several considerations must be taken into account prior to the development process:
Capitalize on market trends: Historic manufacturing and warehousing facilities allow for adaptive redevelopment into trendy and in-demand creative office space with an industrial feel, posing significant interest to the creative workforce. The heritage, authenticity, and industrial aesthetic of such office space add market value to the property after the redevelopment is complete.
Look on the demand side: Any project converting old abandoned structures or developing “brownfields” must meet the local market-determined demand for office space.
Develop for a purpose: Adaptive reuse projects are more likely to succeed being not only environmentally friendly, but also economically feasible, bringing new jobs and services to the local economy, while minimizing the project’s carbon footprint. The urban living environment can be greatly improved by reusing vintage structures, especially in transportation hubs due to ease of access.
Achieve a long-term savings benefit from upgrades: Cost savings that accrue from reuse of an existing building can be used to invest in highly efficient and environmentally friendly HVAC systems, which can also create long-term savings in operating costs.
Keep the project timeline in mind: Unlike other new developments, reuse and infill projects often require a shorter amount of time to deliver new product to the market as developing property in current redevelopment zones or by reusing existing structures that require minimal entitlement work. As such, the overall construction timeline is also shortened, and project time efficiency is generally regarded as boosting ROI.
Finding the Right Balance
The point of adaptive reuse is combining historical authenticity of the once-abandoned or underutilized property with modern-day commercial feasibility and innovative “new consumer” appeal, rooted in technology, entertainment, and lifestyle. Redevelopment should reflect the lifestyle tendencies and identity of the local community and be distinguishable among the similar type of projects in the area by employing a coherent and holistic approach, appealing to the needs of the local business landscape.
For adaptive reuse and infill projects, developing creative office space in historic, vibrant metropolitan areas allows for higher ROI, boosts economic and environmental sustainability of the property, and caters to the local communities and talent pool.
The proposed redevelopment must not interfere with the historic legacy and aesthetics of the property. The replacement of obsolete and hazardous to contemporary standards construction materials, such as asbestos and lead, is deemed necessary ensuring enhanced ergonomics and safety. Notwithstanding increasing restoration costs, such measures would entail compliance with present-day health regulations, while echoing the original concept, thus catering to the local lifestyle and aesthetic eclecticism.
Case Study: The Element LA Creative Office Campus
When redeveloping the Element LA creative office campus in West Los Angeles from a post-WWII era manufacturing facility, originally built in 1949, into an innovative office campus, McCormick Construction focused on addressing every aspect of the adaptive reuse process and
the associated challenges. The comprehensive renovation project, requiring compliance with governmental regulation, community needs, and culturally motivated considerations, was completed in April 2015, with adjustments undertaken both on- and off-site.
Aside from having preserved the building’s original historic architecture, keeping the vibe of the triumphant post-WWII economic expansion and socio-cultural breakthroughs, McCormick Construction combined the vintage features with advanced technology on site. As with most adaptive reuse projects, the campus was not up to current code at the start of construction so each building had to be stripped down to its shell and all electrical systems had to be updated to meet the needs of a creative office environment. As the campus is located in the prime area of “Silicon Beach,” Los Angeles’ technology and media hub, with convenient access to transportation via LA Metro’s Expo line connecting Santa Monica to downtown Los Angeles, as well as the 10 and 405 freeways, the local aesthetics and lifestyle tendencies were taken into account. McCormick Construction updated the structure’s electrical systems, conducted a seismic retrofit, and converted the interiors from one mass facility to a multi-tenant space with open floor plans, thus achieving compliance with current regulations. Now, the property’s interior and exterior flexibility promotes creativity and cooperation with cozy courtyards and patios, retractable walls, and pop-out entryways, boosting the property’s appeal among young, educated, creative, and tech-savvy millennials. The now-renovated Element LA creative campus includes five buildings, occupying roughly 12 acres, totaling more than 300,000 square feet, and is LEED Gold certified.
For adaptive reuse and infill projects, developing creative office space in historic, vibrant metropolitan areas allows for higher ROI, boosts economic and environmental sustainability of the property, and caters to the local communities and talent pool. Attractive from the profitability viewpoint, adaptive reuse and infill concepts face only a handful of challenges to their successful implementation in commercial property development. Successful completion of reuse and infill projects dramatically changes the urban community landscape from the desolate waste of de-industrialization into the thriving information and technology hubs of the post-modern economy.