A useful method to compare recycling and renovating versus ground-up development in adaptive reuse of buildings
Adaptive reuse is the process of reusing an existing building for a purpose different from its original purpose when built or designed. Its importance is multifaceted and can be beneficial for the different stakeholders involved (including those not directly involved with the utilization of the building). Ground-up building can be time-consuming, costly and resource-intensive while existing, underutilized properties sit vacant and unused, creating potential opportunities for adaptive reuse.
When implemented based on informed analysis and property selection, adaptively reused buildings can bring major economic, social and environmental benefits to a community.
“Bypassing the wasteful process of demolition and reconstruction alone sells the environmental benefits of adaptive reuse. Environmental benefits, combined with energy savings and the social advantage of recycling a valued heritage place make adaptive reuse of historic buildings an essential component of sustainable development”
- 2004 Australian Greenhouse Office Study of Adaptive Reuse (9)
However, adaptive reuse is not always less expensive than ground-up building. There are several factors to consider before concluding whether to implement adaptive reuse for a specific property. While it may seem that reusing and recycling an existing building is always the “right choice”, the decision making process can actually be more complicated.
Owners, investors and other stakeholders may encounter significant obstacles in the process of converting a building (e.g. regulatory approvals, zoning, etc.) and must evaluate the site-specific details of a property before making this determination. Although often viewed through the lens of historical or heritage-designated buildings, there are also significant opportunities in other types of non-historic existing properties (e.g. hotels, factories and mixed-use facilities).
Focusing on the high-level concepts of adaptive reuse, this article covers the key parameters to consider when comparing the reuse/recycle method versus rebuilding from the ground up.
Definitions
Recycle/reuse: making renovations or changes using existing materials/structures without demolishing the original framework. These terms will be used interchangeably in this article but have relatively the same meaning. (4)
Ground-up building: this is a method of construction where the entire building is demolished and built up from scratch, including rebuilding the structure where nothing existed prior. (4)
Infill development: development of vacant or underused real estate/land in largely developed urban areas. (3)
Methodology for comparison
How do we know when it is better to recycle/reuse or to completely demolish and build from the ground-up? The following comparison method can be used to address this question:
Consideration of potential social/environmental impact on surrounding community/land.
Evaluate the current state of the existing building against functional requirements and main structural components of the existing property versus what is functionally required for the future property.
Determine the time and cost it will take to reuse/recycle versus ground-up build to efficiently meet the demands/requirements of the new building.
While there are additional variables and tools to consider within each of these parameters, looking at these from a high level provides a useful method to start the process for a specific property.
Social and environmental impact
It is important to consider the context of the unique property itself and the potential impact reusing/recycling versus ground-up building may have on the local environment and the surrounding community. Researching the land, local community and nearby businesses is a suggested starting point to evaluate the social impact a given decision may have on the space. For example, if the existing building is historically significant, the local citizens may not appreciate any drastic changes but may allow slight recycling/renovations to be made to repurpose the space.
Further, an existing building has “embodied energy”, a term is defined as the “energy consumed by all of the processes associated with the production of a building, from the acquisition of natural resources to product delivery, including mining, manufacturing of materials and equipment, transport”. (9)
In one study, adaptive reuse was found to save approximately 95 percent of embodied energy that would have otherwise been wasted. (9) The retention of existing embodied energy in a building is one of the primary environmental benefits compared to ground up building. Additionally, new construction may often have higher embodied energy:
“New buildings have much higher embodied energy costs than buildings that are adaptively reused. In 2001, new building accounted for about 40 per cent of annual energy and raw materials consumption, 25 per cent of wood harvest, 16 per cent of fresh water supplies, 44 per cent of landfill, 45 per cent of carbon dioxide production and up to half of the total greenhouse emissions from industrialised countries.”
- 2004 Australian Greenhouse Office Study of Adaptive Reuse (9)
Besides the environmental benefits of adaptive reuse and infill properties, further positive externalities may result from the use of infill or adaptive reuse in the form of reduced traffic and pollution from buildings in proximity to urban centers or public transit, reduction in crime due to lower supply of vacant buildings in an area and establishing more of a local identity for a given neighborhood. (8) Additionally, ground-up developments often price out existing renters and can accelerate gentrification. (6)
Current state of existing building against future requirements
It is typical to find that reusing/recycling requires less time, money and ecological impact compared to demolishing and starting over; however, this depends on the requirements for the new building to be functional. Buildings vary dramatically in their compatibility for reuse and their structural elements make it more or less difficult to repurpose. Start by looking at the site-specific details of the property and what your functional needs are for the space and the property’s future purpose. These details are often readily available and publicly accessible.
What year was the building built? Does it have a historical designation status that prevents certain upgrades? Are there hazardous materials built into the building that must be remediated to do functional remodeling? These are all examples of questions to look into when making this type of unique evaluation.
Doing pre-construction analysis is critical to save costs and avoid expensive rework in the future. Seek expert judgement at this stage if possible (this is something Easie can help you with).
For example, an old hotel may have many pre-existing amenities and structural components needed for a functioning housing complex, making the utility of the existing building high. Whereas a building that was once a hospital may lack a number of amenities needed and have obsolete components for a housing complex, making the utility low in regards to the purpose of the new building.
Seek a property that functionally resembles your requirements as much as possible.
Time & cost
If you have not invested in the property yet, conduct a pro-forma analysis for both options as accurately as possible to determine which option makes more sense for the overall real estate investment. The present value of both options is one of the strongest indicators to use when making this determination.
That said, the practicality of both options can encounter unforeseen issues, delays and other hurdles (e.g. zoning difficulties in converting a property to a different use).
The following are examples of “quick and dirty” pro-forma tools for a real estate investment:
Source: The Economics of Adaptive Reuse of Old Buildings A Financial Feasibility Study & Analysis, 2007
Source: The Economics of Adaptive Reuse of Old Buildings A Financial Feasibility Study & Analysis, 2007
Using an existing hotel as an example, a hotel will likely have a large number of functional components necessary for a housing building such as individual rooms with full bathrooms, a gym, business center, pool and washer/dryer options; the cost and turnaround time to convert the building would be comparatively lower than ground-up building.
On the other hand, a building that was once used as an office would lack a number of the structural components needed to become a functional housing building (low-efficiency) and would likely require more time renovating/recycling rather than building from the ground up.
Zoning changes can particularly be a major regulatory obstacle that can take significant time for the adaptive reuse of a property. A zoning provision for a given locality dictates the use, size, height, density, parking ratios and location of buildings on properties. (8) Further, the turnaround time can vary significantly and it may take meetings with city officials, pre-submittal requirements and additional specific requirements for a given property to make a zoning change. (8)
Case study: Vivo Living
Headquartered in Torrance, California, Vivo Living was founded in 2020 to offer flexible, luxury micro-apartments with all the best parts of hotel living included. The firm specializes in converting low-demand hotels to boutique apartment complexes at affordable pricing to renters while reducing traffic, waste and sprawl. Vivo is a response to rapid gentrification crowding out our younger population and exacerbating income inequality across the country.
“We are reusing buildings versus building ground-up. Adaptive reuse is the most environmentally friendly way of developing. We are basically a building recycling company”.
-Dan Norville, CEO of Vivo Living
Vivo aims to reduce traffic, waste and sprawl by carefully selecting each location to be in close proximity to shopping, markets, entertainment and other necessities. Vivo also uses green initiatives, sustainable systems and a triple bottom line philosophy to further minimize its environmental footprint.
“Renters are seeing regular increases in housing prices and increased demand in virtually every city in the United States. Hotels with low demand also exist in oversupply in most major cities in the United States. Vivo is a response to rapid gentrification crowding out our younger population and exacerbating income inequality across the country.”
Guided by its unique mission, the Vivo team creates unique and boutique living experiences out of an otherwise oversupplied and pre-existing structure.
Problem
Renters are seeing regular increases in the price of housing through gentrification and increased demand in virtually every urban center in the United States.
Built-out hotels with low demand exist in oversupply in most major cities in the United States.
Traffic and sprawl accumulates more rapidly when renters drive or travel to other parts of urban areas for recreation, entertainment and other amenities. Communities are generally decentralized and sporadic.
Vivo solution
Convert low-demand hotels to micro-apartment complexes that are pre-furnished and retain some unique hotel amenities (pool, F&B, lounge areas, gym, etc.).
Offer affordable pricing to renters in the low to mid price point range while still retaining amenities only found in Class A projects.
Reduce traffic, waste and sprawl from less driving to bars, events and gyms. Use green initiatives and sustainable items to minimize environmental footprint further.
How Vivo benefits communities
Reducing the supply of local vacant hotels, stimulating the surrounding social economy and reducing the overall carbon footprint by means of adaptive reuse, Vivo Living is an notable example of when recycling an existing building is the logical choice from the standpoint of time, cost and ecological impact.
Each property has unique requirements
In this article, we noted Vivo as an example where adaptive reuse makes sense. However, this may not be the solution for all properties. The determination of whether to do adaptive reuse or ground-up building depends completely on an existing property’s unique structural/amenity components compared to that of the future state requirements and functional needs.
Easie can help you evaluate your unique property
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Citations
https://authenticff.com/journal/repurposing-historic-gems-why-adaptive-reuse-matters
http://comptonllc.com/a-guide-into-adaptive-reuse-construction/
https://www.proformaco.com/differences-ground-construction-renovation/
https://www.the-possible.com/how-to-design-completely-recyclable-building/
This article was co-authored by Arianna Medicina and Rock W. Vitale.
This article was edited by James Lee and Rock W. Vitale.