Understanding Adaptive Reuse

February 10, 2015

When commercial real estate is repurposed, it’s referred to as Adaptive Reuse.  Simply stated, adaptive reuse is the process of using a building or facility for something other than what it was originally designed or built for, changing the building’s function to accommodate the needs of the users.  Typically preserving and repurposing buildings has been limited to those structures with historic significance, but in recent years, the value of renovating buildings with less historic significance has come to the forefront.  It is a practical solution to both economic and sustainable building demands.  Adaptive Reuse is one of the most sustainable green strategies being implemented in the industry today. Because it can take decades for newly built green buildings to pay back the carbon debt of its construction, repurposing older buildings usually has less environmental impact.


In addition to its sustainability, it effectively lowers costs by reducing the energy required to create new spaces, and eliminating much of the material waste that comes from the demolition of the older sites and the acquisition of new materials needed for rebuilding.  Developers can also take advantage of both State and Federal tax credits associated with adaptive reuse, thereby diminishing their renovation costs.  The Historic Renovation Tax Credit offers a credit of 20% of cost to property owners who renovate their historic buildings using historic renovation guidelines and a 10% credit is given to those owners whose buildings are non-historic but more than 50 years old.


Another advantage of adaptive reuse is site location.  Though it is effective in rural, urban, and suburban areas, there is an increased demand across the country for rehabilitation and development of urban areas and re-energized downtown locales.  Adaptive reuse can also remove blighted buildings from communities helping to reduce crime in those areas.  The process also helps to preserve a community’s resources and protect its sense of place.


However, as beneficial as adaptive reuse is, there are challenges that call for careful research and planning.  The condition of the building must be assessed and evaluated for what can be preserved or reused.  Mitigating costs such as those associated with addressing change in climate conditions with the addition of new HVAC on historic materials or integrating preservation with modern code requirements must be considered.


Though lower in initial cost, adaptive reuse projects require more labor, therefore providing more benefit to the local labor force than a new build.  The wages paid cycle back through the local economy in the form of food, entertainment, and retail purchases, thus helping to boost the local economy.

Adaptive reuse adds challenges to an already complex set of issues associated with real estate development.  However, the benefits to the economy, local communities, historic preservation, and the environment, suggests that adaptive reuse merits consideration. 




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