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How Adaptive Reuse Can Double Your ROI in Commercial Real Estate

"Don't recreate the wheel." "Imitateingly innovative." Landlords love to copy each other but aren't afraid to recreate the wheel when figuring out how to maximize a building's potential and gain a competitive advantage. COVID shook the industry to the core. Office building owners were left with high vacancies, shrinking tenants, and questions surrounding the viability of the office building for the long term. They want faster, cheaper alternatives that acquire tenants without paying for new buildings. Who doesn't want to save time and money? One of the best ways to do this in commercial real estate is through adaptive reuse.

What is Adaptive Reuse?

Simply put, adaptive reuse is reusing older buildings for a newer purpose than they may have initially been intended for. This could be using an outdated office building for something else like apartments.

In other words, if you have a building but no place to put it, why make a building? Why not adopt an existing one to fit the nee needs of your customers? This is precisely what adaptive reuse does. It takes an existing space and modifies it to suit the needs of a new target customer.

Here are some examples of the types of areas that can shift into adaptive reuse projects:

  • Office
  • Retail 
  • Storage Areas
  • Warehouses
  • Industrial 
  • Apartments

What Are Examples of Adaptive Reuse?

There are two main types of adaptive reuse:


Retrofitting can be difficult because you must change an existing structure without damaging the building. A good example would be converting an empty factory into office space. In this case, the building was designed to produce goods, not house offices.


When redesigning a building, the structure and layout change to better suit the new user's needs. An example of redesigning a building would be changing the floor plan of large office space to accommodate smaller offices. Redesigns are easier than retrofits because the building is already designed to accommodate the proposed changes.


How Accurate Square Footage Numbers and Floor Plans can Assist in Adaptive Reuse Cases and Analysis 

Reusing a building saves time and money and reduces construction costs. Reusing a structure also helps the environment. Since the building is already constructed and ready to go, it eliminates the need to tear down and build a brand-new facility. This reduces waste produced during demolition and increases recycling process efficiency.

But what about the square footage numbers?

It's already known that rentable square footage within a building directly impacts a property's profitability. The more rentable square footage a building contains, the higher its income-producing potential will be. 

However, some factors affect how best to maximize the total square footage, such as the building's age, column spacing, core areas, floor plate sizes, full building size, location, and building quality.

The question for landlords is understanding what kind of adaptive reuse the building may be able to accommodate. Will this office building work for apartments? If so, how many apartments and at what sizes? Will this building work for life sciences? 

Half the battle is then understanding the measurements of the areas that the building is comprised of and then applying those measurements to the potential reuses.

Once you find a use that could stick, the goal is to increase the number of square feet of rentable areas within the given building. Getting there requires future floor plan layout and measurement calculations involving rentable factors through scenario analysis. This process produces building designs that maximize revenue potential, ensure you are meeting the target customer's demands, incorporate code requirements, and contain verifiable rentable square footage calculations that maximize all areas throughout the building.

You may convert specific building areas into usable space or want to completely renovate everything. In either case, you must consider the following questions:

  • How much of the existing building do I want to keep?
  • What areas of part of the existing building's interior does my target customer prefer?
  • How much renovation work is required to make the building suitable for a new user and be able to attract my target customer?
  • Can I afford the project with the selected reuse?

After answering these questions, calculate the square footage of each area within the building. Once done, compare the results to the largest square footage allowed by the zoning laws. After comparing, decide whether to proceed with the project or abandon it.

Possible Limitations of Adaptive Reuse

Although adaptive reuse has many benefits, there are some limitations. One limitation is that the project might require extensive modifications to the original base building design to maintain structural integrity. 

Another limitation is that the reuse may not fit well within the current zoning regulations. For instance, if the building is located in an area zoned for industrial uses, the reuse may require a change in zoning. 

Finally, the reuse may not be compatible with the surrounding buildings. For example, suppose a building is located next to a parking garage. In that case, the reuse should consider when designing the new facility.


The goal of adaptive reuse is to increase revenue potential while keeping costs low. It is a viable option for commercial real estate companies with existing assets. There has never been a better time to get creative.