HOUSTON – (By Cynthia Lescalleet for Realty News Report) – While not every older building is ripe for repurposing, more of them appear to be getting a second look as developers and designers consider ways to tap into the unique presence such properties have in city markets small, medium and major.
Checking the boxes for their “authenticity,” sustainability, and “placemaking” attributes –trends well-established in development today – adaptive re-use represents a notable shift away from the new, glassy buildings that have dominated for decades, said a panel of developers and designers at an Urban Land Institute Houston’s leadership event on the topic. Seasoned by their completed Houston redevelopment projects (M-K-T, Heights Mercantile and Palace Lanes among them), the group shared challenges, successes — and pointers.
One takeaway: it helps to have people on the project team with experience handling this type of project. Another: having a dog-friendly work/play environment is a real win-win. (Low ceilings, not so much.)
Radom Capital’s principal Steve Radom summed up adaptive re-use rather poetically: “It’s the intersection of analytical and inspirational.”
Emphasis on the former, however.
Given the current market, the analytical side is getting a much closer look, said M2G Ventures’ Amy Castellanos, senior vice president, development.
When assessing a property for repurposing, what makes sense has become a moving target, she said. Location, curb appeal, structural integrity, floor plate particulars and whether the building has been “somewhat” maintained are just a starting point for adaptive re-use consideration.
A deep dive into a potential property’s condition report is particularly important, she said, as it can hint at the unforeseen conditions of actual redevelopment.
Toward that, don’t rely on a building’s original blueprints; get it scanned, said architect Maija Kreishman, principal, Michael Hsu Office of Architecture (MHOA).
ULI: Adaptive Reuse a Moving Target of Opportunity, Outcomes
Re-use projects require a balancing act between code compliance and creative solutions to keep a building’s character, Kreishman said. A good team can resolve the divide as well as mitigate the unexpected realities of tackling a property with a past.
So will a realistic contingency budget. Have one, she said, with emphasis.
Still, these projects are not for the faint of heart, Castellanos said. While they have allure and respond to the nostalgia that appears to have entered the zeitgeist, they do need to compete, especially in the office and industrial segments.
Hospitality and retail have been especially interested in these types of re-purposing projects, Kreishman said.
While office-to-residential projects are intriguing solutions toward reducing vacancy rates, it might be prudent to consider upgrading the existing use rather than converting it entirely, Castellanos said.
Parking and detention requirements are common challenges when redeveloping an existing property to current standards, said Matt Coscio of Harvey Builders.
So are costs and schedule. Be realistic with both, he said. The aesthetics of an adaptive re-use are part of their value, so make sure pricing accounts for what he dubbed “the pretty picture” and not just the line drawings.
With building materials and interest rates moving higher, investors are not entirely on board with all adaptive re-use, Radom said.
Smaller projects could be where this asset class will thrive, he said, particularly in cases where a team – including investors – has previously delivered a successful project.
Similarly, as adaptive re-use emerges and there are more players with experience, the practice will attract more of same, Castellanos said.
Still, these projects are not for the faint of heart, she said. While they have allure and respond to whatever nostalgia that appears to have entered the zeitgeist, they do need to compete, especially in the office and industrial segments. While markets with smaller downtowns might have some re-do opportunities, she believes in many cases “the density isn’t there yet.”
Hospitality and retail have been especially interested in re-purposing projects, Kreishman said.
While office-to-residential projects are intriguing solutions toward reducing vacancy rates, it might be prudent to consider upgrading the existing use rather than converting it, Castellanos said.
Panelists cited the need for incentives and public/private partnerships to bring about some of the more ambitious conversions to multi-family, for example.
Do a project right and people respond to it, Radom said.
So does the team behind the project, Kreishman said. “It is worth it. There’s nothing better than a before and after.”
Feb. 17, 2023 Realty News Report Copyright 2023
Photo CALpix Copyright 2023
Caption: Panelists at ULI’s Adaptive Re-Use Program represented the development and design sides of such projects. From left are: Matt Coscio of Harvey Builders, Maija Kreishman of Michael Hsu Office of Architecture, Amy Castellanos of M2G Ventures, Steve Radom of Radom Capital and moderator Michael Pittman II of Cushman & Wakefield. (CALpix) . Feb 16, 2023 ULI Houston Adaptive Re-use event.
THE RALPH BIVINS PROJECT PODCAST
LISTEN: THE RALPH BIVINS PROJECT podcast with David Schwarz of Transwestern
LISTEN: THE RALPH BIVINS PROJECT podcast with Cathy Treviño, chair of HAR
LISTEN: THE RALPH BIVINS PROJECT podcast with Rusty Tamlyn of JLL Capital Markets
File: Successfully Repurposing Older Properties