Interesting Ways to Reinvent an Old Commercial Building | alecsalameh.com
Bring it Back to Life – 6 Interesting Ways to Reinvent an Old Commercial Building
Since the pandemic forced many businesses to shift to remote operations rather than working out of commercial properties, there has been much speculation about the future of commercial real estate in a post-pandemic society.
According to Forbes, while companies have shifted their structure to accommodate many new technologies and processes, companies want to get back to working from physical locations again. That makes now the perfect opportunity to buy commercial property and transform it into a fully functional investment property.
As some industries begin to see rising demand for real estate such as the housing industry, others are still seeing declines like the hotel industry. The conflicting demand for real estate may not be such a bad thing, however, as the decline of one sector can improve the supply for the other. Check out these six interesting ways you can reinvent an old commercial building into a sustainable revenue stream.
Open Space Office Designs
If you are looking to create an office space consider transforming an old commercial building into an open space office area. Open-space offices have gained popularity in recent years due to their health and productivity benefits. These spaces can be converted from any commercial property such as warehouses, factories, old retailers, and even commercial kitchen spaces.
In addition, open space office designs allow you to provide a versatile space that can prove useful for any company. For example, an open space design might be attractive for a startup, a company that is looking to expand, or even a coworking space. This opens the space up for the possibility of both short-term and long-term leasing.
There has been an increasing demand in the industry for industrial commercial property for storage. This makes it an attractive option for investment. Old large retailer facilities can be easily emptied and converted into a warehousing facility that is conveniently located along trucking or other transportation routes.
Large retail stores often include multiple access points and loading docs. This type of conversion has become increasingly popular over the past 3 years due to economic changes brought on by the pandemic.
Because of the large square footage and open floor plan of large retailer locations, they are ideal for storage conversions. Similar to warehousing for the transportation and logistics industry, they can easily be transformed into self-storage facilities. These facilities provide an opportunity for an investor to gain low maintenance, residual income.
Self-storage facilities in Florida have an average start-up cost of $397,615 according to The Parham Group. In the current market, the investor could potentially sell at a later date for an $864,425 profit. In addition, Self-Storage has a high return on investment and a failure rate of only 8%.
Throughout the pandemic, there were many areas that experienced housing shortages which contributed to the increased investment in the multifamily living real estate sector. Because there is such high demand for housing, it is a great way to reuse old commercial buildings.
Some retail properties offer the ideal location, square footage, and floor plan for multi-family living conversions. This could be as small as a two or three-unit building converted from an old corner store to a multi-unit apartment complex reused by a large retailer.
Hotels are also uniquely set up to be easily converted into an apartment complex which means that there would be relatively minimal renovations to be done in comparison to other alternatives.
Vacant offices can also provide an ideal floor plan, electrical setup, and square footage for a multifamily living conversion. Many companies have converted to remote work capabilities or transitioned to smaller offices during the pandemic. While there is an increasing interest in returning to physical work locations, companies are still cautious which means that there is an abundance of commercial office buildings but limited multi-family living facilities.
Transform Hotels Into Healthcare Facilities
Another industry that struggled throughout the pandemic was the hotel industry which continues to have a poor recovery. This has resulted in vacant hotel properties. Because these buildings already have individual rooms with plumbing, electrical, and privacy, they are ideal for new healthcare providers. This can be anything from a small clinic taking over a local motel to a hospital or nursing home taking over a large, multilevel hotel.
Transform Retail Space Into Digital Kitchen Space
Large retail space can also be used for converting big-box retailer locations into culinary hubs in the “digital kitchen” industry. The excessive space allows companies to repurpose the building into commercial kitchen spaces that can house multiple restaurants while maintaining social distancing. The retailer location would also provide an ideal setup for the main purpose: a centralized delivery point.
Digital kitchens are defined by the Tacit Corporation as kitchens “that leverage technology, such as mobile order-ahead apps and websites, third-party delivery, or kiosks to work smarter, not harder. As Digital kitchens that utilize technology for their operations gain efficiencies, it allows them to focus stronger on the customer.”
Keep in mind that when you reinvent a commercial property, you may have to apply for zoning changes, however, this is not always the case. Contact a real estate professional to determine exactly what zoning is needed for your potential reuse project. Alec Salameh is a trusted Realtor with Coldwell Banker Realty, one of the world’s largest and most respected real estate companies in the world. With all the resources Coldwell Banker provides, he looks to deliver modern, trustworthy, and highly professional real estate services to his clients.