DBRS, Inc. (DBRS) published the commentary entitled, “Repurposed Real Estate: How Adaptive Reuse Gives Old Properties New Purpose.”
Teaching an old building new tricks is a growing trend in the commercial real estate investment industry. Adaptive reuse is the process of finding an older building that once served a now-obsolete purpose and renovating it to take on new responsibilities. Real estate investors may be interested in adaptive reuse for its many advantages:
-- Tangible economic benefits, such as tax credits.
-- Renovating a building can be a much cheaper venture for companies than building a property from scratch.
-- Many historically preserved properties are located in densely populated cities and prominent neighborhoods, which can benefit companies.
-- These structures exhibit the character of other eras and create a more communal, urban space within the surrounding space, raising property appeal.
-- Historic buildings, especially industrial properties, can be much more spacious and allow for a lot of interior-space manipulation.
-- In light of new trade-war tariffs, renovation can help alleviate the costs of steel and aluminum required to construct brand-new properties.
Before deciding to retire buildings, investors should look more closely at assets – not what they are, but what they could be.
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