When does building conversion make sense?
August 11, 2022
Repurposing a building for a new use is popular for many developers. Designers talk about what it takes in two hot markets—Boston and Austin.
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This article first appeared as “Ask the experts: When does building conversion make sense?” in Stantec Design Quarterly, Issue 15.
When we see imbalance in the availability of building types, conversion of buildings to new uses attracts greater interest. A decade ago, we might have seen more warehouse and factory space repurposed for offices. Today, the excess supply of office buildings makes the idea of conversion to residential or mixed-use more attractive.
We’re using the term “building conversion” to refer to a complete or partial repurposing of an existing building to a use it didn’t have previously—turning a big box retailer into a training center or clinic, adapting an office building into mixed-use residential/coworking/retail, turning office buildings into lab spaces, etc.
We asked two experts to tell us about building conversion in their markets (Austin, Texas, and Boston, Massachusetts) and share what they see as the significant challenges and opportunities in adapting buildings from one use to another.
The Tennyson in Plano, Texas.
Where are the opportunities for building conversion in your market?
Julie Zitter: Here in Austin, land and properties of any kind are relished. Austin was the fastest-growing major metro in the country for nine straight years, from 2010 to 2019. Roughly 170 people move to Austin each day. A lot of this growth is being driven by the relocation of major companies to Austin, overall great business opportunities in the state of Texas, rich technology talent, temperate weather, and a vibrant music and culinary culture. All these attractions create a multiplier effect for local businesses.
Ginger Desmond: In the Boston market, pressure for laboratory space is intense. New ground-up building sites are becoming scarcer, so the conversion of existing buildings is becoming more appealing. Opportunities can be from a variety of places—anything from warehouse buildings to converted office towers in areas with a high concentration of existing labs.
How is this affecting your work?
Julie: As a result of the boom in Austin, we are increasingly asked to look into existing lots and determine the best use. This requires our urban planning team, which specializes in interpreting local entitlements and land usage, to help guide clients toward a course of action.
Our urban planning, architecture, and engineering teams work cohesively so that the building represented matches the usage determined. In some cases, the usage is dictated, in others, there is more flexibility so a developer can determine a development plan for their preferred proforma. It’s not just land that we study; we also study existing buildings and how they can be repositioned to meet the client’s expectations. We need to fully vet the building for usage, life safety, and parking requirements.
What uses are in demand? Where is there an oversupply of building types?
Julie: It’s industrial here in Austin. And lab space for all types of labs—biotech and life sciences, semiconductor, you name it!
Ginger: In Boston, the most plentiful opportunities are in labs and residential. Currently we have an oversupply of office space.
San Marcos Consolidated Independent School District in San Marcos, Texas.
What makes a building a good candidate for conversion?
Ginger: Good bones! For lab conversion, the criteria are high floor-to-floor spaces with a structural grid conducive to lab layouts, low building vibration, and adequate space to accommodate the required MEP systems and equipment, including both rooftop and shaft space.
Julie: Great location, large floor plates, and tall floor-to-ceiling heights especially on the ground floor make buildings attractive for reuse. Other pluses include an existing loading dock, ample parking, and robust existing infrastructure.
What makes a building especially desirable from an embodied carbon/reuse perspective?
Julie: With reused buildings, fewer materials need to be manufactured and shipped to the site so these projects have a smaller carbon footprint. The green story about reusing materials, giving new life to a building with a reduced carbon footprint versus new construction is a great story to tell. And we and our clients should be telling it loudly.
Ginger: Saving an existing building is always good for embodied carbon.
What are the biggest issues for an owner client who wants to convert existing portfolio to a new use?
Julie: I find that setting expectations upfront immediately is good practice. There will be some benefits for repurposing of materials/bones, but like any renovation, there are unknowns. I advise clients to keep a contingency fund to mitigate those unknowns.
Ginger: I tell clients to be aware of the building infrastructure (for labs) but also the capacity of the location to support the use, e.g., availability of incoming services to the building.
Great location, large floor plates, and tall floor-to-ceiling heights especially on the ground floor make buildings attractive for reuse.
What makes building conversion attractive for the owner and tenant? Is it about neighborhood context and amenities? Or more about the flexibility of the structure and systems?
Julie: Speed to market, offsetting new constructions costs, less is more, and the sustainable aspects are all attractive to the owner. With building reuse, it doesn’t have to be full LEED project for the client to highlight those proof points. Currently, the cost of construction is extremely volatile, along with lead times for certain building materials, so more clients see the benefits of repurposing some or all building components to offset the lead time and building material costs.
You’re also saving money by not buying new foundation, structural steel, roof, etc. The list of what you can reuse depends on the asset to be repurposed. The timetable is lessened since you are not depending on long lead time items such as steel, high deck studs, etc., with building conversion. I think neighborhood and amenities are added perks beyond the building and its site. But for most clients it’s more about flexibility of the structure and availability of systems.
Ginger: Speed to market—conversion is typically faster than ground-up construction for owners. Structural and systems flexibility is essential for lab tenants.
For a lab tenant, an existing building can provide an interesting space. The neighborhood context is important to some clients, especially access to transit. With lab conversions, we’re often charged with designing an internal neighborhood with collision zones, collaboration spaces, and cafes where colleagues can connect outside the lab.
Biologics Discovery Center Expansion Phase III in Redwood City, California.
What are the most expensive aspects of building conversion? What kind of surprises are possible?
Julie: Infrastructure; any utility upgrades, if applicable, any flat work site improvements. Potentially some level of remediation dependent on age of asset. With repurposing and renovation, the surprises come in the existing conditions. Sometimes you can’t see where the issues are until they are uncovered. Brokers/owners typically don’t keep great files/CADD drawings.
Can you share any examples of success in converting a building to a new use?
Julie: We took an old bike shop and converted it to a lighting showroom and office. The client halted the project when COVID hit, then sold the property. However, we did the entire design and documented it. Now the building has since been purchased and an engineering firm is going through same rehab process specific to their needs.
We are converting a school/warehouse building to admin offices for San Marcos Consolidated Independent School District. And we’re designing a house-to-company office conversion for Real International.
Ginger: With a client in California, we took a 100-year-old former warehouse and medical office and converted it to laboratory space for a start-up in the cultured meat industry.