HOT TOPICS
Reconsider the Rehab
With over thirty years as a practicing architect and over twenty years as the owner of an architectural firm, I have weathered more than one recession. As we move through each economic cycle, I find the overall resilience of the real estate, architectural and construction business sector to be fascinating. As bleak as an economic cycle may be, there are properties that continue as valid, solid investments. Many of our clients have a portfolio of existing buildings that can be restored, renovated, or rehabilitated to fulfill objectives for new uses, for expansion and even for meeting criteria for "green" construction.
Although there is undoubtedly an attraction to undeveloped or cleared land, with its potential for new building development, the fact remains that we have a tremendous inventory of existing buildings that might initially appear unsuitable. In the past, old buildings were regularly demolished to make way for newly constructed facilities with arguments for their demise including their lack of flexibility, infrastructure issues and high costs for renovations.
With that said, why would a company ever want to reconsider renovation or rehabilitation of an existing property? The reality is that with fuel costs high and the dollar low on the international market, the costs of construction are volatile at best. A recent search for a company, manufacturing/R&D, involving a 160,000 square feet need resulted in a focus on existing buildings capable of renovation and refitting for the company. The cost differences of over $100 per square foot were a very strong draw for this client to consider over build-to-suit properties. For this client, lower cost considerations meant the difference between a build-to-suit and relocation into an existing building renovated for their needs.
Corporations with many properties in their portfolio will base decisions on their own needs and objectives, regardless of the state of the economy. Large companies might have an inventory of existing properties that are vacant for a number of reasons. PNC Realty Services had one vacant property that was adjacent to affiliate PFPC, Worldwide, Inc.'s world headquarters in a North Wilmington corporate campus. PNC took on the rehabilitation an old stone mansion built in 1936 by William duPont for his daughter Marion duPont Scott. Purchased by PNC in 1999, and generally underused, the facility had potential, but was deteriorating quickly. In 2007, the company had the need to develop an employee cafeteria for PFPC staff members at the suburban campus. With the design team from MGZA Architecture, the building was transformed through adaptive reuse, into a beautiful warm café for PFPC's employees. In this case, the existing building was the mechanism for enhancing good will with employees as well as local authorities who considered the old house "of historic interest," even though it was not protected with formal historic recognition. The company's interest in the building led to defining the property as a New Castle County "Historic Overlay District." The project has received commendations from the PFPC executives as well as staff members. Community history and the community of employees made the decision to renovate the old mansion into the PFPC "Bellevue Mansion Café."
Finally, an important reason to reconsider rehabilitation for an old building is the "green" movement. By working with existing buildings and sites that have already been developed, one can achieve credits in the LEED™ program established by the US Green Building Council. Credits for building re-use can be achieved in the Sustainable Site as well as the Materials and Resources categories for LEED™. Local, state and federal projects are mandating use of LEED™ on projects.
With early evaluation and clear objectives, an owner and consulting architect may find that reconsidering renovation, rehab or restoration of existing buildings could reap benefits that include cost savings, community good will and environmental sensitivity.
written by Mary Z. Severino
