Repurposing: The Current Commercial Real Estate Trend

The term repurposing as it relates to real estate is not new, but in recent times has become necessary as buildings built decades ago have become less functional. This may be due to design, demographics or in the case of retail, consumer buying habits. The good news for some of these older buildings subject to adaptive reuse is they are most likely in prime locations.

Next, add the Covid-19 pandemic and resulting shift in office occupancy to working remote. Also during this period, the need to house goods bought online needing to be shipped, stored and distributed made the industrial/storage sector explode. In this scenario, as an example of repurposing, many malls have converted retail “big-box” stores to distribution centers for companies fulfilling these online orders.

As we return to what is now the “new normal”, the need and desire to transform many property types to their highest and best use is creating opportunity for building owners and investors to take advantage. Higher rents and increased Net Operating Income make the decision to move forward fairly easy. On top of this, properties in Opportunity Zones are eligible for additional tax benefits.

But the conversion to another use has many obstacles requiring professional guidance. Issues including zoning, design, permitting process, loan availability, leasing and potential sale upon completion are a few of the major considerations. Segue Real Estate Advisors has the knowledge and Advisor/Partners to help make the decision to move forward and to fulfill the above-mentioned requirements.

If you or your Clients have questions about this opportunity, please contact us today.