Re-purposing Commercial Buildings for Residential Use

 

Re-purposing Commercial Buildings for Residential Use

Robert S. Michaud, P.E.

9/22/20

In some parts of the country, residential inventory on the real estate market is low, and the availability of rental properties is also tight. Some owners of commercial property buildings are considering converting them to apartments, condominiums, or even single family homes. This solution won’t work for every commercial property, obviously, but if you have a building or buildings that you think might be able to be re-purposed, this may be the right time to take advantage of the current real estate market.

If you have made the decision to explore your options when it comes to re-purposing your buildings, you will likely need some assistance to determine whether or not such a conversion will be feasible. Some of the questions might include:

• Are there any zoning issues that might prevent the conversion?

• Will the building(s) structurally support the physical changes needed to be converted?

• What sort of code requirements are different for residential property compared to its current use and how much will this add to the conversion cost?

• Are there sufficient utilities and space (for parking, etc.) to support the desired conversion?

For the questions above, a qualified engineering consulting firm with expertise in these areas can provide you with the answers you need so that you can make the best decisions for your property.

In order to determine whether or not to proceed with any sort of conversion, you will need to gather all of the relevant information. This due diligence effort involves an evaluation of the market conditions, rental and residential property values in the area, availability of competing properties, and expected turn around times. These focus on the revenue side of the equation – what you might expect to earn from the conversion. On the expense side of the equation, you will need to estimate construction costs, the addition of any resources or building features that may not be currently available, the feasibility with respect to zoning ordinances and code requirements, etc. If the expected revenue and probability of a quick turn around in terms of rental or sales outweighs the costs associated with the conversion, it may very well be a good choice for your assets.

Michaud Engineering Inc. can assist in these areas and also work with real estate professionals to help determine whether these changes will deliver the returns you expect in those locations. Give us a call and we can start a discussion to determine whether this might be a good choice for you.

© Michaud Engineering Inc. 2020