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Adaptive Reuse - A Great Opportunity for Healthcare Facilities

Updated: Mar 1

Do you know the basics of adaptive reuse? Adaptive reuse is the process of taking an existing building and repurposing it to serve a new function other than how it was originally intended to be used instead of knocking the building down and rebuilding new. A good example of this might be taking an old office building and upgrading it to be a medical or life science facility. Adaptive reuse takes many shapes and serves many purposes, including expanding healthcare services within the community.


There are specific factors that drive adaptive reuse. Here are six primary reasons why a healthcare facility might consider adaptive reuse for its project.


  • Cost Savings - Adaptive reuse projects can result in cost savings of up to 20% when you compare that to demolishing an existing structure to rebuilding new.


  • Speed to Market - Overall, adaptive reuse projects are considered faster to complete when compared to the time needed to build new from scratch.


  • Fewer Greenfield Opportunities- The increase in commercial development recently has created fewer undeveloped sites for new development, particularly when it comes to space-constrained urban areas.


  • Availability of Vacant Structures - In many densely developed suburb or urban areas, there are higher quantities of outdated facilities available for adaptive reuse. The process works to make the site a useful part of the community while offering financial benefits.


  • Economic Incentives - Areas looking to preserve landmarks or historical sites might be able to obtain grants, tax deductions, credits, and other incentives to help make their project more financially feasible.


  • Environmental Benefits - Debris from construction and demolition account for nearly half of all waste each and every year. Reusing rather than demolishing existing buildings reduces the number of resources required, putting less waste into our landfills and consuming less energy than demolishing a building.


Although there can be some challenges regarding adaptive reuse, the benefits outweigh the negatives. Here are a few challenges that can present themselves.


  • Data Collection and Reporting - The healthcare real estate industry doesn’t always have the best qualitative metrics for assessing the financial success of a reuse project. That is why using a reputable healthcare real estate broker is key.


  • Regulatory Hurdles - Some adaptive reuse projects require special approvals for planning and zoning. An experienced healthcare real estate broker can help to streamline the process, making the project less expensive and time-consuming, ultimately saving time and money.


  • Awareness and Acceptance - Although investors used to be resistant to adaptive reuse projects, this mindset has changed. Lenders are also more willing to offer loans for adaptive reuse projects than they were in the past.


Even though adaptive reuse is taking off as a growing trend, healthcare entities should still consider the following to determine whether adaptive reuse is a viable alternative to traditional development projects.



  • Existing Assets - Does the building have any vacant, currently unproductive assets such as a vacant medical facility that could be repurposed or renovated?


  • Location - Is the existing located in an urban area? You’ll have to determine whether the structure can be turned into an adaptive reuse project. Sometimes, these projects may not be viable in rural areas with unique housing needs.


  • Tax Credits - Are tax credits or other incentives available where the adaptive reuse project is located? Many developers can use these incentives to fund their projects. Missing out on monetary support can make the difference when repurposing an exiting facility.


If you have any questions or would like additional information about your healthcare real estate options, please contact us! We welcome the opportunity to discuss your current and future goals and needs.

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