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The Benefits of Adaptive Reuse

Updated: Mar 15

Have you noticed how shopping malls, retail locations, and industrial complexes are being turned into hospitals and healthcare facilities? In one instance, an FDA laboratory was transformed into a Class A medical office building. Adaptive reuse is all around us, especially in the healthcare sector.


What is Adaptive Reuse?

This is a term that describes the process of taking an existing structure and turning it into one with a new purpose. This can save quite a bit of time and money if done correctly. The building must be structurally sound to start and the property should also be economically viable. This term can apply to anything from an old office building that has been turned into a trendy eatery to a large factory, converted to a physical therapy facility.


Adaptive Reuse in Healthcare

Healthcare systems are truly benefiting from adaptive reuse. The growing patient base is causing the demand for more space. The ability to repurpose existing buildings not only saves time and money but it also allows health entities to serve a wider range of patients at a faster rate. Health systems are opening medical facilities outside of a centralized campus, resulting in the ability to serve patients in new locations closer to where they live. Many vacant shopping centers have found new life in the form of a healthcare facility utilizing adaptive reuse.


Medtail Facilities

Medtail facilities refer to former retail spaces that fulfill the needs of a medical practice. This practice serves the best interests of both retail landlords and their new medical tenants. Clinics and health systems can easily benefit from the build-in foot traffic that is associated with retail centers. These transformations from shopping centers to medical facilities are happening in a variety of ways. Places like imaging centers are taking over for strip and mega malls. The key is for these medical clinics to reformat a facility that already has the necessary basic structure for their needs. For example, a building with 10-foot ceilings may not accommodate practices with large medical equipment.


The Increase of Adaptive Reuse

Adaptive reuse helps business owners and investors avoid roadblocks associated with availability and demand for urban land. Urban living, lifestyle trends, and experience-driven consumerism have all coincided with the growing trend of adaptive reuse.


The Cost Benefit

The calculated costs for permits, labor, and materials are much cheaper when using adaptive reuse over new construction. In fact, it is usually about 15 - 20% cheaper. In addition, there may be other credits and tax breaks that qualify for an adaptive reuse project. Programs like the Federal Historic Tax Credit provides credits that reduce taxes instead of offering a tax deduction like depreciation. Things like the age of the building and its location relative to historic areas are all factors that go into these considerations.


Sustainability

Since these projects don’t require the same amounts of materials as new construction projects, they are sustainable. There are also lesser transportation costs and shipping needs for those locations. Less machinery is needed which means less energy used. Additionally, renovating an existing property preserves more land, removing the need to develop an entire space. When considering this, adaptive reuse is an environmentally friendly process.


Other Benefits

Adaptive reuse truly transforms a space for a community. Many of these projects restore elements of an existing structure, revealing its rich past. The newly renovated spaces bring more jobs and services available for people. Adaptive reuse is changing the landscape of commercial real estate and the medical real estate sector for the better. As more abandoned and dilapidated properties are revitalized, more businesses, communities, and healthcare facilities will see the benefits of adaptive reuse.

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