Repurposing buildings is often more budget-friendly and faster than ground-up construction, even when dealing with older structures that need upgrading By Eddie Chow / December 20, 2023
Real estate conversion is about more than just a change of scenery—it’s the product of strategic changes that maximize adaptability and subsequent value.
Consider adaptive reuse, converting an office space into a multi-family dwelling. This type of project demands a deep understanding of both commercial and residential intricacies. It’s important to consider many factors—ranging from building infrastructure to local market demand, zoning, and more. At Forbix, we understand that every project is unique and therefore requires a thorough analysis of the risks, cost, time, and return on investment.
Transforming existing structures can offer significant advantages for developers, depending on the specific project. Repurposing buildings is often more budget-friendly and faster than ground-up construction, even when dealing with older structures that need upgrading. For instance, converting smaller, prewar buildings with better natural light, higher ceilings, or operational windows will cost significantly less than demolishing and rebuilding from scratch. Many cities are supporting these types of projects and issuing entitlements faster than a ground-up project. Additional benefits may include tax incentives and community development grants.
Leveraging existing building conversions also aligns with modern sustainability goals. Conversions often use fewer materials than a completely new development, thus contributing to a smaller carbon footprint. Reusing concrete is a prime example of how conversions reduce CO2 emissions.
With the help of qualified partners, Forbix recently acquired a class-A office building in Los Angeles currently undergoing a conversion to multifamily, which will include 244 residential units totaling over 300,000 square feet. We recognized the potential of this office space, envisioned its transformation, and are currently converting it. This project also coincides with a large-scale community development initiative within walking distance that will significantly increase shopping, dining, and recreational options.
At Forbix, we’re always on the lookout for profitable conversion opportunities. We’ve honed our ability to navigate diverse asset classes, execute successful conversion projects, and embrace the sustainable future of real estate.
Eddie Chow is a tenured banking and lending professional whose experience includes C-level positions with some of the most prestigious banking institutions throughout the country as well as an examiner with the FDIC.
Article from CSQ