Why landlords are repurposing real estate

The creative repurposing of older, underutilised buildings has major environmental, social and economic benefits far more apparent to an investor base now than previously.

“It will always be more environmentally friendly to recycle existing buildings rather than demolishing them and building new ones,” says Rainey Shane, social sustainability director for JLL Americas. Shane, who founded and ran the adaptive reuse department in the Southeast Central region for North America for five years, says repurposing has come into its own as a strategy amid a bigger focus on environmental benefits and an increasing demand for housing as demand for offices declines.

The success of previous adaptive reuse projects has laid the foundations for financing and has also provided developers with the experience of what works best, she says. The pool of investor types is also much larger now.

“A capable developer base with the experience and the urgency of both a changing need for types of real estate use, and environmentally friendly solutions, is a winning combination for investors,” she says.

Historic preservation is particularly beneficial for older neighborhoods with well-maintained historic buildings. These areas have higher rates of small and minority business starts, affordable housing, and successful densification and walkability. That is a perfect recipe to capitalize on the rise of impact investing, she says.

“Investors are always looking for properties located in areas with a high potential for growth,” Shane says. “Despite the challenges, repurposing and repositioning projects are changing the face of our cities by revitalizing declining neighborhoods and creating new jobs and economic opportunities.”