3 Hidden Costs Of Adaptive Reuse
A few activities to watch out for when re-purposing an old building.
Hey. Welcome to the next edition of Small-Scale Sunday from Brick + Mortar where small-scale developers get one actionable tip on acquisition, financing, design, construction, or operations.
Re-purposing building materials and structures (A.K.A. adaptive reuse) makes for two easy talking points:
Sustainability—fewer new materials means fewer embodied emissions
Cost avoidance—a penny saved is a penny earned
And that’s great. There’s real value in both of those.
But there are also added costs that come with adaptive reuse which are rarely discussed. Costs that can spiral out of control if not properly accounted for.
Take 501 Main—my 3-story apartment project constructed on top of the original 1-story building’s foundation.
Let’s explore three hidden costs I found directly tied to the decision to keep the existing foundation and floor system intact.
Cost #1: Structural reinforcement
This goes without saying but, for a project like this, you need a structural engineer. Expensive? God, yes. $20,000 for 501 Main. But non-negotiable.
An engineer will detail every spec you need to make your structure safe, including steps to reinforce the foundation.
Here are a few examples of what we had to do at 501 Main:
Half of the original foundation walls lacked footings or rebar. To account for this, we had to strengthen the design of the balcony piers and bulkhead (thicker concrete, higher PSI rating, more rebar)
We installed a new carrying beam across the basement. This required custom piers and a massive beam ($1,000 in lumber alone). See pic below
Custom hold downs around perimeter of foundation were needed to tie new building down to the foundation. This was a nightmare—it involved concrete drilling, onsite metal fabrication, and a tedious installation process (here’s a quick video)
Cost: $20-25k in material and labor.
Cost #2: Leveling and squaring
Once we had the building demolished, we found two issues:
The existing floor system was out of square by a few inches. This is worse than it sounds and you would not want to build up without fixing
The floor was out of level, meaning there were noticeable peaks and valleys throughout. You could place a ball on one corner of the floor and it would roll 40’ across the building
To rectify, we had to:
Strip off existing subfloor (I had initially hoped to build off of that)
Shim underneath joists to get rid of valleys
Strengthen or replace half the existing joists
Cut out and replace any rot (mostly rim joists)
Cost: We spent roughly three weeks on this. 3 guys, 3 weeks = $18k.
Cost #3: Modifications to existing design
Outside of structural work, there were several activities to prepare for the new building:
Cut a doorway into the concrete to allow for basement access via bulkhead instead of interior staircase
Cut new hole in concrete for new water line
Excavation to set exterior insulation around foundation
New ICF frost walls for bulkhead and small addition to building footprint
Cost: $10k.
So…
In total, salvaging the original foundation cost around $50,000.
The alternative would have been to scrap everything and start from scratch.
Meaning:
Added excavation and dumpster costs for demolition of foundation
Pouring a new foundation
I never priced this out but I’d guess it would be similar to what I paid to salvage: $50,000. Although much less complex and time-consuming.
So why did I do it?
It came down to simple deal economics.
I was fortunate to receive a $86,000 grant from the state. And one of the requirements is that the project be adaptive reuse.
So, if we had fully demolished the building, the project would not have qualified.
Grant funding was necessary to make the project work. The project was too costly to develop compared to what rents are attainable here.
Simply put, this grant allowed the development to move forward by closing the funding gap.
Next time, I may think twice before building on an old foundation. It certainly isn’t the easy path. And, from my experience, it likely doesn’t pencil without subsidy.
What has your experience been with adaptive reuse?
Until next week,
— Jonah 🧱
P.S. Want to connect? Find me on LinkedIn and my projects on Instagram.