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Adaptive Reuse Isn't Always The More Environmentally Friendly Option, Sometimes It's Just Less Cumbersome

NEO & Associates' Edward Osuch, KCS West's John Schiller, Brixton Capital's Justin Long, HLW's Sejal Sonani, Hackman Capital's Brian Glodney and Parker Brown's John Parker.

Environmental benefits and cost efficiencies are often held up as big advantages to choosing to reuse a building instead of tearing it down and building a new ground-up project in its place. However, those advantages aren’t universal, experts say, and adaptive reuse can be a more expensive, less environmentally friendly option. 

“There is a strong ESG narrative and reality to adaptive reuse — making sure that infrastructure that was built, resources that were put in, carbon that was sunk into these buildings decades ago remains in place,” Hackman Capital Partners Senior Vice President of Development and Planning Brian Glodney said at Bisnow’s Southern California Repositioning and Adaptive Reuse event Tuesday.

The building and construction industry accounted for an estimated 39% of “energy and process-related carbon dioxide emissions” globally in 2018. As the push for reductions in carbon emissions within the industry becomes more commonplace, converting existing buildings into other uses is a way to help meet those demands primarily because it, at least in theory, requires fewer materials.

But other speakers at the event said that was not always the case for them. 

“In the last two redevelopment projects we did, the costs were higher and the waste was higher redeveloping an existing building” than it would have been to build a new building, Paragon Commercial Group principal Jim Dillavou said.

Those projects demolished much of the original buildings, which made it more expensive and generated more waste, but because the project was adaptive reuse, Dillavou said, it did not need new entitlements and it was able to move faster through the approvals process for the city, which is why the decision was made to pursue repurposing the buildings at all. Dillavou did not specify which city those projects were in.

“One of the main drivers of these adaptive reuse projects is that we don’t have to go through a CEQA, which is an environmental impact assessment,” HLW Los Angeles Managing Director Sejal Sonani said. 

Ervin Cohen & Jessup's Josh Loeb, Lowe's Joel Mayer, Shawmut Design and Construction's Vincent Spataro, Vivo Investment Group's Dan Norville, and Paragon Commercial Group's Jim Dillavou.

From a social responsibility standpoint, there is also a push to look to adaptive reuse to help the region solve its housing affordability crisis. On a county level, a recent study suggested that the region could add more than 70,000 housing units via property conversions. The city of Los Angeles is working on adopting an adaptive reuse ordinance that would apply across the city and allow more flexibility about which buildings could be reused. It’s likely that once that goes into effect, the city will see more of these kinds of projects. There is also a countywide push to look to adaptive reuse to help the region solve its housing affordability crisis.

Sonani and others noted that there is often less pushback from community members about adaptive reuse projects than there is about ground-up rebuilds, even in cases where there is a change of use of the property, like HLW’s creative office reboot of the former Westside Pavilion Macy’s store. The Westside Pavilion, now One Westside, was converted to creative office space for Google.

As with anything, there are disadvantages to repurposing existing buildings. Older buildings are often not the most energy efficient. There is always a need to add upgrades to the property to make sure it runs smoothly — the right insulation, lighting, mechanical systems — both in terms of operations and in terms of operational cost. One thing to consider is not to burden a future tenant with high energy costs, Sonani said. Each building is unique and has to be evaluated independently, and repurposing still requires materials, which are still much more expensive than they were pre-pandemic. Several panelists agreed they are not expecting these costs to decrease anytime soon. 

Sonani and Glodney were joined on the panel by Brixton Capital Vice President of Development Justin Long and KCS West Project Executive John Schiller. NEO & Associates President Edward Osuch was the moderator.