Empty Commercial Properties Are Value-Added Opportunities
GLR, Inc. specializes in ground-up commercial construction but we’re also very active in renovating and repurposing second-generation spaces. So, what exactly is a second-gen space? A second-gen space is an already constructed building that had been previously occupied but is now vacated, so a certain level of construction and build out has already been completed. We recently completed a couple At Home retail stores that were complete second-gen renovations (click here to read more).
There are advantages and disadvantages for every construction project. Building from the ground-up has certain advantages by starting with a “blank canvas” which may include starting with an ideal, untouched location, building in with a preferred construction style, or finishing the space exactly how you want. The most obvious disadvantage would be the cost for either a premium location or the supplies and labor to build in the necessary infrastructure such as excavating, grading, underground utilities, construction, HVAC, plumbing, and electrical.
With a second-generation space, the primary advantage would be a lower cost of entry. Constructing a space that positively reflects your brand isn’t cheap, but when you invest in a second-generation structure, the bones of your commercial building are already in place so those infrastructure costs such as the excavation, grading, underground utilities, and construction have already been completed and paid for. Avoiding the overall ground-up build can save business owners thousands in up-front costs especially with land prices and construction labor costs continuing to rise. In some cases, the HVAC, mechanical, plumbing, and electrical systems are already in place and still in good working order. These are all cost saving advantages that can make the turnaround of the construction project much quicker. The biggest disadvantage of a second-generation space is that it is an existing building and you may need to compromise some of your ideal build requirements to make the retail space work.
Right now there is far more developed retail space available compared to undeveloped land and the decision to renovate an existing structure has the potential to make an an easy move into a popular market. Investing in a second-generation space is efficient and typically faces less delays, with the bulk of the timeline dedicated to bringing the location up to code and designing it with your brand in mind.