REAL Exclusive Magazine RGA Architects' William Henry PhD Dilapidated or Damaged Structures

Dilapidated or Damaged Structures – Rehab vs. Rebuild?

By William Henry PhD

As architects we are often asked by clients “should we fix up this old and/or damaged structure or just tear it down and build anew?” Since according to some prognosticators over 80% of the building projects in the next twenty years are slated to be renovations of existing structures this question is arising more often. This is particularly true when the building in question is near the so called ‘tipping point’. This term is akin to an automobile that is either so old or so damaged that it can be construed by the insurance adjuster as “totaled”.

However with buildings the issues are far more complex. The considerations can revolve around the following;

1) RECONSTRUCTION – The decision rests on estimating the construction cost to rehab the structure back to its former original state vs. to demolish the improvements and reconstruct back to the original state. This question is most often asked and debated in insurance settlement proceedings. The insured’s often wish to include modernization features and building officials will require that a ground up reconstruction will need to adhere to the current governing codes. However many insurance policies are under written to effectuate restoration and no more.

2) MODERNIZATION – This added component to a pure restoration could entail many unforeseen non discretionary features such as compliance to new life safety codes, American Disability Act ‘ADA” mandates, as well as new more discretionary components such as climate control, better moisture resistant construction, and more energy efficient building techniques. Market demands and industry standards may cause these latter cures to be non-discretionary.

3) CHANGE OF USE – The highest and best use of the property may have changed over the years. As an example a retail center once thought to be in a prime demographic market may have grown tired and the tenants fled to new shinier venues. Perhaps the more apropos use may be multifamily residential uses in lieu of retail uses. This could cause a retrofit of the retail improvements into say—residential apartments. In the alternative the retail center could be completely demolished and re-built into various forms of multifamily housing. This play would require a market and feasibility study.

These sometimes confusing and contradictory factors can cloud the definition of the problem and thereby the best short and long term solution. My suggestion is to conduct the following;

1) Hire a forensic expert to carefully document existing conditions by inspecting, collecting, and cataloging the findings.
Both older and damaged structures may contain latent defects which will influence the decision as to whether to tear down or build afresh. These defects could include toxic mold, pest infestation, dry rot, underground toxic wastes, environmental hazards, dysfunctional air conditioning and heating equipment, moisture penetration, expired warranties, code violations of many sorts, as well as other worsening conditions which will impact the ‘life cycle’ of the improvements.

2) Hire a design professional prior to relying on the building construction community to provide opinions and estimates.
With all due respect to professionals in the construction industry, I believe that experienced architects, who have acquired both the requisite comparable design and business experience, are better able to devise multiple planning and design scenarios which a construction estimator can then later price. Comparable experience should entail multiple projects in both ground up and renovation design. It should also include experience in different project land uses such as commercial, residential and perhaps health care and institutional uses. A deep diversified portfolio is useful in assessing the design professionals qualifications.

3) Conduct market feasibility studies to ensure that the highest and best use for the subject property has not changed.
Along with retaining objective market feasibility experts to assess the viability of suspected alternative uses it may be germane to obtain a new MAI appraisal of the property and improvements. Retaining both a feasibility study expert and an MAI appraiser may uncover non-apparent latent values to be tapped. We have discovered after over 30 years in business that some of our early work needs to be demolished and recast as perhaps a totally different project land use in order to mine the latent economic value.

4) Hire an objective estimator to tally all the above factors into a decision matrix that provides an ‘apples to apples’ cost comparison of each scenario to preserve or not to preserve.
After all the data is collected from the above sources, then and only then should the decision concerning restoration be addressed. Unfortunately many building owners are pushed into a ‘rush to judgment’ mindset by overly aggressive contractors seeking to create a new project. The above careful, thoughtful and objectively analytical approach will flush out decisions that are based upon pieces of information that serve the purposes of hidden agendas. Unhelpful agendas are not solely the province of the contracting community but may serve insurance adjusters seeking to minimize exposure to their insurance clients, architects attempting to create a large ground up project commission that will lead to a larger financial reward as well as other vendors and material men seeking a proprietary specification that leads to some other sole sourcing.

SUMMARY It is my considered opinion after designing and serving as the architect of record for over one thousand projects that actually were constructed (an average of over 30 per year for 35 years to be exact) that a building owner cannot have too much information concerning the above. Most mistakes are made when the decision is made too quickly. The good news is that with complete comprehensive information available after exhaustive due diligence a clear choice often emerges from the murky swamp of potential choices that is more obvious to objective third parties that have access to ALL of the findings.

^[1]William Henry PhD is the Principal in Charge of Reliable Group LLC a full service architectural and interior design firm that has served as the architect of record for over 1000 projects across the State of Florida (Registration number AA0003523). He has lectured and written widely on the above topic. His most recent publication is ‘Return of the Master Builder’ available on Amazon Kindle e Books. Henry contact information is whenry@rga-design.com; (813-226-2220 Ext204) or visit the company web site at www.rga-design .com ^[2] or www.buildingdoctorfl.com ^[3].

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