Planning a Commercial Property Renovation

Commercial building owners who are considering building renovations have many issues to meet before starting.

Reasons to Renovate

Commercial building owners want maximum returns on their investment in real estate. As the life of a property grows older, reasons to renovate include:

  • Equipment failure
  • Renovation of newly acquired property
  • Change in tenants
  • Updating
  • Energy Efficient Upgrade

Hire an Architect

The first step in deciding to renovate involves hiring an architect (who may or not be the project architect) or a commercial contractor to walk through the buildings planned for renovation and report on any building code violations, hazardous material remediation and if the planned project falls within existing zoning regulations.

Pre-project Initiation


Depending on the project size, the building owner with the help of an architect or experienced commercial contractor prepares a budget. The owner with his fiscal advisors reviews the renovation budget and the likely payoff. If the project is for replacing a roof or wiring that has reached its end stage or similar renovations, price is the main consideration, if the renovation is to improve a commercial property and attract new tenants there are different financial considerations. Energy efficiency projects usually offer a good return on investment – local utility companies often help budget the project and show the ROI. The ROI for renovations for new tenants also requires different calculations.

Energy efficiency retrofits help reduce the operating costs, especially in older buildings, also energy retrofits attract new tenants and give a commercial property a competitive edge.

Plans and Specifications

The architect in close consultation with contractors, engineers and other consultants prepares schematic plans for the project. During this phase, the architect guided by cost, scale, building deficiencies if any and permitting requirements.

Obstacles to Project Initiation

Sometimes a planned commercial renovation does not make financial sense. A building that needs extensive renovation work to come up to code may not justify a renovation.

Building Code Compliance

Owners holding properties for decades may find that in order to renovate, extensive rehabilitation of the property must occur as well. This often serves as a budget buster with the ROI being too far out to be practical.

Zoning Laws

Sometimes, a wanted renovation will put a commercial property in violation of zoning laws. While some zoning boards may issue a variance, others may refuse. Local authorities typically withhold building permits when there is not a needed zoning variance.

Hazardous Material Remediation

Removing asbestos or mold and mildew is a process a building owner must undertake when the hazard is identified. Remediation of extensive parts of a building is often costly. Accordingly, the remediation may take priority over the renovation and use a great deal of a budget.

For small to medium-sized commercial building renovation projects, an experienced commercial contractor can help with many of the steps needed in the decision-making process. Speak with your contractor before taking any steps as your contractor may alert you to issues that prevent your renovation from starting. By letting you know early in the planning process you project’s viability, he will help you avoid costs that you do not need.