IFF’s Real Estate Solutions team works with a wide array of nonprofits that each have unique needs. For the next few months, we’ll be sitting down with Dominic LoGalbo, IFF’s Director of Consulting for Design and Construction, to answer a series of real estate-related questions we’ve gotten throughout the years from our nonprofit clients.
Q: Is getting a building for $1 a good thing?
Dominic: There’s a reason why the building is only worth a dollar, and it’s usually because no one else wants it.
If someone were to ask me, site unseen, ‘We’ve been offered a building for a dollar. Can you tell me about this building?’
I would say, ‘It’s vacant. It has suffered extensive damage somewhere, either from a caved-in roof or stripped out mechanical systems. It’s probably loaded with environmental hazards. And it probably needs to be completely gut renovated inside and out.’
If the shell is not good, the embodied cost savings that you hope to get when renovating just aren’t there.
Where it could be worth the effort is if it is in a great location for your organization and already zoned for your use. Sometimes, it’s harder to have a parcel that’s in better shape but needs to go through the rezoning process, which can be contentious.
There’s also a lot of embodied value in an existing building as it relates to zoning and building code requirements. If you needed to build that exact thing, new, it would have to be all up to current standards – which are at a much higher level than that existing building that has things grandfathered in.
But in dollar buildings, the building envelope has often been compromised. We’re talking about big-ticket items like the exterior walls, windows, and roof – things that usually tip the scales between building a new building or renovating an old building. If the shell is not good, the embodied cost savings that you hope to get when renovating just aren’t there.
Whatever compromise you’re making, it’s usually not worth it.
Tags: : Real Estate Solutions