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Mall property redevelopments could result in dramatic property value drops

Adaptive Reuse

Mall property redevelopments could result in dramatic property value drops

Retail conversions to fulfillment centers, apartments, schools, or medical offices could cut values 60% to 90%.


By PETER FABRIS, CONTRIBUTING EDITOR | October 26, 2020
Mall property redevelopments could result in dramatic property value drops

Photo courtesy Pixabay

   

The COVID-19 pandemic has dealt a serious blow to many shopping malls, as customers turn to online retailers.

Owners may look to redevelopment if these retail centers fail. Converting malls to fulfillment centers, apartment complexes, schools or medical offices may give the properties new life—but at a cost.

One analyst says that such strategies could reduce property values anywhere from 60% to 90%. A mixed-use development may offer better recovery values.

A mixed-use development takes extensive planning and capital, though. Ten years is a common length of time from inception to completion.

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Multifamily Housing

AEC inspections are the key to financially viable office to residential adaptive reuse projects

About a year ago our industry was abuzz with an idea that seemed like a one-shot miracle cure for both the shockingly high rate of office vacancies and the worsening housing shortage. The seemingly simple idea of converting empty office buildings to multifamily residential seemed like an easy and elegant solution. However, in the intervening months we’ve seen only a handful of these conversions, despite near universal enthusiasm for the concept. 



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