Commercial/Industrial and Institutional Renovation vs New Construction
During many of my visits with commercial and industrial customers, I have the opportunity to discuss renovations vs new buildings. Owners and facility managers have to see the pros and cons of such a decision. Whether the facility is a healthcare or education facility or manufacturing and distribution facility, continually changing technologies and environmental challenges must be addressed to make the right decision.
Renovation or New Construction?
The pros and cons of renovation vs. new construction depend on the following factors:
- Existing Structure: If an existing structure needs only a few minor updates, modifying the building for efficiencies and effective operation may be the right choice. Owners have to be careful, though, because some minor changes may cause some significant dollar modification, such as HVAC changes. Certain municipalities may also require environmental changes, such as run-off and ADA requirements throughout the building changes. Knowing the costs of each of the required changes may be the difference between performing the minor changes and new construction.
- Budget: Price is always a factor. Small modifications may cost less new construction, but the overall cost should be measured against the end goal. Sometimes the infrastructure changes are due to a larger company goal, such as marketing changes or “impact”, it may be more important to investment spend on new construction than renovate the old. It is important to seeki out a few contractors to price the project. This will allow the owner to gauge his budget accuracy.
- Technologies: Depending on the customer usage of a building, the technology may play a significant role in deciding on renovation vs new construction. The technology requirements, such as IT, medical equipment or manufacturing equipment should all be identified as part of the building changes. Certain companies have a vested interest in having LEED certified structures (for tax credits or marketing campaigns). A general contractor should be well versed in knowing the requirements of the company to meet those needs.
- Time Constraints: The opportunity costs of not operating during the construction period may be a determining factor related to new construction vs renovation. If a company misses a certain amount of profit margin during the construction period, they will never be able to re-coupe that loss. It should be considered as part of the decision. Certain types of facilities may be able to work through a renovation during slow times of their year, such as educational facilities, while others may not.
- Project Efficiency: A construction project that starts with little planning will not be efficient. It should be a general practice to meet with the contractor to discuss time frames and bench marks to identify project efficiency. Any problem may be traced back to the proper planning (or lack thereof).
Having a general contractor involved throughout the design and planning stages is highly recommended. At John G. Moser & Son, we stress being part of the project from the beginning. Making a decision on the contractor may involve a number of factors. Trusting your contractor is critical to the process. Requesting a “rough” estimate from a contractor prior to committing to the project is a great idea. This will allow the owner to evaluate, through the “interview process” how the contractor will handle pricing, technology, governmental and project change issues.
From the contractor’s standpoint, understanding the customer’s operations and overall goal for the project are critical successful modification to the infrastructure…whether it is a renovation or new construction.