A facility does not usually stop working all at once. The signs tend to appear gradually. Departments run out of space. Layouts that once worked begin creating bottlenecks. Repairs become more frequent, energy bills climb and employees find ways to work around limitations that have become part of their daily routine.

Eventually, addressing one problem at a time is no longer enough. The organization must consider a larger question: Should it renovate, expand or build a new facility?

The answer depends on the condition of the building, the suitability of the site, the effect construction will have on operations and what the organization will need from its facility in the years ahead.

When Is It Time to Take a Closer Look?

An older building is not necessarily a problem. Many facilities can remain useful for decades with proper maintenance and periodic improvements. Age becomes a concern when the building begins interfering with the work happening inside it.

Some of the clearest warning signs include:

• Overcrowded or inefficient spaces
• Layouts that no longer support current workflows
• Building systems that require frequent repairs
• A growing list of deferred maintenance
• Rising energy and operating costs
• Accessibility, life safety or code concerns
• Technology infrastructure that cannot support current needs
• A workplace that no longer meets employee expectations
• A facility that no longer reflects the organization or the service it provides

One issue may call for a repair or targeted improvement. Several happening at once may point to a larger facility problem.

“When multiple issues begin occurring simultaneously, organizations should step back and evaluate the facility strategically rather than continuing to make isolated repairs,” said Schemmer Architect Shane Larsen.

The amount being spent to keep the building running can be another indication.

“One of the biggest signs is when annual maintenance costs begin to outweigh the potential return on investment of a new facility,” said Schemmer Structural Engineer Tyler Schmidt. “When you are putting a lot of money back into an existing building just to keep it running, it may be time to consider something more substantial.”

That calculation will be different for every organization, but it can help owners recognize when continued repairs are no longer the most economical approach.

Start With the Building, the Site and the Organization’s Needs

It can be tempting to begin by comparing estimated construction costs. That is important, but cost alone will not tell an owner which option makes the most sense.

The first step is understanding the existing building. A facility condition assessment can identify the age and condition of the structure, roof, building envelope and mechanical, electrical and plumbing systems. It can also help owners anticipate major repairs and replacements that may be coming.

The next question is whether the building works for the organization. A facility may be in good physical condition but poorly suited to current operations. Departments may be in the wrong locations, circulation may be inefficient or spaces may not support the equipment and technology employees now use.

Owners should also establish what they need and want from the facility. That includes space requirements, workflow, access, utilities, technology and plans for future growth.

The location may carry its own advantages. For an industrial or manufacturing facility, access to highways, trucks or rail may be difficult to replace. Other organizations may rely on proximity to customers, employees, partner organizations or an established service area.

“If you have a lot of things from a site perspective that you do not want to lose, then renovation or an addition may be the right call,” Schmidt said.

Available land, parking, utilities, zoning, stormwater requirements and room for future development will also influence what can be done on the existing property.

“The best solution aligns both financial realities and organizational objectives,” Larsen said.

When Renovation Makes Sense

Renovation is often a good option when a building has “good bones” and its limitations can be corrected without rebuilding major portions of the facility.

That may be the case when:

• The structure remains in good condition.
• The location continues to serve the organization well.
• The building has historic or cultural value.
• Spaces can be adapted without extensive structural work.
• Building systems can be upgraded at a reasonable cost.
• Construction can be phased without creating unacceptable disruptions.

If the building is in good condition and primarily needs updated finishes or a modest reconfiguration, renovation may be the most economical choice. It allows the owner to continue using an existing asset while addressing the areas that are no longer working.

Renovation becomes less practical when the building itself limits what can be accomplished. Low floor-to-floor heights may make modern mechanical systems difficult to install. Existing electrical service or utilities may not support new equipment. Accessibility and code upgrades can also require improvements beyond the area originally targeted for renovation.

The structure and layout present additional challenges. Moving columns, modifying load-bearing elements or working around electrical equipment that is costly to relocate can quickly add complexity and expense. Hazardous materials, concealed deterioration and undocumented modifications may not be discovered until construction begins.

“In many cases, owners discover they are investing heavily to preserve a building that still won’t meet their long-term needs,” Larsen said.

When Expansion Is Worth Considering

An addition can make sense when the existing facility continues to serve the organization well but simply does not provide enough space.

Expanding may allow an owner to preserve a valuable location, continue using functional portions of the building and add space for a growing department, new service or specialized operation. Depending on how the addition is designed, work may also proceed with less disruption than a renovation of occupied space.

However, expansion is only possible if the property can support it.

Parking requirements and stormwater detention can reduce the amount of land available for a building addition. An expanded facility may also require more restroom fixtures, even if the new space is not located near the existing plumbing.

Those requirements can be easy to miss during early planning, but they may have a substantial effect on the layout and cost of an addition.

Owners also need to consider how the new and existing portions of the building will work together. Floor elevations, structural systems, circulation routes and utilities must connect successfully. Adding square footage without addressing existing workflow problems may leave the owner with a larger facility that still does not function well.

When Building New May Be the Better Investment

Building new may be the best option when the existing facility requires widespread upgrades, cannot accommodate the organization’s operations or leaves little room for future growth.

Starting from scratch gives the design team more freedom to organize the building around the owner’s actual workflow.

“You do not have to work around existing columns, electrical gear that is expensive to move or other elements of the existing building,” Schmidt said. “You get to be in the driver’s seat throughout the process.”

A new facility can account for current space needs, anticipated growth, technology, energy efficiency and future changes in how the building will be used. Construction can also take place while the organization continues operating in its current facility, reducing some of the disruption associated with a major renovation.

The initial investment may be higher, but that should be weighed against the cost of renovating and continuing to operate an older building. If renovation approaches the cost of new construction but delivers a shorter lifespan or requires major compromises, a new facility may provide better long-term value.

That comparison should include land, utilities, site development, relocation and the future use or sale of the existing property.

Do Not Underestimate the Effect on Operations

Construction costs receive the most attention during early planning, but the effect on day-to-day operations can be just as important.

Renovations may require staff, production or storage areas to move temporarily. Work may need to be completed in phases, extending the construction schedule and requiring employees to work around noise, dust, restricted access and utility interruptions.

“The biggest issue people face with renovations is having to abandon or temporarily relocate staff, production or storage while the work occurs,” Schmidt said. “That can sometimes be more of a hassle than building new or adding onto a building where operations are not affected.”

Older buildings also carry the risk of unknown conditions. Deteriorated utilities, structural issues, hazardous materials or previous modifications that do not appear in the available drawings can lead to additional work.

Owners should also account for:

• Construction cost escalation if the project is delayed
• Maintenance required while a long-term decision is postponed
• Continued utility and operating costs
• Replacement of aging systems
• Temporary space and moving expenses
• Lost productivity during construction
• Future modifications if the selected option provides little flexibility

A lower upfront cost does not always result in the lowest overall cost. Each option should be evaluated based on what it will cost to build, operate and maintain over time.

Bringing in the Design Team Early

Architects and engineers can help owners compare renovation, expansion and new construction before a preferred solution is selected.

That early work may include:

• Facility condition assessments
• Space utilization studies
• Functional programming
• Master planning
• Feasibility studies
• Cost modeling
• Life-cycle cost analysis
• Site evaluations
• Construction phasing
• Operational planning
• Risk identification

Design professionals also bring experience from working through similar decisions with other organizations.

“Architects and engineers have gone through this situation with many different types of clients,” Schmidt said. “They have seen the dos and don’ts more frequently than most owners.”

Through master planning, the design team can determine whether the existing building and site can accommodate the organization’s plans. If an owner wants to remain in its current location, the team can study ways to renovate or expand. If the property is landlocked or the facility can no longer support the organization, the team can evaluate potential sites and begin planning a new building.

There is no universal point at which renovation stops making sense or new construction becomes the obvious answer. Starting the evaluation before the problems become urgent gives owners time to understand the trade-offs, plan for the investment and choose the option that best fits where their organization is headed.

Contact Schemmer to have us evaluate the best solution for each unique situation. We’re here to help clients define and achieve their goals.

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