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2 issues that may arise when converting industrial space to condos

On Behalf of | Jun 1, 2023 | Real Estate

There are many ways for development companies to turn a currently unused and depreciating property into salable real estate. Buying up unimproved land and building new homes to custom-suit individual buyers is one highly-profitable development model. Another involves buying large, older properties and retrofitting them into trendy modern housing.

The industrial loft aesthetic has never gone out of style since it first rose to popularity in the 1960s. A new generation of individuals concerned about environmental impact or looking to live their best life in a cultural center may be drawn to apartments or condominiums in what used to be an industrial space. Developing that space into multiple units could be a worthwhile venture, but there are a few considerations that the business developing the property needs to consider.

Toxic substance abatement

The age of the property and the kinds of businesses that occupied the building previously will play a role in what concerns the owner may have to address when turning what was once a commercial space into a living space. Asbestos would be one potential concern, and there are numerous federal rules for remediation and worker protection when dealing with asbestos.

Chemical residue, lead and even mold from water incursion are all examples of potentially toxic issues that will need to be addressed thoroughly and not just topically when turning a space into individual living units. Without proper remediation and disclosure, the developer could potentially be at risk of liability in the future.

Zoning issues

If an industrial building has stood vacant for years, the local community may be eager to see it repurposed for something else. However, there may also be resistance to what some may view as gentrification.

Both changes to the zoning for the property and variances can potentially allow a developer to take a property with industrial zoning and turn it into a residential multi-unit facility. Of course, the process of rezoning a property is often very lengthy and unpredictable, making advance planning and careful investment of the utmost importance to organizations looking to develop properties that are not currently zoned for residential units.

Exploring the possible challenges can help property developers and would-be investors minimize their risk for an upcoming real estate development project.