Commercial Building Construction: New Construction vs. Renovation

When a business starts to outgrow its own space, business owners have a choice to make. Should they renovate the existing space, or build a new building? Both choices have advantages and disadvantages. The choice to renovate or build anew is not made easily.

Knowing which factors to consider and how to weigh the benefits of each involved with each option can help business owners make the right choice for their company's needs. Budget and expense, timelines, sustainability and the needs of the business must all be taken into consideration. At Litchfield Builders, we help business owners and commercial property owners to sort through their choices and make the right decision. 

Learn environmentally-friendly and energy efficient practices for commercial construction in Connecticut.

There are many factors that come into play when trying to decide between building a new structure and renovation of an existing structure.

Budget

It's natural for commercial building owners to assume that building a new structure is more expensive than renovating an older structure. In reality, the cost comparison depends on many factors. While new construction is certainly costly, older buildings often face code compliance issues that can be expensive to address. ADA accommodations, building code upgrades and retrofitting the structure can be very cost inefficient, especially when renovating a historic building. Often, preserving an older building and maintaining its historic beauty is not as cost effective as building an all-new structure.

Upgrading a relatively modern building with small changes can be far less expensive than creating an all-new building. The only way to compare prices with certainty is to get a quote for both projects.

Return on Investment

ROI is something else to be taken into consideration when trying to budget for a commercial renovation or building project. ROI is the return on investment when a commercial property owner makes changes to his or her property. Calculating ROI can be complicated. Some changes have a bigger impact on business and sales than other changes.

For example, a restaurant that upgrades its dining area to fit more customers while at the same time making the dining experience more enjoyable for customers may attract more business and thus make back the money for its investment. Some renovations will attract more business and boost sales more than others, so this must be taken into consideration when budgeting for a project.

Timeline

Building a structure and renovating an existing structure happen on different timelines. Both timelines must be considered when trying to decide which is right for your commercial business.

Typically, renovations can be done in a matter of weeks or months. Renovations take place in the same space where business is conducted, so the timeline for completion is often more urgent than a commercial building project. However, business owners who want to minimize the impact of their renovation on their business can do so by limiting construction time to evenings and weekends or off-season dates.

A building construction can take a long time, even as long as a year or more. The difference is, commercial construction often has little impact on day to day life at the business. Staff and managers can continue with business as usual as their building is being made. Only after the building is constructed will employees of the business be required to upend themselves and make the transition to the new space.

Restriction

Commercial buildings are restricted by standard building codes and other laws. A building that is designated historic may not be allowed to be renovated without specific permission from local building officials or agencies. Meanwhile, a new construction project may be restricted by zoning laws. Commercial property owners must take both of these factors into account when deciding whether or not to build or remodel.

Sustainability

Sustainability is an important factor that commercial property owners take into consideration when they decide how to change or upgrade their property. Perhaps surprisingly, building re-use is considered much more sustainable than building construction in most cases. This is because demolition and building a new property produces far more carbon emissions than renovation of an existing property. Commercial property owners who want to make their business as sustainable as possible can usually do so by upgrading their property to be more energy efficient.

Pros and Cons

There are many pros and cons to remodeling and building a new structure.

Renovation

When considering the pros and cons of renovation, it's important to understand that renovations can vary by quite a bit. Some renovations are large-scale, others are relatively small. Often, building owners can control the scope of their commercial renovations, so as to fit their renovations in their budget.

Cons

• Time. Renovation seems like it should be less time consuming than new construction, but this is not always the case. Delays can make a renovation take almost as long or even longer than new construction.
• Limiting in scope. Renovations typically involve no new addition of space, so they're very limiting for businesses that are growing.
• Disruption. Renovations can involve a major disruption to the business, which can ultimately cost the business money and even customers.

Pros

• Time. While some renovations can take more time, they often do not.
• Cost. Renovations are often less costly than new construction, provided that there are not many retrofitting projects that need to take place in order for the renovation to happen.
• Trouble. A renovation is often less trouble than new construction. Renovations often take slightly less time to plan, require less design work and are often easier to implement overall.

New Construction

Like a commercial renovation, the size and scope of a new construction project can also be controlled. However, new construction projects are usually large, time consuming projects, even if the building owner makes the effort to keep the project contained.

Cons

• Cost. New construction is costly. Building a new structure is usually more expensive than remodeling an existing structure. Building owners must get many quotes to ensure that they're making the most cost efficient change to their business.
• Time. Often, new construction can take longer than a renovation.
• Effort. A new structure is usually made from the ground up, thus requiring the building owner to plan everything down to the last detail. This means that building a new structure takes a lot of effort on the part of the commercial property owner.

Pros

• Freedom. New construction involves more freedom to build anything that is wanted or needed for the business. For businesses that are rapidly changing or growing, this can have great benefits.
• Customizable. For businesses that have many unique needs, like industrial businesses that use specialized types of equipment, building a new structure affords more room for customization.
• Branding. Many businesses that construct their own building can reinforce their brand through their building's architecture and design.

Get Started

Are you considering upgrading your commercial building in the next year? Will you be renovating or constructing a new commercial structure? It's important to start planning in advance. Get quotes from reputable design build contractors so you can decide which type of commercial construction project is right for your needs.

Learn more about commercial remodeling with our free guide, Sustainability and Green Building In Commercial Construction, that outlines popular green remodeling trends, eco-friendly materials, sustainable site design and more.