Some area landlords are finding new and better uses for industrial buildings that don’t fit the specifications today’s manufacturers desire. To turn those properties productive again, they’re reimagining them as mixed-use, residential and retail spaces that have the potential to anchor burgeoning neighborhoods.
“Landlords who have a shell of a former industrial-use building that’s been deemed obsolete because the ceiling is too low, the loading areas are too short or the location isn’t ideal are being transformed into multi-use properties,” says Eliot Kijewski, senior vice president at Cushman & Wakefield/CRESCO Real Estate.
He says examples of this change can be seen on the Detroit Shoreway, Midtown and other up-and-coming Cleveland neighborhoods that have shown that repurposing existing properties can create great success for all involved. It doesn’t require rebuilding and there’s no land to pay for, meaning that the application of operational flexibility is economical.
Smart Business spoke with Kijewski about how area landlords can apply operational flexibility to awaken once-dormant properties.
Why is operational flexibility a topic that’s being discussed today?
We’re seeing an ever-changing work environment with emphasis shifting somewhat to tech-oriented companies that need flexibility and a location that caters to what professionals desire. Many of the successfully converted properties are on public transportation routes.
They offer greater use of space per square foot per person, and they can accommodate on-the-go workplaces and shared workspaces that are the trend at the moment.
It’s also influenced in part by communities attracting and adapting to the needs of young professionals who want to live and work in the city. Many of the manufacturing shops in some of these neighborhoods aren’t able to grow to accommodate the needs of companies in this industry and have had to move outside of the city to areas with dedicated industrial zones.
They’re leaving behind old structures that aren’t suitable for the needs of today’s manufacturers, so landlords are taking a cue from the communities and adapting, which benefits everyone involved.
What advantage does it provide to owners?
Operational flexibility enables landlords to adapt to an ever-changing workforce. Offices, light assembly and even commercial kitchens can work within a manufacturing shell and get their businesses off the ground. It’s better than starting from scratch because the bones are there, and any specific requirements of the business typically can be accommodated, such as additional power and Wi-Fi.
How has Cleveland’s commercial real estate market responded to the need for operational flexibility?
There are some landlords and developers who have been able to create a niche by adapting their buildings through operational efficiency to meet changing market demands, and they’ve seen success because of it. It’s easy to look across the market and find those who haven’t adapted.
However, some of the change reflects community zoning laws that haven’t caught up to the trend and now don’t allow landlords to be flexible to meet these new needs.
Industry is also helping to drive change, both in communities and with developers. Cleveland Clinic and Cleveland State University, for example, have helped transform the landscape in their respective communities.
Developers and landlords can look to the very recent past and the recession to see how some recreated themselves, did so for very little money and helped fashion a new landscape. They improved and made viable again buildings they owned, sometimes through public assistance, and became a vehicle for job creation in the process.
Landlords whose properties have stagnated or aren’t winning lease-ups can recover by recreating their property through operational flexibility to make it more attractive and in-demand. ●
Insights Real Estate is brought to you by Cushman & Wakefield/CRESCO Real Estate
