Renovating or Adding to Your Commercial Property: What should you know before doing so?

Happy December everyone! Hope everyone had a wonderful Thanksgiving. As we now enter the last month of the year, most business owners and/or commercial property owners are working on their 2024 plan, budget, and goals. In some cases, this includes the prospect of renovating or adding onto the commercial property to rebrand, make better use of the space, have more space, be able to rent it out, etc.

Renovating or adding to your commercial property is like residential renovations/additions, yet it is lengthier process and much more involved than that of residential projects. In this blog, we’ll explore seven key factors you should be aware of before embarking on a commercial renovation or addition project. With the right knowledge and preparation, you can ensure a successful and profitable commercial project.

1. Purpose and Goals:

This first key factor is just like a residential renovation/addition project. It is important for the owner to reflect and assess what the needs and goals are for the space. This is not just personal preference; it also needs to be considered by the people who will be using the space daily. If you as the owner do this before reaching out to an Architect, write out what your end goal is and what type of spaces and quantities you may need in the renovation or addition. What are the must haves and what can be compromised. If you are not sure and need guidance to define them, reaching out to an Architect and having them work with you to create a program and overall concept will be highly beneficial.

I always like to ask my clients various questions to get to the center of the end goal and the why. I also ask them to explain how the space is currently used or the systems/procedures used by those using the space. Knowing the key users and how it is or will be used highly informs the programming and layout.

2. Space Utilization and Design:

Once you have the purpose and goals, and have carefully selected the Architect, all required Engineers, and Surveyor then you can begin to dive into the design and how the space is used.

Having a detailed survey plan created by the Surveyor will inform us of the possible exterior changes that will be needed and address utilities, parking, and zoning analysis.

As for building design, the Architect will do an evaluation of the current space and the potential opportunities that could be implemented. This, along with the concept and general program, will be used by the Architect to begin to provide blocking diagrams that turn into schematic design plans that will allow you to understand the overall space utilization and spatial design.  It will be fine tuned to create the most aligned and code compliant design. With commercial projects, there are more regulations to adhere to, especially ADA compliances. Furthermore, for commercial projects there is more interior design involved. As well as Furniture and Equipment coordination depends on the end user.

The Engineers will also do an evaluation of the existing electrical, plumbing, mechanical, fire alarm and/or sprinkler systems to see what can be preserved and what needs to be changed. The schematic design will further inform the changes. As the space utilization and occupancy type may require different things if changing from one to another.

3. Regulatory Compliance and Permits:

Like residential renovation/addition projects, understanding local building codes, permits, and zoning restrictions is essential. Failing to do so can lead to costly setbacks and legal issues. The great part of this is that you do not need to do the research and analysis, that is why you have your Architect on board and in some cases, you may even want to have a real estate lawyer on board for coordination. They, the Architect and possibly Lawyer, will make sure the research and comply will make sure the project complies with all relevant regulations in your area.

If the scope of work you wish to do in general does not comply with zoning or building code requirements, the Architect will provide a solution that is code compliant and/or provide an option to seek a variance if there is a good chance for it to get approved. If you do seek a variance for a commercial property, it is recommended to have a Lawyer on board, since they tend to be harder to get approvals for. When it comes to regulations, the best advice is to remain flexible and open-minded to different options. There will be cases the project just can’t be done, but an Architect will always do their best to provide the best options, if they are reasonable and feasible.

4. Budget and Financial Planning:

Creating a budget for a commercial renovation or addition project is tricker one than in residential since there are more variables and the costs do tend to be higher than that of residential projects. Though you won’t have an exact price from just discussing the project with an Architect, they can provide an educated wide range of prices that it may entail. It would also be wise if you had the budget to hire a cost-estimate firm to help with creating a more detailed budget. Do note that we currently live in a variable market where prices change constantly, so that range may well be off by some percent. Therefore, the best course of action is to assess if that range is within your means and then move forward with the drawings.

Once the Construction Drawings are completed, you can then go into the bidding and negotiating process with Contractors to select the best one. My advice to all my clients is to have 4-5 estimates. In most cases, drop the lowest and highest, but also review the full contract of all to make sure everything in the drawings is included and to see what their exclusions are. In most cases, you want to select the lower/middle price but, also, consider if you get along with the Contractor and that their subcontractors are reputable. It is helpful to have the Architect hired to provide their assistance during this phase of the project to help you make an educated choice. The Architect can help level out the numbers. Another option is to have a third-party cost estimating project management firm review it as well to see what best aligns with the current market.

Furthermore, as you consider your budget keep in mind that the budget should include cost of Contractor fee (materials and labor), Professional fees, Permit Fees, and unexpected expenses. I always advise including a contingency fund to cover unforeseen costs that may arise during the project, this may be 20 to 30% depending on scale of project. If it’s a renovation project, you would want to include a higher percentage, since more unforeseen items can arise when demolition happens.

5. Timeline and Project Management:

Understanding that Commercial project will take much longer than a residential project is important. For commercial projects, it is key to have a written timeline with milestones, which is reviewed weekly to make sure things are on track. You must prepare for some level of disruption during the renovation and understand that sometimes one delayed item can delay a large part of the project due to sequence of things. Effective project management can make all the difference and if you can’t be involved, then hire an owner’s representative to be there for you on a weekly or even daily basis depending on the size of project.

6. Quality Control and Inspections:

Quality control is paramount. Though regular inspections are mandatory by the building department throughout the project, do note that some inspections will need to be done by a third-party inspector. It is also highly recommended to have the Architect and Engineer provide Construction Administration services. This will allow them to visit the site at key project milestones and ensure that the work is being done per the drawings to meet your expectations. Also, it is key to have weekly calls or meetings for the Contractor to provide an update on the schedule to make sure the project is on track, and that all inspections are being completed and passed at timely manner. This also helps keep realistic expectations of the project, especially if there is an issue or delay that happens along the way.

7. Client Communication and Collaboration:

Commercial projects are length and much more complex than residential projects, in most cases. In turn, it is key to have clear communication and collaboration between all team members. This includes the owner, owner’s representative, Architect, Interior Designer (if the Architect does not provide the service in house), Engineers, Vendors, General Contractor, and Sub-Contractor. In most cases, the Architect is point of contact and coordinator, alongside the owner’s representative. They get all information and questions and make sure things are done in an orderly manner. There are cases when there is a third-party project manager to also gets involved and works on coordinating the full project. All in all, if all items are communicated and documented in an organized manner the project will go smoothly.

In Conclusion, commercial renovations and additions can be a great endeavor, but they require careful planning and coordination. By knowing the purpose/goals, defining the how the space is used and design, addressing regulations and getting permits, properly budgeting having a good timeline/management and making sure there is quality control, you can embark on a journey to increasing the value, improving the use of space and/or expanding your commercial space. Keep in mind that the Architect’s and Engineers’ professional advice and resources are invaluable throughout the process.

For more in-depth information on commercial renovations, additions, or other types of projects, feel free to check out our other blog posts, Instagram / Facebook posts or contact us for expert guidance tailored to your specific needs. Here at Rooted Architecture, we are committed to helping our clients realize their vision while ensuring a smooth and successful construction journey. If you’re considering a construction project, contact us today to discuss how our architectural expertise can benefit your project from the very start. You can reach out to us by going to our contact page and filling out our Client Questionnaire,  send us an email (also on our contact page) or go to my Calendly and schedule a call/Teams meeting.

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Keep growing,

Katherine A. Serrano Sosa, AIA | NCARB