There are many vacant commercial properties, including shops, offices and flats throughout the UK. This reflects the difficulties experienced by many parts of the country because of economic circumstances. Within these vacant properties are some of the best tools available to help accomplish our goal of a more environmentally friendly lifestyle.
Rather than demolishing and removing everything already built, we need to look for ways to revitalise existing buildings. Through renovations and refurbishing existing buildings instead of new construction, we can significantly reduce greenhouse gas emissions, minimise waste and retain the original character of the building. Apart from the obvious environmental benefits, recycling and repurposing vacant properties meet certain green criteria and provide additional value to the surrounding community.
Recycling and environmental regeneration
The construction industry contributes significantly to greenhouse gas emissions and the majority of this is unaccounted for. We are all familiar with the discussions around making buildings efficient; however, we rarely consider the potential consequences. One alternative to new construction is to first explore new uses for existing and vacant properties.
Local government efforts are increasing, in town centres in particular, to encourage strategies for rehabbing properties that get reused. The environmental argument is clear; putting this into an economic plan creates layers of complexity.
The cost of bringing a property back in line
While converting vacant buildings into usable space can be a costly venture at first, there are many aspects to think about, including covering the costs of any necessary structural work and developing regulation guidelines for safety and the environment. Developers usually have to buy the properties as soon as they can, even before making improvements to them.
In the auction setting, where there are fixed deadlines and deposits are generally not be refunded, these factors are even more crucial in determining whether there will be a successful transaction. Buyers at auctions for properties that are vacant typically have to rely on conventional sources of financing and, due to a lack of sufficient time and resources to complete construction processes, are often unable to meet the necessary timelines for closing the transaction.
As a result, due to the inability of traditional lenders to provide financing quickly enough, most investors will resort to short-term financing as a means of securing the property. This approach limits investors’ ability to make improvements while awaiting the finish date on their loans.
Closing the gap for sustainable usage
When it comes to regenerative development projects, sometimes the immediate needs of these projects must be satisfied quickly! This is where a temporary bridge loan can help.
Through temporary bridge funding, a developer can instantly purchase a property that is still vacant (prior to closing on it) with a minimum of disruption to the purchase process.
By using temporary bridge funding, the developer is given the ability to complete required environmental upgrades, improve energy efficiency, or go from an existing building use (e.g., commercial) to a new building use (e.g., residential/commercial).
Once the developer has completed the required environmental upgrades and/or energy improvements to the building, the temporary bridge funding will be replaced by a more permanent financing method.
Investors should never use temporary bridge funding as a substitute or workaround for properly performing “due diligence” on a building. Always consider the costs associated with repairing/restoring/upgrading the building, remain compliant with local building codes and regulations, and establish sustainability goals = therefore, using temporary fast bridging finance will allow investors to acquire properties that would not otherwise be available.
Moving towards sustainability in a regenerative way
Preparing existing buildings for a sustainable future is about more than just reducing greenhouse gases. It creates jobs and will generate tourism, keeps urban sprawl in check and helps sustain well-balanced communities. By upgrading vacant buildings, we will continue to breathe life into our communities.
Often, while on the path to net-zero sustainability, the most sustainable building is the one that exists; but sometimes, those buildings have little or no support in terms of financial assistance to help them reach their full potential.
