Retrofitting existing buildings for healthcare tenants – Costs and benefits

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The healthcare industry is experiencing major changes, from new care delivery models to consolidation of systems. It is driving demand for the right-sized, efficient clinical space. Healthcare providers often find existing buildings that are retrofittable to meet their facility needs at a lower cost than new construction. As CEO of Appelt Properties, an experienced medical real estate developer, I’m often asked if retrofitting existing buildings for healthcare tenants makes sense.

Costs of retrofitting for medical use

Converting an existing commercial building or retail space into a modern healthcare facility involves significant investment.

  • Structural modifications – Floors may need reinforcement to handle heavy imaging equipment. Support beams might need adjustment for large open spaces like operating rooms.
  • Electrical upgrades – More power will be necessary for medical equipment and IT systems. It means new breaker boxes and wiring.
  • HVAC improvements – Heating/cooling systems must be right-sized and provide proper ventilation rates for healthcare uses.
  • Plumbing rerouting – Plumbing must accommodate higher water demands and medical gas connections.
  • Fire protection – Healthcare has stricter fire codes. Retrofits may require new sprinkler systems, fireproofing, and compartmentalization.
  • Accessibility – Ramps, elevators, doors, and restrooms will need modification for ADA compliance. Wayfinding and signage must be hospital-grade.
  • Life safety – Facilities must support the safe movement of patients between areas. Proper emergency lighting, exits, and alarms are required.
  • Hazardous material abatement – Older buildings often contain asbestos or lead that needs abatement.
  • Security systems – Healthcare facilities require robust access control, surveillance cameras, and infant protection systems.
  • Telecom/IT infrastructure – Extensive cabling, redundancies, and WiFi coverage enable digital healthcare delivery.
  • Building resiliency – Upgrades for emergency power, flood protection, and other hazards ensure continuous operations.
  • Interior finishes – Finishes must withstand heavy use and be easily sanitized. Acoustics, lighting, and textures should promote healing.

These substantial investments result in assets tailored to modern healthcare service delivery.

Benefits of retrofitting vs. new construction

Retrofits typically are completed faster than new construction, enabling quicker occupancy. Existing buildings allow greater flexibility in space plan configuration. Retrofitting can cost 20-60% less per square foot compared to new construction. Converting a well-located existing building provides services near where people live and work. Retrofits spark renewal in older areas without new construction. Reusing buildings reduces waste and environmental impact compared to demolition and new builds.

Evaluating the viability of healthcare retrofits

To determine if conversion is feasible, greg appelt toronto from Appelt Properties conducts in-depth due diligence.

  • Structural analysis – Can the existing structure accommodate renovations without excessive compromise?
  • Mechanical, electrical & plumbing systems – Do systems have the capacity to improve cost-effectively?
  • Permitting – Will zoning and building codes affect ease of approval?
  • Hazardous materials – Is abatement of any asbestos, lead, or PCBs manageable?
  • ADA compliance – How difficult will it be to modify for accessibility?

Our team works closely with healthcare providers to assess options and the feasibility of repurposing or retrofitting existing buildings to meet evolving healthcare real estate needs. While retrofitting has challenges, in the right situation, it is an ideal way to create modern clinical space at a lower cost.