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Commercial Real Estate Construction: Remodel, Expand OR Build?

Are you considering commercial real estate construction? As a business leader, you’re going to experience change. Changes such as the evolution of your products/services, new talent and employee turnover, and new technology will influence the way your business operates. With these may also come a need for facility changes. Facility changes could mean a difference in warehouse, manufacturing, building, or office space. In this case, the most common changes a company decides on include: remodeling, expansion, or building.


In order to decide between these three, here are some questions to ask: Would remodeling your current space be enough? Do you need expansion or extra separate space? Do you need to build an entirely new facility? Can your business still function profitably during the construction phase? While you can contact a general contractor to help you best answer these questions, we will overview some points that can help you choose the best commercial real estate construction type for your business.


Before we get into the specific pros and cons between remodeling, expanding, and building, first consider your budget, time, and location needs. While building a new construction might seem like the most expensive option, consider the unknowns of remodeling and expansion. Remodels and expansions might drive up cost due to demolition, and unfortunate surprises found within the walls (e.g., defective wiring, water damage). If your current building is outdated, a remodel or expansion might usher forth a building code requirement (e.g., the need to add an elevator or sprinkler system).

Another factor you’ll want to consider is time and location. Do you need to act fast? Or can this project wait for the future? For location, consider if your current space restricts any operations. Would you have to take care of various building codes before you expand?

As you consider these factors, keep in mind that no one construction option is always better than the other. Your best choice will depend on your specific situation and facility needs. Now let’s take a look at the pros and cons of each type.


  • PROS: In general, remodeling is the quickest, least expensive option. It is also considered the most efficient by making use of current space. Plus, your company can stay in its current location.


  • CONS: During remodeling, contractors might face unexpected issues that create cost overruns and time delays. Also, while remodeling can address your functional needs, it’s unlikely to add much more space. Remodeling can also interrupt business operations due to noise, dust, or electricity adjustments.


  • PROS: Real estate expansion provides more space and less disruptions (compared to remodeling). Expansions typically happen outside of where your current business operations are located. It also saves the cost of implementing expensive upgrades to get the new space to accommodate the latest in building technology. While more expensive than remodeling, it typically isn’t as expensive as a new construction project.


  • CONS: As mentioned above, expansions can be more expensive than remodeling due to time delays, material costs, and cost overruns. It also might not address the function of your current space. You might find that your current space is no longer up to code like the expanded space.


  • PROS: Building a brand new piece of commercial real estate gives you the freedom to choose size, floorplan, features, and location. It will also be ready to support your specific operations for much longer than an old building. Constructing a new building also provides many great PR opportunities for your brand.


  • CONS: Of course, a new building is usually the most expensive option upfront due to the need for designing, planning, materials, construction crews, and land. But the long-term benefits often outweigh these upfront costs.


We hope that these details have given you a better idea of how to tackle your specific building need. If you’re ready to take action, a general contractor can help you prepare a cost comparison to determine your best option. Contact LeFrois Builders and Developers to get started on your commercial real estate construction project.

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