For many small business owners, the time will come when their company needs more space. A rapidly growing team, additional technology—whatever causes the need for expansion, owners will need to find a new commercial space.

Typically, this means choosing between building a brand-new commercial building or renovating an older space. There are several factors that will influence this decision, including your budget, timeline, and the unique space requirements of your company. While there isn’t a one-size-fits-all answer when choosing between design-build and renovation, a careful examination of the pros and cons of each can help you determine which option is right for your company.

Design-Build

Advantages

The most obvious advantage of building a completely new commercial space is the amount of control you have over the finished product. While renovation does allow for ample customization, constructing a new space gives you complete authority over the fine details of your building, including the exterior design. If you’re committed to a specific design or can’t fit the needs of your business by renovating, building from the ground up may be the way to go.

You may find an advantage when it comes to financing a new building, as a construction contingency is usually put into place by the lender. This contingency adds 5–10% to the amount borrowed and helps account for unexpected changes or additional costs. This offers increased comfort for both the lender and borrower.

Disadvantages

If you choose to go the design-build route, be aware your building may have a lower resale value if you ever want to sell. Especially if you’ve designed a unique layout, your building may not work as well for other companies looking to buy and renovate. Expensive or specialty materials may not recoup their cost.

While there are exceptions, building a commercial space is more expensive than renovation in most cases. It will likely also take longer than renovation. Depending on the extensiveness of renovation, it could take weeks or months, while building from scratch could take over a year.

If environmental impact is a concern for your commercial space, demolition and rebuilding produces more carbon emissions than renovation. While your new building can be designed with energy-efficient building practices, you can also retrofit a renovated building with eco-friendly elements.

Renovation

Advantages

The renovation of a commercial building is usually less expensive than a design-build, especially right now as material and labor costs continue to rise. However, as we’ll discuss further, an older building may have issues that are expensive to correct, making a design-build the more cost-effective choice.

Though not to the level that a design-build offers, renovation does offer opportunities for customization. Renovating an existing building to fit the needs of your company can be an exciting challenge and often results in a one-of-a-kind space.

If certain business essentials— heat and A.C., roofing, windows, lighting—are in good working condition, this can significantly cut the cost of your renovation. However, this advantage only applies if these elements are up to code. If they’re not, the cost to replace them could test your budget.

Disadvantages

Renovation offers customizability but much less control over your building’s design. Especially if your building holds historical significance, it adds extra challenges when trying to fit a space to your business, rather than the other way around. If your business has unique needs for technology or workflow, building from the ground up may be the better choice for work efficiency.

Speaking of which, the building you plan to renovate may be less energy efficient due to outdated building practices. When building new, this can be avoided with modern construction techniques from a knowledgeable team.

In older buildings, there may be health and safety concerns that need to be addressed, like faulty wiring, old fire alarms, or poor air quality. If these concerns aren’t up to code, they can be expensive to update. Building new is usually more expensive, but these issues can sometimes tip your renovation over the budget.

The decision between a design-build or renovation depends heavily on your unique situation and budget. A quote from a team that’s experienced with both new builds and renovation, like BCI Construction, can help make the decision clearer. Contact us today to get started on your new commercial space.