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Is Newer Better? Not Necessarily
When it comes to commercial real estate, the rules tends to be that a newer building is far better than its historic cousin. There are reasons for this thought: Older buildings require renovations, upgrades and more maintenance to be functional, many aren’t geared for current technology, and they are more susceptible to environmental damage and pest infestations.
However, a recent report from DBRS suggests that vintage buildings can be viable commercial real estate properties. For one thing, location can give an older building value, as can a historic landmark designation. Furthermore, the older buildings can have more character than more modern structures.
The DBRS report notes that classic buildings are at their best when aesthetics are important, such as in the case of hotels or other entertainment properties. Office assets, on the other hand, don’t age as well as their hospitality counterparts, while vintage retail structures are a mixed bag.
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