Breathing New Life Into Empty Buildings: The Adaptive Reuse Opportunity
As founding principal of Derrington Building Studio, I've seen how transforming existing structures creates both economic opportunity and community value. Here's why adaptive reuse represents one of the smartest development strategies for the decade ahead—and how your organization can capitalize on this growing trend.
Drive through any American city today and you may notice something: empty office buildings with "For Lease" signs that have been there for months, shuttered retail centers that once bustled with activity, and industrial warehouses sitting vacant while new construction happens on greenfield sites. But where others see problems, smart developers, landlords, and entrepreneurs are seeing opportunity.
Adaptive reuse—the transformation of underutilized buildings into new functional spaces—has moved from niche specialty to mainstream development strategy. Rather than demolishing old structures, forward-thinking property owners are repurposing them into housing, mixed-use hubs, creative studios, and community facilities that serve modern needs while honoring architectural character.
At Derrington Building Studio, adaptive reuse projects have become a cornerstone of our practice. Our portfolio of Crux Climbing Centers demonstrates this evolution perfectly: from our original transformation of a South Congress warehouse space, to the former storehouse that became Crux Central, and now our upcoming Houston location. Each project shows how creative conversion can breathe new life into underutilized buildings while creating vibrant community destinations across different markets and building types.
After and before. Because it’s a better order.
What Is Adaptive Reuse?
Adaptive reuse is the creative transformation of existing buildings for purposes different from their original design. It's about recognizing the inherent value in existing structures—their materials, character, location, and embodied energy—and reimagining how they can serve contemporary needs.
This isn't simply renovation or restoration. Adaptive reuse involves fundamental programmatic changes: converting an auto body shop into climbing gym, transforming a warehouse into artist lofts, or turning an old mall into a community college. The goal is to preserve what's valuable about a building's character while completely reimagining its function.
The defining characteristic of successful adaptive reuse is creative problem-solving. How do you insert today's systems into yesterday's walls? How do you create adequate parking for a new use in a building designed for a different era? How do you honor a structure's history while meeting contemporary building codes and user expectations?
These challenges, rather than being obstacles, often spark the most innovative and memorable design solutions.
Why Adaptive Reuse Is Booming Now
The Perfect Storm of Vacancy and Demand
The numbers tell a compelling story. According to commercial real estate data from CBRE and JLL, post-pandemic remote work has left U.S. office vacancy rates at a 30-year high, hovering around 20% by late 2024, with older Class B and C buildings hit hardest. Simultaneously, retail apocalypse has left countless shopping centers and big-box stores empty as consumer behavior shifts toward online shopping and experiential retail.
But this vacancy crisis coincides with unprecedented demand for housing. The National Association of Realtors estimates 4.3 million housing units are needed by 2035 to meet growing demand, while the Urban Land Institute reports increasing demand for creative workspace and community amenities. Converting empty offices into apartments or transforming vacant retail into mixed-use housing can address both property vacancy and housing shortages simultaneously.
[Suggested Image: Infographic showing office vacancy rates vs. housing demand statistics]
Downtown Revitalization Imperative
Cities across America are grappling with declining urban cores. Empty buildings create urban blight, reduce property values, and diminish foot traffic for remaining businesses. Adaptive reuse can reverse this cycle by bringing residents, workers, and visitors back into once vibrant areas.
The economic impact extends beyond individual buildings. When a vacant storehouse becomes a climbing gym, it doesn't just fill empty space—it attracts hundreds of visitors daily, supports surrounding food and beverage establishments, and signals neighborhood investment that encourages further development.
Speed to Market Advantage
In many cases, adaptive reuse projects can reach market faster than ground-up construction. While you're still dealing with design and permitting challenges, you're starting with existing structure, basic utilities, and often advantageous locations. For entrepreneurs and developers looking to capitalize on market opportunities quickly, this speed advantage can be decisive.
Our experience with the Crux locations demonstrates this: by adapting existing buildings rather than building from scratch, we were able to create climbing facilities in a fraction of the time required for new construction, allowing the business to establish market presence and begin generating revenue while competitors were still in planning phases.
Opportunities for Property Stakeholders
Developers: Unlock Hidden Value
If you're a developer, adaptive reuse offers access to prime locations at below-market acquisition costs. Underutilized buildings in established neighborhoods often sell for significantly less than comparable land for new construction, yet they offer immediate access to infrastructure, transportation networks, and established foot traffic patterns.
The key is recognizing that higher renovation complexity can be offset by lower land costs, reduced infrastructure requirements, and often significant tax incentives. Many of the most successful adaptive reuse projects combine creative vision with financial pragmatism.
Landlords: Transform Liability into Asset
Property owners struggling with vacant buildings have a choice: continue paying taxes and maintenance on empty space, or invest in transformation that creates new revenue streams. The most successful landlord partnerships I've seen involve owners who recognize that modest renovation investment can dramatically increase property values and rental income.
Rather than competing with newer buildings on their terms, adaptive reuse allows properties to compete on character, location, and uniqueness—qualities that new construction often can't replicate.
Crux Central in the early stages of construction. (Hint - it’s not a very interesting space)
Crux Central after opening. (It’s a little better now). Photo by Leonid Furmansky.
Prospective Tenants: Find Your Competitive Edge
For businesses seeking distinctive space, adapted buildings offer character that new construction simply can't match. One thing that can't be created new is the feeling of time. Often, old buildings have a sense of history that can be a huge draw for users. High ceilings, exposed structural elements, large open spaces, and architectural details create memorable environments that enhance brand identity and customer experience.
Each of our Crux locations leverages different character elements: the industrial heritage of our original South Congress location, the exposed brick of the former storehouse at Central, and the unique spatial qualities we're uncovering in our Houston project. The authentic, weathered materials and proportions of these spaces reinforce climbing culture in ways that new construction simply cannot replicate.
Creative Entrepreneurs: Access Affordable Space
Artists, makers, small manufacturers, and creative businesses often find their ideal spaces in adapted buildings. Former warehouses, factories, and retail spaces offer the large, flexible areas that creative work requires, often at rents that are competitive when compared to new construction.
The character of older buildings—concrete floors, exposed utilities and structure—often aligns perfectly with the aesthetic and functional needs of creative enterprises.
Why Adaptive Reuse Creates Better Outcomes
Instant Character and Authenticity
New construction, no matter how well-designed, starts with "new". Adapted buildings come with built-in character: the patina of age, the weight of history, and the authentic materials of their era. This character can't be fabricated—it must be earned through time and use.
Smart adaptive reuse preserves and celebrates these qualities while introducing contemporary elements that create compelling contrasts. The result is often more interesting and memorable than either pure preservation or complete replacement.
Location Advantages
Many underutilized buildings sit in prime locations that would be tremendously difficult to access for new construction. Former department stores anchor established shopping districts. Old warehouses occupy industrial areas being transformed into live-work neighborhoods. Historic office buildings sit in urban cores with excellent transit access.
These locations often offer embedded advantages: established transportation networks, nearby amenities, and foot traffic patterns that new developments must build from scratch. Our South Congress Crux location exemplifies this—situated in one of Austin's most vibrant corridors, it benefits from existing foot traffic and the area's established reputation as a creative destination.
[Suggested Image: Map showing prime adaptive reuse locations in a city center with transportation and amenity overlays]
Economic Efficiency
While adaptive reuse projects have their complexities, they often deliver better economics than new construction. Lower acquisition costs, existing infrastructure, potential tax incentives, and faster time to market can create significant financial advantages for developers and tenants.
However, it's important to understand Texas-specific challenges. The state imposes sales tax on both construction materials and labor for renovation projects (read this shocking code here and here), unlike new construction which is generally exempt. This can add 6-8% to total renovation costs and must be factored into project budgeting from the outset. Understanding these costs—and structuring projects to minimize their impact through strategic material selection and value engineering—is crucial for feasibility.
The key is understanding which buildings offer the best transformation potential and structuring projects to capitalize on inherent advantages while mitigating regulatory challenges.
Design Opportunities That Inspire
Blending Old and New
The most successful adaptive reuse projects create compelling dialogues between old and new elements. This might mean inserting contemporary glass and steel interventions into historic masonry buildings, or introducing modern lighting and technology while preserving original architectural features.
Across our Crux portfolio, we've maintained the material character of each original space while introducing climbing-specific elements: colorful climbing holds that pop against weathered brick walls, modern route-setting that takes advantage of existing ceiling structure, and striking daylighting that highlights both climbing features and architectural character.
Innovative Spatial Solutions
Adaptive reuse often requires creative responses to spatial challenges. How do you create private offices in an open warehouse? How do you add necessary amenities like modern restrooms and break areas without destroying the character of a historic building?
These constraints often spark the most innovative design solutions. Mezzanines can add floor area without overwhelming historic volumes. Glass-walled insertions can create privacy while maintaining visual connection to larger spaces. Carefully planned interventions can improve building functionality while preserving character.
[Suggested Image: Interior photo of one of the Crux locations showing the integration of climbing features with original architecture]
Community Activation
The best adaptive reuse projects don't just create new uses—they create new community destinations. By choosing uses that draw people throughout the day and week, these projects can transform entire neighborhood dynamics.
Climbing gyms, like our Crux centers, exemplify this activation potential. They bring together diverse communities of climbers, from families with young children to serious athletes, creating social hubs that extend far beyond the building walls.
Real-World Success Stories
The Evolution of Crux: Three Adaptive Reuse Models
Our portfolio of Crux Climbing Centers demonstrates how adaptive reuse strategies can be applied across different building types and markets, each leveraging unique characteristics of their original structures.
Crux South Congress: The Original Model
Our first Crux location transformed a sketchy auto shop in Austin's South Congress corridor. The building's high ceilings, concrete floors, and exposed structure created a new kind of facility that resonated with Austin's climbing culture. The location benefits from South Congress's established reputation as a destination for locals and tourists alike.
This project proved the viability of climbing gyms in adapted spaces and established design principles we've refined across subsequent locations: preserving industrial character, durable and plentiful areas, and creating flexible social spaces that encourage authentic interaction.
Crux Central: Scaling the Concept
Building on our South Congress success, Crux Central transformed a former storehouse into a 25,000-square-foot climbing facility. The project demonstrated how our adaptive reuse model could scale to serve different market areas while preserving authentic character.
Rather than fighting the building's utilitarian character, we embraced it. The feel of an old, utilitarian building helps visitors relax. The existing structure accommodated climbing walls while maintaining the building's honest, straightforward character. The open floor plan allows for flexible programming that can accommodate everything from youth climbing camps to adult fitness classes.
The project's success extends beyond the building itself. Crux Central has become a community hub, drawing climbers from across Central Texas and supporting surrounding businesses through increased foot traffic.
Crux Houston: Expanding the Portfolio
Our upcoming Houston location represents perhaps our most challenging and exciting adaptive reuse project yet. We're transforming a windowless, tilt-wall industrial building—the kind of structure many would consider architecturally hopeless—into a hip, pedestrian-friendly climbing hub.
The key insight was recognizing that what others saw as limitations could become distinctive assets. The building's stark concrete tilt-wall construction and fortress-like appearance, initially seeming inhospitable, actually offered unique opportunities. We're showcasing the building's raw materiality as a surprising, counter-intuitive feature that reinforces climbing's authentic, unpolished culture.
Through strategic interventions—new openings that create visual connections to the street, exterior improvements that welcome pedestrians, and interior modifications that celebrate rather than hide the building's industrial DNA—we're proving that even the most challenging adaptive reuse candidates can become community destinations when approached with creativity and vision.
Heading down from the Crux Houston lounge after a good workout an a morning coffee. Emails sent and ready for the day.
[Suggested Image: Collage showing interior views from all three Crux locations highlighting their unique character]
Funding Landscape and Incentives
Historic Tax Credits
For qualifying buildings, historic preservation tax credits provide substantial financial incentives. The federal Historic Tax Credit offers a 20% credit for rehabilitation of certified historic structures, while Texas adds a 25% state historic credit for properties listed on the National Register or as state landmarks.
These credits have been instrumental in making adaptive reuse projects financially viable across Texas. The key is early identification of qualifying properties and working with specialists who understand the certification and compliance requirements.
Opportunity Zones
Many aging commercial buildings sit within Opportunity Zone-designated census tracts. Investors can defer capital gains taxes by funding projects in these zones, making equity investment in adaptive reuse projects more attractive.
The intersection of OZ benefits with adaptive reuse potential creates compelling investment opportunities, particularly in transitioning urban neighborhoods where older buildings offer transformation potential.
[Suggested Image: Map or infographic showing the overlap of historic districts, opportunity zones, and adaptive reuse potential]
Municipal Incentives
Cities increasingly offer tax abatements, grants, or other incentives for projects that address blight and add community amenities. These local incentives, combined with federal and state programs, can significantly improve project economics.
Understanding the full landscape of available incentives—and structuring projects to maximize their benefit—often makes the difference between feasible and unfeasible adaptive reuse projects.
Design Considerations for Success
Code Compliance and Safety
Adaptive reuse projects must navigate complex building code requirements when changing occupancy types. Converting retail to residential, or office to entertainment, triggers different life safety, accessibility, and structural requirements.
Success requires early coordination with code officials and creative solutions that meet contemporary safety standards while preserving building character. This is where experienced adaptive reuse architects provide essential value—we understand how to achieve compliance creatively rather than simply overlaying new requirements onto old buildings.
Infrastructure and Systems
Older buildings often require significant mechanical, electrical, and plumbing upgrades to serve modern uses. The challenge lies in introducing contemporary systems while preserving architectural character and managing renovation costs.
Strategic planning can turn infrastructure needs into design opportunities. Exposed ductwork can become an industrial design feature. New electrical systems can be integrated with contemporary lighting design. Plumbing upgrades can enable new amenities that enhance building functionality.
Accessibility and Universal Design
Making older buildings accessible to all users often requires creative solutions that go beyond minimum ADA compliance. The goal is creating genuinely welcoming environments that serve diverse users while respecting building character.
Successful solutions often become design highlights rather than afterthoughts—new ramps can create interesting architectural features, elevator additions can be expressed as contemporary interventions, and accessible routes can improve circulation for all users.
Your Adaptive Reuse Opportunity
Adaptive reuse represents a convergence of economic opportunity, environmental responsibility, and creative challenge that's perfectly suited to the current development landscape. With high vacancy rates, growing demand for distinctive spaces, and increasing focus on sustainability, the conditions have never been better for successful adaptive reuse projects.
The key is recognizing that adaptive reuse isn't just about making old buildings work—it's about unlocking their potential to serve contemporary needs while preserving what makes them special.
For Developers: Look beyond new construction to existing buildings in established neighborhoods. Lower acquisition costs and faster time to market can provide significant competitive advantages, even accounting for Texas sales tax considerations.
For Landlords: Consider how strategic renovation investment can transform vacant liabilities into revenue-generating assets that command premium rents and attract unique tenants.
For Prospective Tenants: Seek out adapted spaces that offer character, location advantages, and cost benefits that new construction can't match.
For Entrepreneurs: Explore how older buildings can provide the distinctive character and affordable space that supports business growth and brand identity.
[Suggested Image: Community members using a successfully adapted space, showing activation and engagement]
The original Crux off of South Congress on opening day. Photo by Merrick Ales.
The buildings around us represent enormous embodied value—architectural character, prime locations, solid construction, and historical significance that can't be replicated in new development. The question isn't whether to preserve or replace them, but how to help them evolve to serve our changing communities.
At Derrington Building Studio, we specialize in seeing the potential in underutilized buildings and developing design solutions that honor their past while enabling their future. From our portfolio of climbing gyms to mixed-use developments, we help property owners and developers unlock the hidden value in existing structures.
The empty buildings in your community aren't problems waiting to be solved—they're opportunities waiting to be realized.
Ready to explore the adaptive reuse potential in your property or development portfolio? Contact Derrington Building Studio to discuss how we can help transform underutilized buildings into vibrant community assets that serve contemporary needs while honoring architectural heritage.
