Many industrial businesses feel they need a brand-new greenfield build to meet modern supply chain or manufacturing requirements. This outlook often leads them to overlook perfectly viable legacy industrial sites that can be upgraded or retrofitted for modern use cases.

An older facility doesn’t necessarily have to be a compromise. A retrofit often has a lower price tag than a new build, and older facilities are often located in strategically advantageous markets where there is no longer room to build new structures. Rather than overlooking legacy buildings, developers, owners, and tenants should take the time to identify which upgrades the facility could support to make it useful for modern manufacturing, distribution, or logistics operations.

The objective doesn’t have to be to make the building look brand new; the goal is to make it safe, efficient, and operationally ready for what the business needs today and what it will need tomorrow. Here are five ways that legacy facilities can often be upgraded.

1. Modernize the incoming infrastructure

Industrial facilities beyond a certain age were simply not designed with robotics, automated storage, or digital technologies in mind. Any assessment of a legacy industrial building, therefore, should start with analyzing its electrical capacity and high-speed internet connectivity. Investing in service upgrades, subpanels, fiber connectivity, solar panels with battery storage, and flexible power drops can often turn an outdated structure into one that is ready to support automation and robotics.

2. Optimize layouts to suit workflows

Older industrial buildings did not have the advantage of AI-powered software solutions that could optimize every square foot to support production or warehouse processes as effectively as possible. It may be tempting to tear down walls to make more space, but first you should see what you’re working with.

Map out the current layout and compare it to your workflows to see how it will fit. Identify opportunities to reduce travel distances, eliminate bottlenecks, and safely separate people from vehicles and automated equipment.

New racking systems, automated storage equipment, mezzanines, and staging areas can often unlock unseen capacity without requiring lengthy construction to expand the building footprint.

3. Don’t forget to look outside

It’s easy to focus on how the inside of the building could limit or support your workflows, but the outside is just as important. Depending on your needs, you may discover opportunities to modernize dock doors, add upgraded docking equipment, or change the way trucks flow into or out of the yard. Some older buildings may also have unused space that you could use to expand truck/employee parking or create outdoor storage areas.

4. Improve energy efficiency

Energy efficiency improvements are probably one of the largest opportunities when retrofitting an older industrial structure. Roof improvements, insulation upgrades, upgraded windows, new HVAC systems, and energy-efficient lighting may seem simple, but they have an outsized impact on both operational reliability and overall operating costs. These simple changes can improve working conditions within the facility while also ensuring that maintenance teams are not constantly in firefighting mode trying to fix outdated, overworked equipment. These improvements also provide a strong foundation for meeting overarching sustainability goals.

5. Improvements from floor to ceiling

Heavy manufacturing and logistics operations have very different demands today than they did even 10 to 20 years ago. The condition and capability of the building’s slab will determine whether it can handle the installation of automated storage and retrieval systems (AS/RS), conveyors, advanced robotics, and high-density racking systems. Repairing, reinforcing, and flattening the slab, optimizing drainage, and preparing designated areas for equipment anchoring and heavy loads can significantly expand the capabilities of a legacy facility.

The floor should not be your only concern, however, so make sure you look up. Vertical space is becoming ever more critical in modern industrial facilities. Look for opportunities to extend and optimize vertical space to support higher racks, mezzanines, and storage systems. These types of upgrades can help to bridge the gap between an older facility and a modern build, giving occupants more flexibility to introduce automation.

“Every older industrial property has a story behind it, but age doesn’t have to mean the story is over,” says Frank Crivello, founder and chairman of Milwaukee-based Phoenix Investors. “Many of these properties have good bones and all the raw ingredients you need for your next chapter. You just need to have enough imagination to look beyond what the building was meant to do decades ago and focus on what you can change to make it work for you in the decades to come.”

The most successful adaptive reuse and retrofit projects all start with an operational question: What do we need out of this facility in the next five years? 10 years? 15?

Answer that question, and it will help you to prioritize the improvements you need to support your goals. With a good plan in place, an underutilized industrial asset can be converted into a flexible, high-performance facility without starting from the ground up.

About Phoenix Investors

Founded by Frank P. Crivello in 1994, Phoenix Investors and its affiliates (collectively “Phoenix”) are a leader in the acquisition, development, renovation, and repositioning of industrial facilities throughout the United States. Utilizing a disciplined investment approach and successful partnerships with institutional capital sources, corporations, and public stakeholders, Phoenix has developed a proven track record of generating superior risk-adjusted returns while providing cost-efficient lease rates for its growing portfolio of national tenants. Its efforts inspire and drive the transformation and reinvigoration of the economic engines in the communities it serves. Phoenix continues to be defined by thoughtful relationships, sophisticated investment tools, cost-efficient solutions, and a reputation for success.