Repositioning Aging Building Assets: Owner Decision Guide

Ownership & Asset Management Perspective:

Jesse Hague, Senior Director, Real Estate Management, Oxford Properties Group

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1) Primary Decision Triggers

Key Question
When you look at an aging asset, what's the first thing that goes through your mind? What typically triggers a strategic review?

Key Insights

• Financial performance is the primary driver.
• Evaluate current asset performance.
• Review the capital plan over the next 3, 5 and 10 years.
• Compare required capital investment against expected financial performance.
• Assess market demand and competing assets.
• Consider leasing challenges and tenant demand.

Notable Comments

• "When an asset stops making money, that's when it goes into serious review."
• Major upcoming capital expenditures often trigger deeper evaluation.
• Single-tenant vacancy can significantly alter investment decisions.

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2) What Separates Assets Worth Reinvesting In?

Key Question
What ultimately separates an asset worth reinvesting in from one better suited for redevelopment or disposition?

Key Insights

• Building infrastructure and condition.
• Market demand.
• Capital requirements.
• Expected financial return.
• Portfolio strategy.
• Redevelopment potential.

Examples

Marine Building

• Significant ongoing investment.
• Strong location.
• High demand.
• Continued confidence in long-term performance.

East Vancouver Example

• Continued minimal investment.
• Waiting for stronger market demand before significant reinvestment.
• Strategic decision to "limp the asset along."

Notable Comments

• Market demand may ultimately be the largest determining factor.
• Portfolio strategy often outweighs the individual building itself.

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3) Lessons Learned

Key Question
Looking back over your career, what project taught you the most?

Example
Office-to-Life Sciences Conversion

Key Learnings

• Allow significantly more planning time than anticipated.
• Engage consultants early.
• Evaluate the building holistically.
• Understand long-term ownership objectives before investing.

Notable Comments

• A five-year ownership horizon may not justify major capital investment.
• Longer-term ownership changes the investment equation.

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4) Risks of Waiting Too Long

Key Question
Have you seen owners wait too long to act?

Key Insights

• Lost leasing opportunities.
• Competing landlords attract desired tenants.
• Reduced flexibility.
• Reactive rather than strategic decision making.

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5) Advice to Building Owners

Key Question
If another owner called you tomorrow asking where to begin, what would you tell them?

Suggested Evaluation Framework

• Vacancy outlook.
• Tenant renewal likelihood.
• Complete building condition assessment.
• Capital expenditure forecast.
• Market demand.
• Rental projections.
• Sale/redevelopment opportunities.
• Total ownership costs.

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6) Common Mistakes

Key Question
What mistakes do owners most commonly make?

Key Insights

• Compartmentalizing decisions.
• Treating isolated building issues independently.
• Missing opportunities to combine projects.
• Focusing on immediate repairs instead of long-term strategy.

Example
Roof replacement completed independently rather than evaluating broader building strategy.

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7) One Message to Owners

Key Question
If attendees leave with one takeaway, what should it be?

Key Message
Start planning early.

Develop a long-term strategic plan and evaluate multiple scenarios before major issues force a decision.

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Engineering Perspective:

Leonard Pianalto, Managing Principal, RJC Engineers

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1) What Prompts the Call?

Key Question
When you're first brought into an aging building, what typically prompts that conversation?

Key Insights
Owners typically engage an engineer for one of the following reasons:

• An existing relationship where RJC is already supporting the asset.
• A specific building issue has emerged (e.g. roof leaks, structural deficiencies, façade concerns).
• A building condition assessment or capital planning exercise.
• A pre-purchase or pre-sale due diligence assessment.

Engineering Approach
Engineering recommendations are prioritized based on:

• Severity of the issue.
• Risk to the building or occupants.
• Expected timeframe for repair.

Recommendations are generally categorized into:

• Immediate action.
• 1-year horizon.
• 5–10 year capital planning.

Notable Comments

• Existing relationships allow engineers to help owners think proactively through long-term asset management.
• Building condition assessments often become the foundation for future capital planning.

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2) Engineering's Role in Strategic Decision-Making

Key Question
How do you help owners move from solving isolated problems to making broader strategic decisions?

Key Insights
Consulting engineers need to remain within their area of expertise.

Their role is to:

• Assess technical conditions.
• Identify risks.
• Recommend investigations or repairs.
• Provide engineering judgement.

Ownership decisions regarding investment, redevelopment, or disposition remain with the owner.

Notable Comments

• "As a consulting engineer, you have to stay in your lane."
• Unless there is an immediate public safety concern, engineering recommendations are typically communicated through the property manager or owner.
• Sometimes an assessment reveals that conditions are actually better than originally expected, avoiding unnecessary work.
• Where isolated issues may indicate a larger systemic concern, a more detailed investigation is recommended before drawing conclusions.

Key Takeaway
Engineering provides objective technical advice that informs ownership decisions—it does not make financial recommendations.

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3) Long-Term Capital Planning

Key Question
How does engineering support long-term planning?

Key Insights
Engineering judgement is critical when forecasting deterioration.

Not all deficiencies follow predictable timelines, requiring professional judgement to determine:

• Immediate priorities.
• Medium-term repairs.
• Long-term capital planning.

Typical planning horizons extend:

• 10 years.
• 15 years.
• 20 years.

Real-World Example
A building near RJC's office experienced falling brick from the façade.

• Repairs were identified.
• COVID delayed the project.
• Five years later, recladding was being considered instead.
• Because repairs had not proceeded, RJC documented the outstanding safety concerns and advised that authorities may need to be notified if conditions continued to deteriorate.

Notable Comments
The owner's intended holding period has a significant influence on engineering recommendations.

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4) Vancouver's Regulatory Environment

Key Question
What do owners most misunderstand about operating aging buildings in Vancouver?

Key Insights
Sophisticated owners generally understand the value of maintaining their buildings.

Challenges often arise when:

• New tenant improvements trigger additional code requirements.
• Window replacement or other upgrades activate broader municipal requirements.
• What begins as a maintenance project expands into a more significant regulatory exercise.

Notable Comments
Owners are often surprised that relatively straightforward work can trigger additional code obligations and approvals.

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5) Lessons from Experience

Key Question
Looking back over your career, what has been most impactful?

Key Insights
Rather than identifying one specific project, Leonard reflected on the cumulative experience of working on large, complex landmark buildings.

These projects typically involve:

● Multiple stakeholders.
● Numerous technical disciplines.
● Long planning horizons.
● Significant coordination and communication.

Key Takeaway
The larger and more complex the project, the more important early planning and stakeholder coordination become.

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6) Final Message to Owners

Key Question
If attendees leave remembering one thing, what should it be?

Key Message
Expect the unexpected.

Existing buildings are inherently complex, and unforeseen conditions will almost always arise during investigations or construction.

The best way to manage uncertainty is through:

• Early planning.
• Thorough investigations.
• Realistic expectations.
• Flexibility throughout the project.

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Municipal & Regulatory Perspective:

Kevin Lau, Chief Building Official, City of Vancouver

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1) Early Engagement with the City

Key Question
When an owner is considering a major renewal or repositioning project, when should the City become part of that conversation?

Key Insights
Owners should engage with the City as early as reasonably possible for significant projects, but productive engagement requires preparation.

Before approaching the City, owners should:

• Develop a reasonably defined project scope.
• Understand the existing condition of the building.
• Review applicable regulations for existing buildings.
• Retrieve and review historical building plans where appropriate.
• Identify potential issues such as previous unpermitted work.
• Develop an understanding of the building's seismic performance.

Notable Comments

• Simply approaching the City with a broad question about what can be done with a property is generally less productive.
• A clearly defined scope allows City staff to provide more specific guidance.
• Early due diligence can help identify potential regulatory issues before they become project problems.

Key Takeaway
Engage early—but come prepared.

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2) Consequences of Engaging Too Late

Key Question
What happens when owners engage the City too late in the process?

Key Insights
Waiting until the permit application stage can expose requirements that weren't incorporated into the original project plan.

This can result in:

• Unexpected upgrade requirements.
• Project delays.
• Budget implications.
• Difficulty finding viable solutions once design decisions have already been made.
• Increased pressure on project teams.

Key Takeaway
Municipal requirements should be considered during project planning—not after the project has already been designed.

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3) Scope of Work & Regulatory Triggers

Key Question
What should owners understand about projects that trigger additional building requirements?

Key Insights
A clearly defined scope is critical.

Owners sometimes worry that undertaking one improvement will cause requirements to cascade throughout the entire building.

The City's intent is not necessarily to create this type of uncontrolled "scope creep."

Instead:

• The nature and extent of the proposed work matter.
• Existing building conditions need to be understood.
• Bylaws provide pathways that can allow existing construction to remain where applicable requirements are satisfied.
• The earlier these considerations are understood, the better positioned the project team is to determine an appropriate path forward.

Key Takeaway
Understand the regulatory implications of the scope before committing to the scope.

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4) Common Regulatory Surprises

Key Question
What requirements most commonly surprise building owners?

Key Insights
Two areas frequently create challenges:

• Structural requirements.
• Accessibility requirements.

A significant misconception is that existing conditions are automatically "grandfathered."

Changes to how a building is used can trigger current requirements.

Example
Increasing occupant load may require the building's exiting system to comply with current requirements because the change is considered new work rather than simply the continuation of an existing condition.

Key Takeaway
Existing does not necessarily mean exempt.

Owners need to understand how proposed changes may alter the regulatory requirements applying to the building.

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5) Existing Buildings & Guide 11

Key Question
How should owners think about the existing-building regulatory framework and Guide 11?

Key Insights
Existing-building regulations and Guide 11 help provide a framework for integrating new work into older buildings.

The objective is to balance:

• Existing construction.
• New improvements.
• Current safety requirements.
• Building performance.

Owners should think of buildings as dynamic assets rather than static structures.

As buildings age and uses change, investment will be required to extend their useful lifecycle.

Key Takeaway
The regulatory framework isn't simply about bringing every existing building immediately to new-building standards. It provides pathways for managing improvements within the realities of existing construction.

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6) Planning & Municipal Capacity

Key Question
Does every project require early engagement with the City?

Key Insights
Not every maintenance or renewal project requires extensive early consultation.

Early engagement becomes particularly valuable for projects involving:

• Major occupancy changes.
• Significant building modifications.
• New structures or additions.
• Complex existing-building conditions.

The City also operates within finite staffing and processing capacity.

Last-minute applications cannot necessarily be accelerated simply because an owner's project schedule has become urgent.

Key Takeaway
Allow sufficient regulatory and permitting time within the overall project schedule.

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7) Seismic Risk & Proactive Upgrades

Key Question
Where does seismic risk fit into the conversation around aging buildings?

Key Insights
Seismic performance remains an important consideration for Vancouver's existing building stock.

Current regulatory authority can limit when the City can require seismic upgrades, particularly where an owner has not initiated other work.

However, owners can take a more proactive approach through voluntary improvements.

Potential Benefits
Proactive seismic upgrades may:

• Improve the long-term performance of the asset.
• Increase rentability.
• Reduce the likelihood of future upgrades occurring incrementally through subsequent tenant improvements.
• Allow owners greater control over the timing and planning of improvements.

Key Takeaway
Waiting until an upgrade is triggered isn't necessarily the most effective asset strategy.

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8) Future Regulatory Direction

Key Question
How will the approach to existing buildings evolve over the next five to ten years?

Key Insights
There is increasing recognition of the unique challenges associated with Canada's existing building stock.

National codes are beginning to incorporate more specific provisions for existing buildings.

The broader direction is toward:

• More proactive lifecycle management.
• More practical approaches to existing buildings.
• Better integration of upgrades over time.
• Less reliance on reactive intervention.

Key Takeaway
Owners should expect the regulatory environment surrounding existing buildings to continue evolving.

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9) Final Message to Owners

Key Question
If attendees leave remembering one thing from the City's perspective, what should it be?

Key Message
Don't treat building improvements as an afterthought.

Building condition, regulatory requirements, future improvements, and potential upgrades should be incorporated into the project planning process from the beginning.

Doing so creates better alignment between:

• Ownership objectives.
• Engineering requirements.
• Construction planning.
• Municipal requirements.

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Building Renewal & Contractor Perspective:

Heinrich Schoeman, Managing Director, WCP Building Renewal

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1) Where Should Owners Start?

Key Question
When an owner says, "I know my building has issues, but I don't know where to start," what's your advice?

Key Insights

• The biggest differentiator is proactive planning versus reactive response.
• Emergencies, such as active leaks, put owners in a position where they're reacting rather than making strategic decisions.
• Building maintenance and capital planning should be ongoing so that major projects are anticipated—not surprises.

Recommended Approach

• Complete regular maintenance.
• Conduct ongoing assessments.
• Develop a 3-, 5-, and 10-year capital plan.
• Begin planning major work approximately one year before construction.

Notable Comments

• "When the work comes up, it shouldn't be a surprise—we knew this was coming."
• "Planning ahead allows you to budget, assemble the right team, and execute on your timeline rather than someone else's."

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2) Information Owners Should Have

Key Question
What information do you wish every owner had before they called?

Key Insights

• Previous maintenance history.
• Building condition reports.
• Records of previous repairs.
• Understanding of known building issues.

Notable Comments

• Owners are often unsure of the building's true condition.
• Good documentation leads to better decision-making and more accurate recommendations.

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3) Common Mistakes

Key Question
What mistakes do owners most commonly make before projects begin?

Key Insights

• Waiting too long to begin planning.
• Rushing decisions.
• Underestimating project timelines.
• Making assumptions instead of gathering information.

Behaviour to Change
Plan earlier than feels necessary.

Notable Comments

• "Construction always takes longer than people think."
• Leaving planning too late often results in compromised contractor selection and poorer project outcomes.

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4) Building Renewal Strategy

Key Question
How do you help owners determine the right path forward?

Key Insights
Every project is unique.

Consider:

• Building age.
• Current condition.
• Location.
• Owner objectives.
• Budget.
• Desired ownership horizon.

Examples

• One owner may want another five years from the asset.
• Another may be planning to hold for twenty-plus years.
• Major capital requirements may shift the discussion toward redevelopment.

Notable Comments

• Building renewal isn't standardized; it's customized to both the asset and the owner's goals.
• Sometimes repair is technically feasible but not financially sensible.

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5) Lessons from the Field

Key Question
Looking back, what project taught you the most?

Example
Grand Villa Casino

Key Learnings

• Began as a painting project.
• Expanded into a comprehensive building renewal involving:
  • Concrete repair.
  • Sealants.
  • Broader envelope work.

Success Factors

• Consistent communication.
• Strong coordination.
• Alignment among numerous stakeholders.

Notable Comments

• Communication built trust.
• Trust created continuity.
• Continuity allowed the project to evolve successfully.

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6) Practical Advice

Key Question
If an owner didn't know where to begin, what would you tell them?

Recommended Starting Point
Conduct a comprehensive building assessment.

Understand:

• Current condition.
• Remaining service life.
• Existing deficiencies.
• Future capital requirements.

Notable Comments

• Remove assumptions.
• Replace assumptions with facts.

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7) Tenant Retention

Key Question
How does proactive renewal influence tenant retention?

Key Insights

• Well-maintained buildings retain tenants more effectively.
• Deferred maintenance creates frustration.
• Compromised building systems reduce tenant confidence.

Notable Comments
Planning allows owners to:

• Budget effectively.
• Execute improvements strategically.
• Maintain a competitive asset.

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8) One Message to Owners

Key Question
If attendees leave remembering one thing, what should it be?

Key Message
Planning matters.

Be more proactive than you think you need to be.

Even if planning feels unnecessarily early, it provides flexibility, better decisions, and stronger project outcomes.

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