Circular Economy

New Construction or Renovation? Weighing the Costs of a Building’s Life

Changing the focus from short-term fixes to long-term solutions will create a resilient built environment that preserves the integrity of a building's past, serves the needs of the present, and anticipates those of a sustainable future.

Brand Provided | By George West | Published 2 months ago | About a 6 minute read

Image: The Centenary Building, University of Salford | Hodder + Partners

When a university in Northern England recently announced plans to demolish its Centenary Building — a prize-winning structure celebrated less than 30 years ago as an example of “dynamic, modern and sophisticated” design — a debate erupted among architects, facility managers and sustainability professionals alike. Officials cited escalating maintenance and operating costs as rendering the building obsolete.

The lead architect on the structure, which had been named Britain’s best new building by the prestigious Royal Institute of British Architects in 1996, said that aging infrastructure was not justification for a relatively new building that could be upgraded or renovated. Historic societies also protested the demolition, as did environmentalists who cited the emissions factor in replacing the building. The question raised was, what are realistic expectations for buildings?

Reimagining older spaces to be updated, retrofitted and/or remodeled to meet modern needs can extend the lives of valuable structures and their materials. As more buildings are expected to be as dynamic as possible to meet the needs of multiple use cases (education, coworking, networking, leisure and more), what are the factors to consider in enhancing a structure’s longevity?

Rethinking the lifecycle of our buildings

Every building has a unique story defined by its location, purpose, age and community. Deciding whether to demolish or renovate is not as simple as crunching the obvious numbers on costs — how the environmental impacts of an older building’s energy inefficiencies stack up against the carbon emissions created by demolition and new construction have real-world implications. These factors should be considered when looking at what to do with buildings as they age as well as the social impacts.

Forward-thinking planners will try to balance economic realities with environmental and social benefits. A comprehensive evaluation of whether to demolish and rebuild or invest in renovation should consider the following:

Long-term energy use: How will energy consumption evolve over the building's extended lifespan?
Environmental impact: What is the ecological cost of demolition versus renovation?
Social benefits: How does the building serve its community now, and how might that role evolve as needs change?

Applying a holistic lens changes the focus from short-term financial gains to a more sustainable future that honors a building’s historic qualities and potential.

The case for renovation

Renovating existing structures provides multiple benefits, including:

Environmental and sustainability benefits: One of the most compelling arguments for renovation involves the often-overlooked concept of embodied carbon — the total carbon footprint generated by the extraction, manufacturing, transportation and construction of building materials. Embodied carbon accounts for nearly 11 percent of global carbon emissions, which can be significantly higher in regions with intensive construction activities. When a building is demolished, the embodied energy and materials are wasted. New construction triggers additional energy-intensive processes that can add up to a 30 percent increase in carbon emissions compared to retrofitting. These unaccounted-for costs often tip the scale in favor of renovation, where preserving the structure can result in markedly lower overall environmental impacts.
Energy-efficiency upgrades: Modernizing heating, cooling and lighting systems; installing insulated smart windows and upgrading exteriors can dramatically reduce energy consumption. These improvements can often be made without drastic changes to the character of an older building, and they will also lower operational costs.
Adaptive reuse: Converting outdated office spaces into residential units or mixed-use developments can spark a revitalization of urban areas and, in some cases, is a more economical choice than new construction. This strategy helps preserve the historic character of a structure while repurposing it to meet current demands, challenging the idea that a building's life is inherently finite.
Financial incentives: Many local governments now provide tax credits, zoning flexibility and other incentives to encourage the preservation and repurposing of existing structures. These benefits reflect a broader societal shift towards long-term, sustainable investments over rapid, short-sighted replacements. By choosing renovation, building managers and sustainability professionals can champion a future-oriented mindset that values resilience over disposability while significantly easing hidden environmental costs.

When new construction makes sense

Despite the many advantages of retrofitting, there are situations where new construction is the more sustainable choice:

Safety concerns: Aging buildings often contain hazardous materials including asbestos or lead or have outdated wiring; narrow, steep stairwells; and insufficient emergency exits. In such cases, the risks of updating an old structure outweigh those of constructing a new one.
Inherent design limitations: Some structures are simply too worn from years of use, uneven maintenance, and failing insulation or outdated layouts that do not meet modern energy standards or occupant requirements. In these circumstances, a purpose-built facility can start with advanced, eco-friendly technologies from the ground up — ensuring optimal performance with reduced long-term environmental impact.
Evolving community needs: When a building no longer serves current or anticipated future requirements, constructing a new facility could better serve the community. The new construction must be planned with a long-term vision that minimizes future waste and incorporates sustainable design principles from the outset.

In each case, deciding whether to raze or renovate a structure carefully balances immediate needs, long-term benefits and environmental considerations.

Sustainable tech solutions

Technological innovations are transforming building management and offering new ways to extend the life of our built environment:

Digital twins & AI modeling: Virtual replicas of physical structures allow for detailed simulations of renovation scenarios. Used in conjunction with AI analytics, these digital tools assess energy efficiency, structural integrity and environmental impact — offering managers data-driven decisions to meet specific goals.
Smart sensors & integrated systems: Intelligent sensor networks can continuously monitor and adjust building systems such as temperature and lighting in real time. These systems support a proactive approach to maintenance and energy management.
Phased renovations: Incremental upgrades allow building owners to portion out expenses over time while gaining the financial benefits of improved performance. This gradual approach minimizes disruption while making progress.
Predictive maintenance: Advanced AI tools can detect equipment failures before they happen, which helps avoid unexpected costs and downtime while prolonging the life of critical systems. This proactive strategy moves team efforts from a reactive "fix-it-when-it-breaks" approach that is both costly and labor-intensive.

There is no one-size-fits-all answer when deciding between renovation and new construction. With technological advancements, the potential to extend the life of existing structures continues to improve. Whether through smart retrofitting or carefully planned new construction, the goal is the same: to create spaces that are efficient, sustainable, and adaptable to communities' ever-changing needs. Changing the focus from short-term fixes to long-term solutions will create a resilient built environment that preserves the integrity of a building's past, serves the needs of the present, and anticipates those of a sustainable future.

George West

VP, Global Market Expansion - Atrius®, Acuity Brands

George West is Vice President of Global Market Expansion for Acuity Brands Intelligent Spaces Group where he oversees the group’s OEM, Business Development and Cloud Solutions sales teams. Prior to joining Acuity, George was a Regional Vice President and General Manager for Eaglestone Holdings.

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Sustainable Cities and Communities