Cutting Edge Insights
with Dr. Lee

Nerdiness in a Commercial Rebuild

A commercial remodel is supposed to be fun, right? Let’s pick out the paint and floor colors and styles, and fine-tune the floor plan…I mean, the structure has already stood the test of time for over 40 years, so it’s tried and true, right?

Guess again.

The usual protocol in construction is to take the quickest (also pronounced “cheapest”) path to completion.

40 years ago, codes were different. Energy was relatively cheap. Materials and labor were cheap. Or cheaper than they are in 2023.

We didn’t pay $1,000,000 for this building. We won’t even be at $1,000,000 after the remodel. But it’s going to be worth well over $1,000,000 when we’re done with it. As an aside, we were offered something close to $1,000,000 by a major restaurant chain shortly after we bought it. We declined because 1) over the next couple decades, the value is going to vastly exceed that and 2) the “location, location, location” mantra of real estate told us that this was indeed the best and only appropriate location for our medical tenants.

A component of the value of anything is the cost required to operate it. If you have lower utility bills, it’s worth more both to a tenant and to an owner-occupant.

If you have a structure with a robust thermal envelope and you minimize air leakage and you provide a path for drying potential, you won’t have to worry about mold in walls and your occupants will be comfortable.

The former concept, “mold in walls”, is probably not something that keeps you up at night, and it shouldn’t. But rehabbing an existing structure gives you that potential if you’re not careful.

The latter concept, “comfortable occupants”, should be high on any building owner’s list of priorities. Comfortable occupants means no whining from staff or patients in a health care facility of “it’s too cold” or “it’s too hot”.

And “robust thermal envelope” also means that hey, we can indeed utilize the two existing high-efficiency condensing furnaces for the larger, 5,000 square foot suite and don’t have to purchase new furnaces!

Installing 1” of sheet foam insulation interior to the existing wall and then building a 2×6 wall interior to that represents an extra cost. We need new interior drywall anyway, so that’s not a variable. But the cost of the insulation, studs, blown in insulation in the 2×6 cavity all told could approach or even exceed $25,000. Sounds like a lot, but it’s pennies when amortized over decades of owning and operating an 8,000 square foot building.  The lower utility bills should break us even on this detail in 4-5 years.

Caveats to the video:

  1. I’m probably going to remove some if not all of the laminated drywall and maybe also some of the wainscoting so the wall can further “dry to the inside”. Laminated drywall is a stupid thing in hot/humid climates, and while Climate zone 5A where we’re located isn’t hot/humid by anyone’s understanding, it can get hot and humid in the summer. The lamination on the interior surface prevents drying to the interior and probably would serve as a condensing surface to inward-leaking air carrying moisture. We may have to remove it and replace with ½” shims.
  2.  I said “dense packed cellulose” in the video, but in all likelihood it’s going to be dense-packed fiberglass mainly because our preferred installer uses fiberglass. Properly installed, both products perform very well. I wouldn’t use “wet-installed” cellulose in a retrofit such as this (but it would be safe in a new build) due to unknown areas of air and thus moisture leakage. But dry-installed dense packed cellulose or fiberglass should perform equally well. Although there is still some concern from a few about cellulose growing mold, it’s treated with boric acid which both resists mold growth and is a fire-retardant.

In the oldest parts of the building, we’re adding R-30 of thermal resistance to (in my estimation) an existing R-1 wall.  In the newer parts of the building, we’re adding this to perhaps R-8 (again, an estimation).

As I’ve said before, the words “by” and “others”, as in “wall assembly details to be provided by others” are the two most dangerous words in the English language when used together.

They will cost you money and they make your life miserable.

However, if one has a working knowledge of building science principles, one does not have to have a degree in architecture to make appropriate choices and recommendations to a client, friend, etc. who is embarking on a major rebuild…nor is one ever made to feel ignorant by general contractors and tradespeople, especially those who feel that the owner can’t possibly be well-versed in aspects of building and construction.

My guess is that we all had a science class in school.

Until next time,

Dr. Lee Newton

How A Doctor Learned To Develop Real Estate

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