Living in a warehouse is something you do only if you’re very poor or very rich.


Recently, real estate investors have been transforming old warehouses into luxury homes and apartments with a rustic feel, the Wall Street Journal reported. It has become enough of a trend that there’s even a magazine specifically about warehouse homes. Warehouse conversion is a challenging and expensive process but one that has produced some beautiful homes.


You might wonder if this is a technique to save money, renovating an old building instead of building a new one, but in reality, converting a warehouse is sometimes more expensive, the Domain Group reported.


“Don’t assume that working within an existing shell will be cheaper than starting from scratch – this is not always the case,” they said.


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Not only is it expensive but it’s also difficult. As the Wall Street Journal said, “the conversions come with countless challenges. Office or industrial buildings don’t have the same plumbing, window or wall placement as a home. The wide-open layouts and exceedingly high ceilings that often make such spaces appealing can be difficult to tackle. Then there are the surprises that come up along the way, like lead paint, asbestos tiles or unstable foundations that can make costs hard to predict.”


They even quoted an architect, Jim Poteet, who said, “In many of these projects, the owner says halfway through, ‘We should have torn this down,’”


So why do people do it? The same architect answers: “You don’t do it for the economy that the existing building provides. You do it for the character.”


Just looking at the pictures of some of these converted warehouses, it’s easy to see what he means. The wide spaces and exposed brick are beautiful. These homes have a unique style that others don’t. Additionally, many of these buildings are old and were built in the Victorian Era when the architecture of even warehouses was ornate, according to CNN.


Additionally, CNN reported that warehouse homes can help with overpopulation. With the industrial revolution behind us, we don’t need as many warehouses as we used to (and many old ones are now empty), but with more and more people moving into cities, we do need more housing. In New York, for instance, an old meatpacking district was transformed into an entertainment and shopping area.


Maybe you have an empty warehouse that could be converted. Maybe you’re considering buying one to convert. If so, what should you do?


How to Finance Warehouse Conversion


Warehouse conversions aren’t cheap. Unless you’re very rich, you may have to borrow money. According to Home Loan Experts, an Australian mortgage broking company, banks can be cautious with warehouse conversions since they’re often in industrial areas and lack wide-appeal because of their unusual design.


According to Legal Beagle, “If the warehouse is zoned for commercial use, you may have to get a commercial loan – even if the city gives you a zoning variance.” This means often means more money but at a larger interest rate.


Warehouse Design and Layout


An important question is how you’re going to divide the space. Are you going to make multiple rooms or utilize a primarily open layout? An article from Domain Group said, “Some buyers choose to embrace the original open-plan style layout, utilizing clever design to minimize noise, without the need for walls or hallways.” Dividing the space can make heating and air conditioning easier.


You’ll also have to decide whether to turn the warehouse into one home or multiple apartments that you can rent out to people. Consider space and cost.


Some designers enjoy pairing modern design within the old-style structure for a unique contrast. Domain Group quotes one designer who said, “Crisp contemporary detailing of the new elements always looks great against old brick walls, steel window framing, and trusses… surprising garden and courtyard spaces within warehouses are great too.” Converted warehouses can have a design and aesthetic all their own.


Warehouse Conversion Legality


According to Legal Beagle, “You can renovate and live in a warehouse if the property is exclusively or partially zoned for residential. Many warehouses are industrially zoned, however, so you likely will need a zoning variance.” 


Variance is essentially a waiver to use the property in a way the zoning laws would normally prevent. There will be a long process where you’ll have to convince the zoning board to allow you to convert the warehouse.


Another hurdle is that “a commercial appraiser has to look at other properties with commercial zoning, then show that your proposed residential usage will not negatively impact the commercial value.” 


Additionally, “When going from commercial to residential, the home you’re creating will have to be brought up to residential building codes. That likely means rehabilitating plumbing, electrical, heating and fire protection systems. It could also mean replacing windows and elevators.” Don’t cut corners. Speak to a real estate investor who can help.


According to the New York Times, “Most conversions require construction changes to meet code. Some even require changes buildingwide.”


Due to the complexity of conversion, they recommend consulting with an expert.


Warehouse conversion can be difficult and expensive, but the results can be breathtaking.


CNN quoted another architect who said, “For architects, it’s an opportunity to create new elements inside an old structure. Keep alive the history of these amazing places.”


If you have a warehouse, DCS Innovations can help you with systems and design. We specialize in warehouse ops, design, and automation. You’ve invested a lot in your warehouse. Let us help you ensure it runs as efficiently as possible.


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