DBRS Explores How Historic Buildings Affect Property Markets

DBRS, Inc. (DBRS) published the commentary “The Classic Appeal of Historic Buildings.”

As far as real estate goes, the mentality is often that a newer building is a better building. On the other hand, some buildings constructed before 1950 are considered to be desirable properties with character.

DBRS found that
-- Most pre-1950s buildings struggle to compete with newer buildings, especially if they are office or industrial buildings.
-- Hotels and some retail properties may be able to take advantage of a heritage building designation.
-- The historic character of some buildings, like Toronto’s Distillery District and Chicago’s Civic Opera Building, actually make them stand out from their competitors.

The age of a property greatly influences how well it will perform in its respective market. Some management teams have found a way to benefit from their older assets, whereas the value of other properties declines markedly with age.

Note:
A full copy of this commentary is available by contacting us at info@dbrs.com.