Adaptive reuse has been garnering headlines for more than a decade, but it is no longer only about repurposing beautiful, historic properties in primary markets to entice millennials. Many less-attractive but equally newsworthy projects are starting to appear in lower-priced secondary and tertiary markets, where investors see adaptive reuse as a driver of net operating income and yield.

For institutional and private commercial real estate investors, adaptive-reuse projects offer a compelling way to countervail soaring construction costs and move up the risk curve to generate higher yields.

We predict adaptive-reuse projects will make up a greater percentage of investment activity than self-storage and other established noncore property types by 2023. But the commercial real estate industry’s understanding of this property segment is not keeping up with this growth, and capital will not flow to what it cannot measure, monitor and manage. The absence of a clear definit