Adaptive Reuse in Holly Springs: Turning Underutilized Buildings into Residential, Studio, or Mixed-Use Spaces

Adaptive reuse—repurposing an existing building for a new use—can be one of the most interesting (and sometimes most financially efficient) development plays in a fast-growing town like Holly Springs. Instead of starting from scratch, you take what already exists—an older office, a small retail strip, a light industrial/flex building, a former church, an underused warehouse-style shell—and convert it into something the market needs now: loft-style residential, creative studios, wellness/medical suites, or vertically integrated mixed-use with retail on the ground floor and apartments above.

In Holly Springs, the adaptive reuse conversation is getting louder for a few reasons:

• The town is growing rapidly (population estimate 48,674 in 2024).

• Downtown is being planned intentionally for redevelopment and a more “village” environment (Downtown Area Plan approved December 2023).

• Major job investment and in-migration are widening the range of housing and commercial needs.

• The Town has formal tools and incentives aimed at stimulating downtown investment (Downtown Investment Grants policy updated in 2024).

This article lays out how adaptive reuse works in practice in Holly Springs: feasibility, entitlements, economic modeling, and how a Realtor can source and package these deals for both investors and owner-users.

1) What “Adaptive Reuse” Looks Like in Holly Springs

Holly Springs isn’t a legacy mill town with rows of vacant factories. Adaptive reuse here is often smaller-scale and more targeted—think:

• Downtown and near-downtown conversions: older commercial buildings turned into boutique offices, studios, or “retail + services” with upgraded façades and interiors—aligned with the Downtown Area Plan vision.

• Underutilized office/retail: partially vacant buildings where layout, parking, and access could support a conversion to medical, wellness, creator studios, or destination services.

• Flex/light industrial repositioning: converting low-intensity industrial shells into higher-value “maker space,” photography/video studios, specialty fitness, or showroom-style uses (where zoning allows).

• Mixed-use redevelopment or vertical integration: new or reconfigured buildings where upper-story apartments sit above ground-floor non-residential uses—an approach explicitly contemplated in Holly Springs’ UDO language for non-residential districts.

Adaptive reuse is attractive because it can sometimes deliver:

• faster “time to market” than ground-up (depending on entitlements)

• a unique product buyers/tenants can’t easily find in suburban new construction

• stronger placemaking value downtown (character matters)

But it’s not automatically cheaper—and the feasibility work is where projects either become smart… or become expensive.

2) Feasibility: The Real Checklist Before You Fall in Love With a Building

Adaptive reuse feasibility is basically four questions:

A) Can the building physically support the new use?

Key physical constraints that often decide the deal:

• Structural grid and spans: Residential and studio uses often need different wall layouts than office/retail. Wide-open structures can be easier; tight grids can be expensive.

• Floor-to-floor height: Lofts, studios, and mixed-use benefit from higher ceilings; mechanical routing also gets easier.

• Building envelope condition: roof, windows, water intrusion, masonry—these can quietly become your biggest line items.

• Loading, access, and acoustics: Especially for studios (music, creator, fitness), sound attenuation can be a make-or-break cost.

B) Can utilities handle the new intensity?

Conversions often need:

• upgraded electrical service

• new plumbing distribution (residential adds lots of wet walls)

• HVAC redesign (zoned systems vs one big unit)

• fire protection upgrades

C) What does code require when you change occupancy?

North Carolina’s building code framework is explicit that a change in occupancy can’t happen without a revised occupancy permit issued by the building official.
Practically, this means when you convert (say) office → residential, you should expect:

• new life safety requirements (egress, fire ratings, sprinklers/alarms)

• accessibility considerations

• sometimes structural or load-related verification

A “change of use” is also a defined concept under the NC Existing Building Code context; even if two uses are in the same occupancy classification, a change of use can still trigger review.

D) Is there environmental or legal baggage?

Common risk items:

• old underground storage tanks (site history matters)

• asbestos/lead (especially older buildings)

• easements, shared parking agreements, access constraints

• nonconforming site elements (setbacks, parking, signage)

Holly Springs’ UDO includes a full section on nonconforming situations, which is exactly where you’ll land if you’re reusing older sites that don’t match today’s standards.

3) Entitlements: Zoning, Process, and the “Downtown Advantage”

In adaptive reuse, entitlements are often more important than construction. A perfect building is useless if the new use is not permitted—or requires a long discretionary process with uncertain outcomes.

A) Start with the Town’s UDO and district intent

Holly Springs’ Unified Development Ordinance (UDO) is the central rulebook for permitted uses, standards, and procedures.

A critical point for mixed-use style reuse: the UDO language indicates that in non-residential districts, apartment dwellings are typically permitted only when located on upper stories within a vertically integrated mixed-use building, unless an alternate configuration is approved via Conditional Zoning.

So if your adaptive reuse concept includes residential, your feasibility work must include:

• which zoning district you’re in

• whether your layout fits by-right rules

• whether you need a conditional or rezoning path

B) Downtown planning context matters

The Town’s Downtown Area Plan (approved December 2023) is a major indicator of where the Town wants redevelopment and what form it should take. It’s not the same as zoning, but it’s powerful context for:

• pre-application meetings

• rezoning arguments

• investor confidence

• neighborhood expectations

In adaptive reuse deals, being able to say “this concept aligns with the Downtown Area Plan’s redevelopment direction” can materially improve the odds of cooperation and smoother review.

C) Use Town tools to reduce entitlement risk

Holly Springs makes process navigation easier than many municipalities:

• CityView Development Services Portal: apply for permits, check statuses, request inspections, upload documents.

• Permit Tracker: status tracking with typical turnaround times (UDO permits ~5–10 business days; building permits 10–15 days for first comments in non-residential contexts).

• Development Activity / Interactive Development Map: view proposed/approved/under construction projects and understand pipeline context around your site (helpful for tenant mix, parking assumptions, and future traffic).

D) Incentives can be part of the entitlement strategy

Holly Springs has a formal Downtown incentive framework:

• The Town notes Downtown Development Investment Grants are available to stimulate development—potentially assisting with infrastructure costs and fee reductions, considered case-by-case.

• The Downtown Investment Grant policy document outlines that the Town may share in expenses related to public infrastructure and (in some cases) tenant upfit costs, again on a case-by-case basis.

On the state side, North Carolina also has “building reuse” funding tied to economic development objectives (not a fit for every project, but worth knowing when a project is job-creation oriented).

4) Economic Modeling: How Adaptive Reuse Pencils (or Doesn’t)

Adaptive reuse underwriting has one rule: you model it like a business, not like a house flip. The project has to clear debt service, reserves, and a realistic vacancy/lease-up period.

Here’s the core pro forma stack:

A) Acquisition + basis

• Purchase price (or land/building value if owner-user)

• due diligence costs (survey, engineering, environmental)

• closing costs

B) Hard costs

• demolition and selective demo

• MEP upgrades (mechanical, electrical, plumbing)

• fire/life safety

• envelope repairs (roof/windows/masonry)

• interior buildout (units or suites)

• sitework and parking changes

C) Soft costs

• architecture/engineering

• permitting/impact fees

• legal (leases, zoning, formation)

• financing fees + interest reserve

• developer fee (yes, even small projects need one if you’re modeling correctly)

D) Revenue assumptions: match product type to real demand

Residential conversion:

• rents or sales prices must reflect what the market will pay for a different kind of product (loft/character).

• leasing risk increases if the product is too niche, but can outperform when executed well near downtown destinations.

Studio/creative:

• stronger rents sometimes, but tenant churn and buildout specificity can be higher.

• soundproofing and HVAC can increase costs.

Mixed-use:

• don’t assume retail leases like apartment leases. Retail absorption depends on tenant mix, parking, visibility, and foot traffic—plus the town’s placemaking efforts downtown.

E) Lease structure impacts NOI (and therefore valuation)

For the commercial portion of a mixed-use or studio project, lease type changes everything:

• In NNN (triple net) structures, tenants typically pay base rent plus taxes, insurance, and maintenance/operating costs, shifting expense risk away from ownership.

• In gross or modified gross structures, more expense risk stays with the landlord, but tenants may accept higher all-in rent in exchange for predictability.

Why this matters: The same building can underwrite very differently depending on how you structure expense recovery.

F) Exit value and cap rates (be conservative)

Adaptive reuse can command a premium when it creates a “one-of-one” asset downtown. But lenders and buyers still care about:

• stabilized NOI

• tenant quality and lease length

• remaining capital needs

• functional obsolescence risk

If you’re modeling a refinance, don’t assume perfect stabilization—build in vacancy and replacement reserves.

5) How a Realtor Sources and Packages Adaptive Reuse Deals in Holly Springs

A strong Realtor in this niche acts less like a tour guide and more like a project quarterback—sourcing opportunities, stress-testing feasibility, and presenting the deal in a way lenders, partners, and the Town can evaluate quickly.

A) Sourcing: where the opportunities actually come from

Adaptive reuse inventory is rarely sitting neatly on the MLS with a bow on it. A local Realtor typically finds these deals through:

1. Underutilization signals

• high vacancy, outdated tenant mix

• “too much parking” for the current use

• owner fatigue (long-held property, minimal reinvestment)

• buildings in areas with rising land value vs stagnant income

2. Town mapping and pipeline context

• Use Development Activity tools to understand where momentum is building and where complementary projects are landing.

3. Permit intelligence

• Search permits by address to see patterns: repeated small repairs, stalled projects, or prior change-of-use attempts.

4. Network-based discovery

• local business owners, contractors, property managers, and attorneys often know which buildings are “quietly available.”

B) Packaging: what goes into a credible adaptive reuse deal memo

To get serious attention (and better terms), a Realtor helps assemble a tight package:

• Concept narrative: “What is it now, what can it become, and why here?” (tie back to Downtown Area Plan where relevant)

• Zoning + use path: by-right vs conditional zoning; nonconforming issues flagged early

• Process plan: CityView/Permit Tracker steps, estimated review windows

• Back-of-napkin pro forma: sources/uses, rent comps, stabilization timeline

• Incentive angle: whether the project could qualify for Downtown Investment Grants

• Risk register: what could blow the budget (MEP, roof, code triggers, environmental)

This isn’t overkill—it’s how you turn “interesting building” into an investable opportunity.

C) Deal execution: how tenant-rep and owner-rep skills show up

On the tenant side, a Realtor helps emerging concepts (studios, wellness, boutique operators) evaluate whether a conversion space fits their business—parking, access, buildout costs, lease structure, and timeline.

On the owner/investor side, a Realtor helps owners decide:

• lease-up strategy vs conversion strategy

• highest and best use under current zoning vs rezoning

• how to stage the project (phase 1/phase 2) to reduce capital exposure

In both cases, the Realtor’s job is to prevent the most common adaptive reuse failure: discovering fatal issues after money is spent.

6) Where Adaptive Reuse Demand May Focus Next in Holly Springs

While each deal is site-specific, adaptive reuse interest tends to cluster where three things overlap:

1. Policy support / planning momentum (downtown plan direction)

2. Incentive tools that improve feasibility (Downtown Investment Grants)

3. Rising land value + changing consumer behavior (more desire for walkable experiences, local studios/services, mixed-use convenience)

Downtown-oriented reuse can also benefit from the “place premium” that comes when streetscape and event programming mature—exactly the kind of framework a Downtown Area Plan is meant to guide.

Bottom line

Adaptive reuse in Holly Springs isn’t just a creative design trend—it’s a practical response to growth, limited “interesting” inventory, and a downtown vision that supports redevelopment. Done right, reuse projects can produce unique, high-demand spaces and create real value. Done wrong, they can turn into expensive puzzles.

For anyone looking to buy a home in Holly Springs, NC, Be Sunshine Realty Group—brokered by eXp and led by Brandy and Lance Nemergut—offers the local expertise and personal attention that make finding the right home smoother and more successful.