umbauen
to remodel
To structurally change, renovate, or redesign a building or room. In this meaning, the verb is separable (baut um).
Wir lassen die alte Scheune zu einem Wohnhaus umbauen.
We are having the old barn converted into a house.

to remodel / surround
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to remodel
To structurally change, renovate, or redesign a building or room. In this meaning, the verb is separable (baut um).
Wir lassen die alte Scheune zu einem Wohnhaus umbauen.
We are having the old barn converted into a house.

This verb has two forms with different meanings. The separable form 'umbauen' (stress on 'um') means 'renovieren' (to renovate/remodel). The inseparable form 'umbauen' (stress on 'bau') means 'mit etwas umgeben' (to surround with something) and is much rarer.
Die Familie baut ihr altes Haus um.
The family is remodeling their old house.
In the common meaning 'renovieren' (to renovate/remodel), the verb is separable. The prefix 'um' goes to the end in a main clause. In subordinate clauses or with modal verbs, the verb stays together.
Wann baut ihr endlich das Badezimmer um?
When are you finally remodeling the bathroom?
In the meaning 'renovieren' (to renovate/remodel), the verb is often used for buildings and rooms. Typical objects are 'ein Haus' (a house), 'eine Wohnung' (an apartment), 'die Küche' (the kitchen), or 'das Büro' (the office).
Die Firma hat die alten Büros komplett umgebaut.
The company completely remodeled the old offices.
to surround
'umgeben' and 'umbauen' can be very similar in one special meaning: something is located or built all around something else. 'umgeben' is the normal and general word for this. 'umbauen' here means more specifically that a structure surrounds something, for example a wall or a building around a courtyard. This meaning of 'umbauen' is not the same as 'ein Haus umbauen' (to remodel a house). As a memory aid: 'umgeben' is general, while 'umbauen' only fits when something is actually built.

Eine hohe Steinmauer umbaut den Innenhof.
A high stone wall surrounds the courtyard.
Ein dichter Wald umgibt das alte Haus.
A dense forest surrounds the old house.