In the fast-paced world of commercial real estate, many investors understand that high returns don’t just come from a signature on a lease agreement. On the contrary, successful property owners are business savvy with a drive to invest large sums of time and money in order to reap high returns down the road.
Whether you’re attempting to attract potential tenants or appeal to prospective buyers, take a look at our quick list of tips to increase the value of commercial property — you’ll thank us later.
Cleanup the place.
First and foremost, it’s your responsibility as the property owner to make structural and cosmetic improvements, both inside and out. You’ll need to cater improvements to the needs of your tenants, whether they’re retail businesses, multi-family residents or a large industrial operation.
Avoid getting these upgrades confused with routine maintenance. Structural and cosmetic improvements can come in the form of an upgraded parking lot or polished lobby for a commercial retail space or new appliances and updated landscaping at multi-family apartment complex, for example.
Don’t fall behind.
You never want a prospective tenant to know your property was built in 1985 at first glance. Just as structural and cosmetic improvements are key to increasing value, so is modernizing your property to ensure it is reflective of the people it serves.
Successful property owners go well beyond a fresh coat of paint. Instead, they offer tenants on-site fitness centers, conference rooms, coffee lounges and more to keep the space in constant use.
Cut down on expenses.
An obvious way to increase the value of commercial property, is to cut down on the expenses. Investors are looking to technology to not only improve the look of the space, but to cut down on the cost of running it. These days modernized lighting, heating and cooling systems, for example, can save property owners fortunes. To boot, many agencies throughout the US offer incentives, rebates and tax credits for use of green technology, such as solar and other energy conserving appliances.
Just search the phrase “energy rebate” on Google and you’ll see what I mean.
Build more if the demand exists.
Consider obtaining an entitlement to expand existing rental space on your property. If you anticipate a growth in demand within your market, building out additional monetized space could reap high returns.
To that end, significant improvements warrant increases to rental costs. Avoid pricing out of the market, but remain aware that you’re in the position to generate more revenue from tenants as a result of on-site improvements and expansions.
Open up the property to a variety of uses.
If you own an industrial commercial property and you want to open its permitted use to retail or multi-family, consult with your city planning department and seek a conditional use permit or zoning text amendment to the existing building code. As a property owner, you have the ability to develop a space that is appealing to wide audiences, despite the unique nature of the property.
Follow these tips to increase the value of commercial property.
Read more on commercial real estate investment strategies here.