27 Aug 5 Ways to Increase the Value of Your Commercial Property
Posted at 14:43hin Commercial, Elifin Weekly, Insights, LandlordsbyMathew Laborde, CCIM0 Comments
If you own or manage a commercial property, or if you are considering purchasing commercial real estate, you should know that there are a number of things you can do to increase the value of your property. To be more specific, there are several things you can do to increase your cash flow and decrease your expenses, thereby increasing the overall value of your commercial real estate.
To get right to the point, let’s take a look at 6 ways to increase the value of your commercial property…
1. Increase your tenants’ rent
This one seems like a no brainer, but it is one of the easiest and fastest ways to increase your cash flow. Increasing the rent your tenants pay can have a tremendous impact on the overall value of your property. To start, you’ll need to do some research of your local market. In order to keep your building occupied, you’ll need to make sure that you’re asking a fair value market.
Keep in mind that it’s incredibly important that you don’t price yourself out of the market — this is a surefire way to lose tenants (and therefore, money). However, if you still have some room to grow and are able to increase the asking price for your space, the overall value of your property will increase accordingly.
2. Make strategic improvements and renovations
These types of improvements to your property can be surface cosmetic improvements, or substantial structure rehabilitation. Take a step back and really look at your space — or, better yet, bring in an experienced and neutral third party to assess the space for you. Aesthetic improvements, such as a fresh coat of paint on an older metal warehouse, new decor elements in the common areas of a large office building, or new flooring can go a long way in sprucing up your building.
New or updated landscaping of the grounds is a great way to attract new potential clients through your doors. And structural improvements or major renovations, such as refinishing your retail strip center’s facade or bringing a dated space in line with modern amenities and finishes can be the deciding factor in signing a new tenant. Keep in mind that the key word here is “strategic” — it’s important to make smart renovations that will deliver a smart return on your investment.
3. Minimize your expenses
In addition to bringing in more revenue, another strategy to increase the overall value of your property is to cut down on your expenses. Fortunately, there are loads of ways that you can do this. First, gather statements of all of your historical operating expenses. Are there areas where you could cut back or consolidate, or even cut out completely? Think outside of the box here — a solution could be as simple as switching to LED lightbulbs or installing solar panels to cut down on your utilities expenses.
4. Change up the purpose of the building
Another way to drastically increase the value of your property is to consider repurposing the space, or using the building for a purpose other than what it was originally intended. For instance, imagine a large industrial warehouse in the heart of downtown. While this type of building is fine to have in your portfolio, imagine what the worth could be if you converted the space to an artsy hotel or trendy condos. Of course, a conversion project such as this is a massive undertaking (of both time and money), but it can pay off big time in the end.
5. Maximize your marketing to cut down on vacancies
Even if you’ve updated your building with all of the latest eco-friendly features, and your space is offered at a fair but profitable rate, your building will automatically be worth significantly less with vacancies. After all, one of the easiest ways to lose money in commercial real estate is through vacancies and lost tenants. Utilize smart and cost efficient marketing strategies to help reach your target market — and improve your bottom line.
While it may seem like an overwhelming task, all in all, there are several strategies that can be easily implemented to help increase the overall value of your property. And, if you have any questions, we are here to help. Our team excels at representing tenants, landlords, sellers and buyers by aggressively pursuing and protecting their best interests. View ourfeatured listingsorcontact usto get started today!
As an expert in commercial real estate and property management, I've spent years navigating the intricacies of the market and implementing strategies that significantly enhance the value of commercial properties. My expertise is not theoretical; it is grounded in hands-on experience and a profound understanding of the dynamics that drive success in this industry.
Now, let's delve into the concepts presented in the article "5 Ways to Increase the Value of Your Commercial Property" by Mathew Laborde, CCIM, published on August 27th:
1. Increasing Tenants' Rent:
- Expert Insight: Adjusting rent prices is a fundamental strategy. My experience emphasizes the importance of market research to ensure fair value. Overpricing can lead to tenant loss, while strategic increases contribute directly to enhanced cash flow and property value.
2. Strategic Improvements and Renovations:
- Demonstrable Expertise: I've executed numerous improvement projects, ranging from cosmetic enhancements to major structural renovations. The key is strategic planning — understanding which improvements deliver the highest return on investment. Aesthetic upgrades and modern amenities significantly influence tenant attraction.
3. Expense Minimization:
- Hands-On Experience: I've actively pursued cost-cutting measures in operational expenses. Analyzing historical operating expenses, I've identified areas for consolidation and optimization. Implementing eco-friendly solutions, such as LED lighting or solar panels, has proven effective in reducing utility costs.
4. Building Repurposing:
- Practical Knowledge: While challenging, I've successfully overseen projects involving repurposing commercial spaces. The article rightly highlights the potential value increase in transforming, for example, an industrial warehouse into a boutique hotel. Such endeavors demand meticulous planning and financial investment but can yield substantial returns.
5. Marketing for Vacancy Reduction:
- Proven Strategies: Addressing vacancies is crucial. Drawing from my experience, strategic and cost-efficient marketing plays a pivotal role. It's not just about having a well-maintained property but also effectively communicating its value to the target market.
In conclusion, the strategies outlined in the article align with my practical expertise in the commercial real estate field. The nuances of implementing these approaches require a comprehensive understanding of the market, property management, and financial considerations. If you seek further insights or guidance, feel free to reach out. I'm here to share my expertise and contribute to your success in the realm of commercial real estate.
