Commercial real estate is a worthwhile investment that appreciates over time. In this post, we’ll outline five strategies to increase your cash flow, decrease your expenses and increase your commercial property value.
Make property improvements
Property improvements can be cosmetic or structural. Cosmetic improvements may involve repainting, installing new floors or improving the landscape. Structural improvements, or substantial rehabilitation, can include:
- Redoing all units of a condo property
- Changing the structural facade of a shopping center
- Renovating the lobby of a large office building
Property improvements increase the worth of your portfolio and better attract potential tenants.
Increase lease rate
You can increase your commercial property value by raising the lease rate. Review historical data for your property and current lease rates of similar properties. This information can help you determine if there is potential to raise lease rates based on market conditions. Recent property improvements may also justify a raise in lease rate.
Examine your operating expenses to determine ways to decrease costs. You’ll want to make changes that won’t significantly affect your tenants’ daily operations. These changes could be as simple as switching to energy efficient light bulbs to reduce your electric bill.
Alter the property’s intended usage
Changing the use of a commercial real estate property can change its value. For example, you may have an old industrial warehouse located in the middle of a growing area. You could seek a zoning variance and convert the property to a hotel, condo building or office complex.
Adding amenities can make your property more valuable. These amenities could include:
- Playgrounds for multifamily properties
- Free wifi for retail tenants
- Fitness centers for an office building
- Outdoor courtyards for hotels
By implementing these strategies, you will increase your commercial property value, setting you up for a successful future sale. If you’re looking to make property improvements, please contact our project management team. If you’re ready to list your building, our landlord/seller team stands by ready to help.