How to Upgrade Your Commercial Building to Maximize Its Potential
Commercial real estate can be a lucrative investment option, with many savvy investors enjoying typical returns of 6% to 12% annually. However, such returns aren’t guaranteed, especially if your commercial property lacks functionality for the tenants, you’re trying to attract. Any real estate investor facing that problem has options. Before you try to lease out your commercial space, consider making the following upgrades to maximize your property’s potential.
Photo by Jimmy Chan
Focus On the Entrance
Whenever you look at any commercial real estate for lease advertised online, you see beautiful, contemporary, and welcoming entrances that make a great first impression. If your building accessways are dark, dated, or otherwise uninviting, make them your focus. Lighten them with fresh paint and new light fixtures, and consider modern and clean flooring for sophistication and contemporary elegance. You might even invest in new signage to help tenants and their guests know they’re in the right place.
Prioritize Functionality
Whether your building is old or new, the floorplan won’t always suit current or future clients’ needs. For example, older buildings typically feature more closed-in layouts with office cubicles and small rooms. While many businesses still require private offices, open-plan layouts are typically more desirable to collaborative firms requiring open areas for creative planning.
Look at your floor plan and consider the types of businesses you want to attract. Sometimes, removing walls to create usable spaces is all it takes to make your commercial building more attractive to prospective tenants. If you’re stuck for ideas, research what other businesses are doing. Individual work areas, collaboration zones, meeting rooms, and social areas are all excellent dynamic workspaces that might appeal to a broad range of businesses.
Look At Energy Efficiency Upgrades
You might not directly benefit from energy efficiency upgrades, but your tenants can. You can also enjoy peace of mind knowing you’re doing your part for the environment. Energy efficiency upgrades like skylights, LED lighting, smart thermostats, and upgraded heating and cooling appliances might all make a difference. Such upgrades might also attract the tenants you’re looking for while simultaneously adding value to your building.
Update Fixtures and Fittings
Commercial building renovations can be expensive, especially when you start removing walls, making roof repairs, and updating bathrooms and kitchens. Not all investors who have just purchased their buildings will have money spare for significant renovations immediately.
In that case, consider updating any old fixtures and fittings that don’t tie in with the theme you’re aiming for with your new investment. Electric sockets, cupboards, doorbells, and lights, don’t generally cost a fortune to replace, but they can often transform the look and feel of a space.
Freshen the Paint
You can’t avoid wear and tear. Countless years of people moving around a building will eventually take its toll, and paint is one of the first things to start looking worse for wear. Rather than painstakingly removing scuff marks and patching imperfections, give your commercial building a fresh coat of paint throughout.
Keep the colors neutral to appeal to a broader audience, but don’t be afraid to add definitions to different spaces with feature walls. Alternatively, you can leave this task up to the new tenants. Painting is an upgrade that can suit all budgets. You might decide to keep costs low by painting it yourself or enlist the services of a professional to save time.
Consider Curb Appeal
Your commercial building’s interior might be modern and luxurious, but business owners can sometimes be put off leasing a building for their business ventures if its façade doesn’t reflect its inner beauty. First impressions count, so don’t be afraid to make changes to the exterior if it could improve your chances of attracting the right tenants.
Fix any structural issues and consider minor landscaping, like plant boxes, window shutters, and greenery, if appropriate. If your doors and windows no longer reflect the elegance and sophistication of your building, replace these with large, modern, and energy-efficient options. Many commercial building owners also enjoy transforming their investment with a new coat of exterior paint to help their building stand out for all the right reasons.
Leave Room for Tenants to Upgrade Further
Most tenants want the freedom to make your commercial space their own for the duration of their tenancy. While it can be tempting to make upgrades that suit your unique tastes, keep your focus on building upgrades that will suit all tenants, like energy efficiency, repairs, and general aesthetics.
You can then give your future building occupants the freedom to make further changes, like paint, storage, and fixtures. However, you might like to include a clause in your tenancy agreement that ensures all tenants will remove any alterations, fixtures, and fittings and reinstate the premises to its original state when their tenancy agreement ends.
A commercial building can be a blank slate, but not every investor knows how to develop it into something desirable. Focus on these upgrades above, and it might only be a matter of time before the right tenants come along.
Author: Sunny Aaron
Cover image by Osama Saeed on Unsplash
