If you are a commercial property owner, then you know the struggles of filling vacancies. You can reduce rents and bring down your profit margin to attract a new tenant immediately. Or, you can take the step to remodel and reinvent the space. That way, you attract new tenants and at higher rents. The latter action requires patience as well as capital.
Of course, it comes with risks. The key is to do it right, and remodelling is a good way to take a single step back to take three steps forward. How do you know it's time for you to remodel your commercial property? Consider the points below before you make your decision.
Time since your last remodel
When was the last time the property was remodelled? If it has been over twenty years, it is a good time for a remodel. It might be common for buildings to go unchanged for three decades, but it shows. Ultimately, people avoid dated businesses because it does not leave a great impression. If you want a successful business operating in your commercial property as well as the highest rent possible, you need to put your money where your mouth is and invest.
A lot has changed in the last twenty years. As a commercial property owner, you have more to consider in terms of accessibility. A remodel is not just about aesthetics. It is also about ensuring all employees, clients and customers can access and navigate a building with ease.
Check the economy
If you’re in the midst of a recession, it might not be the right time to worry about a remodel. Though, it is always worth putting feelers out to find out where the winds are blowing. Often, tradespeople will offer bargain prices when work is slow. If you have the money, it might be worth your time to research further. The biggest risk is that you won't immediately attract new clients until the economy bounces back.
Speak to a leasing agent
Before you decide whether remodeling is the right decision for your commercial property, you should consult a leasing agent. An experienced agent who knows everything about your property type is going to offer you valuable advice. Take their opinion into account as you determine whether a remodel is the right decision. Their opinion will factor in all the relevant information from location to property type, and if they are on board with a remodel, you can do the same.
Trust your property manager
A major remodel can be complicated, and having a trustworthy property manager (as well as your project manager) can make all the difference. Even if you are managing a large-scale vacancy, you will likely have existing tenants. You still need to accommodate those tenants as you undertake a large-scale remodel, and your property manager will have to manage their expectations and needs. There might be power outages, lift stoppages, repaved car parks, and other general disruptions.
It will stretch the property manager to their limits, and if they are skilled, they will ease your burdens to keep everything moving forward. It is up to them to notify tenants of scheduled works and keep them appraised of the changes. They are effectively the go-between, and they are key to a successful remodel. The last thing you want is to drive away your existing tenants.
If you’re not sure whether you’re ready to start the process, take some time. There’s no need to rush into something - particularly when it’s such a huge investment of time and money. Just remember, remodeling your commercial space will increase profits and improve the environment.
If you lease your property out, consider the type of tenant you're trying to attract. If you have an office building, think about the surroundings to make it a place where people will want to work. If it's retail, consider how best to remodel for a customer-facing business. By keeping your audience at the forefront of your mind when you are remodeling, you can ensure a great return on investment.