Commercial real estate can be considered in the context of competition with other properties for tenants. In order to increase an investment's competitiveness, there are a number of things that can be done to your property.
1. Increase the property's versatility.
A property that can be used by businesses in different sectors and industries has many more potential tenants than commercial real estate that is specialized for just one. Owners who keep their properties open to renovation keep themselves open to more potential tenants, and keep themselves open to many more potential buyers, should they decide to sell.
2. Specialize your property.
Owners can opt to pursue a strategy that is exactly opposite to the one above. This is risky because it does decrease the number of potential buyers or renters, but by positioning a property as the absolute best location for a specific type of business - like a bakery, call center, or restaurant for instance - it ensures that you are far above any competition for that particular market niche.
3. Alter unit sizes.
There are two basic renovation strategies that can be taken, and both involve cutting. On the one hand, large properties can be 'cut' into smaller units where the sum of the revenue from those is more than the revenue from the original property. On the other hand, walls between a number of smaller units can be 'cut' to produce much larger units that can be offered to larger and more stable tenants. Either of these tactics may add considerable value to a property, but must be carefully considered before any decisions are made.
4. Provide services.
The best way to add value to your commercial real estate holdings is to add services in and around the property. Tenants need a number of services that can easily be made available to them on site. Coffee shops and cafeterias, parking, superior internet access, additional conference rooms, security and housekeeping are all services that make a particular location more attractive, so being able to provide them will certainly add value to a property. The great thing is that almost all of these services can be offered competition free, effectively increasing revenue from a property.
5. Be active in tenant and landlord associations in your area.
The best way to know how you can make your tenants happy is to find out what they and their peers are thinking. Being active in local commercial associations gives you really valuable information about the pulse of your market. Not only does it enable to find out where you may make improvements, but it can also identify your potential competitive advantages. If, for instance, one of the tenants of a nearby property is unhappy with a certain aspect of their location, you can easily identify them as a potential new tenant if you could provide what they are looking for.
Commercial real estate holdings require constant analysis to maximize their value. Reacting to developments quickly is essential to keeping on top of the market.
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