Commercial property owners face the never-ending challenge of upgrading their buildings. Frequent optimization is the only way to ensure consistent profitability and keep tenants happy.
Here are seven cost-effective ways to improve a structure that will pay dividends in the long run. Investing in these updates is well worth the time, effort and money.
1. Add More Income-Generating Facilities
Adding more income-generating facilities is the best way to optimize a commercial property. The renovation process will take longer than the other ideas on the list, but it also has the greatest profit potential. Here are some income streams commercial property owners can add to their buildings:
- Communal workspaces
- Conference rooms
- Fitness centers
- Game rooms
- Child day care services
- Dining options
Although these offerings are quite different, they share one common theme — versatility. They can seamlessly fit into any commercial property’s operations. Whether in an apartment complex or an office building, these facilities are worthwhile additions. They will improve the tenants’ quality of life and expand the target market.
2. Prioritize Energy Efficiency
Energy efficiency is the next best way to optimize a property. A study from the Institute of Market Transformation found that commercial buildings saw their rental premiums increase by as much as 25% after making two simple sustainability improvements:
- Adding Energy Star-certified washing machines, refrigerators and other appliances
- Earning a certification from Leadership in Energy and Environmental Design (LEED)
Prioritizing energy efficiency tends to increase rental premiums for several reasons. First, it appeals to changing consumer preferences. Tenants want to pay rent at buildings with eco-friendly initiatives. Sustainability is no longer a nice-to-have accessory but an essential feature of commercial buildings.
Investing in energy efficiency also helps owners make a bigger profit when they sell. The real estate market has seen a notable rise in demand for buildings with sustainable features. Property owners planning to sell in the future must invest in eco-friendly amenities to maximize the property’s value.
3. Improve Air Quality
Commercial properties tend to have poor air quality because of their proximity to urban pollutants and the many shared boundaries within the building. Outdated architecture in old apartment complexes, schools and offices also play a role. Property owners who optimize air quality have a huge advantage over their competitors.
A few sweeping changes are necessary to ensure the best possible air quality. The installation costs might be expensive, but tenants’ long-term satisfaction and retention are worth the price. Start by making these changes:
- Replace the HVAC systems
- Provide tenants with portable air purifiers
- Bring more plants inside to filter carbon dioxide
- Switch to furniture and flooring materials with low amounts of volatile organic compounds (VOCs)
- Install air quality monitors in every room, including ones that detect particulate matter, carbon monoxide and carbon dioxide
Improved air quality has many positive health effects, including a boost in cognitive functioning for office employees. It also reduces the spread of airborne pathogens, reduces the symptoms of seasonal allergies and lowers stress levels. All these benefits lead to healthier, happier and more loyal tenants.
4. Give the Landscaping a Facelift
Curb appeal can significantly influence a property’s value. People are more likely to rent and stay for the long run if the landscaping is visually appealing and well-maintained. The statistics show that commercial workplaces with high-quality landscaping have 7% higher rental rates than workplaces that don’t. There are several reasons for this trend.
Landscaping with mature trees and bushes provides shade, privacy and noise reduction. These three elements are critical for attracting people to commercial properties, especially for office buildings and shopping centers. People are willing to pay more for products and services and spend more time in a properly landscaped facility.
Proper lawn care is much easier said than done. There are many ongoing tasks, including mowing grass to the correct height to prevent it from drying out. Fertilization and watering schedules are also constant responsibilities. Landscaping isn’t easy, but the effort can completely transform a commercial property.
5. Add Parking Lot Covers
Parking lot covers provide weather protection for tenants’ vehicles, which is a huge benefit. Protecting people’s main transportation methods will ease their daily schedules and improve the landlord-tenant relationship. Precipitation is a nonfactor, and they don’t have to worry about sun glare during the summer or snow during the winter.
Plus, covering the parking lot creates an upsell opportunity. Property owners could offer a premium parking option for certain spaces and generate another revenue stream. In the long run, the property value can increase because tenants will pay more for luxury parking. More upscale amenities also lead to better tenant retention rates.
6. Upgrade Light Fixtures
It’s difficult to overstate the importance of good lighting. It greatly impacts moods and productivity. Commercial properties must have high-quality light fixtures inside and outside the building. Start by upgrading to energy-efficient LED lightbulbs with different light temperature levels for each room.
Although light fixtures are important, there must also be an abundance of indoor natural lighting. The average American spends 90% of their time indoors, according to the Environmental Protection Agency. They need as much sunlight exposure as possible to compensate for their lack of time outside. Sunlight helps balance moods and regulate sleep schedules.
7. Heighten Security
Commercial property owners can’t forget about security. Nobody wants to work or live in an unsafe building. Basic devices like cameras and alarm systems aren’t enough anymore. Simple additions like shatterproof windows, reinforced gates and motion sensors will go a long way toward making tenants feel safer.
Heightened security is also a nonnegotiable for maximizing tenant retention. If the building makes people feel protected, they have much less incentive to leave and test their luck elsewhere. This factor has become more important in recent years as violent crime is on the rise in most major cities.
Optimization Is an Ongoing Process
These seven cost-effective upgrades are huge steps in optimizing a commercial building but aren’t permanent solutions. Remember — optimization is an ongoing process. Property owners can’t get too comfortable with how things are because there are always new things to implement that will attract and retain tenants.
Property owners must keep track of trends and add amenities as needed. They should stay alert and always be on the lookout for new opportunities to improve the building’s quality, no matter how successful the current arrangement is.