6 High-Impact Improvements You Should Make to Your Commercial Property

Renovating and remodeling commercial properties is essential for attracting new tenants and retaining current ones. These upgrades can also improve property value if the owner wants to sell. Which renovations should commercial property owners choose?

Nowadays, there are numerous options on the table. Here are the most impactful improvements for commercial properties and which ones have the highest return on investment (ROI).

High-Impact Improvements for Commercial Properties

Improving commercial properties can be stressful, what with spending money, hiring reliable contractors and performing other tasks. However, these six improvements are worth the time and money for current and future tenants.

1. Increasing Energy Efficiency

Sustainability has become more important for consumers as they see what’s happening worldwide. The craving for environmentally friendly practices spills over to renters who want to see energy-efficient elements in their housing. A 2023 survey finds 40% of American renters won’t select a property if it doesn’t have green practices. Conversely, about two-thirds say eco-friendliness is a critical factor in where they choose to rent.

The HVAC system is among the first places a commercial property owner should look for upgrades. It consumes a lot of energy daily and directly affects a tenant’s utility bill. Energy-efficient HVAC systems may have a high upfront cost but pay for themselves in the long run.

2. Adding New Appliances

New is better than old for most tenants, and they’ll appreciate this logic with high-quality appliances. Replacing them demonstrates a property owner cares about their renters. New refrigerators, stoves and laundry machines typically look sleeker and more aesthetically pleasing than 10- or 20-year-old appliances. Landlords should look for the most durable brands to ensure they last throughout someone’s stay.

New appliances are another opportunity for commercial property owners to prioritize energy efficiency. They enable the building to decrease its energy consumption and carbon footprint. Owners should search for Energy Star appliances because these machines consume minimal energy and water. These items have saved $500 billion in energy costs in the last 30 years.

3. Renovating the Kitchen

Property owners with a limited budget should narrow their focus to areas where tenants spend most of their time. The kitchen would be a great starting point, as it’s the primary area for food preparation. Some people also use the kitchen for socializing and entertaining.

Kitchen improvements range from minor renovations to complete overhauls. On the lower end, commercial property owners can install new flooring to enhance the kitchen’s appearance. Herringbone tiles are popular because they add texture and depth, turning ordinary into fantastic. Ceramic and porcelain are terrific choices for durability if the floor needs a facelift. Other kitchen renovation ideas include upgrading to high-quality countertops and adding islands for increased functionality.

4. Decorating the Rooftop

Giving tenants places to go outside their rooms is essential for entertainment and socializing with neighbors. Commercial property owners should utilize the rooftop and make it a hangout spot. This area could host Super Bowl watch parties and movie nights or be a spot for relaxing.

Landlords could also plant a community garden to entice renters and enhance sustainability. This element adds beautiful aesthetics to previously unused rooftops and brings energy savings. Rooftop gardens reduce the heat island effect, making tenants more comfortable in the summer and reducing HVAC usage and utility bills.

5. Beefing up Security

Tenants want to feel safe in their rented spaces, so increasing security around the building is an excellent improvement. Property crime is the most common type of theft in America, with about 1 million burglaries occurring yearly. First-floor tenants may especially feel vulnerable because they’re the most accessible spots for thieves to attack. Building a reputation for safety attracts new renters and keeps the current ones.

The most immediate way to improve security is by installing cameras. These devices provide 24-hour surveillance and thwart thieves by letting them know every action is being recorded. Security cameras provide legal backing for commercial property owners and their tenants in court if something happens to them. Landlords should also consider extra lighting and security guards.

6. Building a Parking Garage

Another way to increase security is to build a parking garage. While this venture may be expensive, it’s attractive to tenants for safety and convenience. Parking garages protect renters’ vehicles from rain, sleet and snow and give them a place to park aside from the streets. Leaving a car in the open makes it vulnerable, but a garage has better security with its limited access.

Building and maintaining a parking garage can be challenging, especially in areas known for cold weather. However, creative tactics can make the job easier. For example, the DivcoWest Atelier garage near the University of Denver campus faced high levels of water intrusion on its lowest levels. The maintenance crew used a waterproofing system to repair the damage. The cold weather inhibited the team, but they used an on-site heated storage unit to keep their materials usable.

What Renovations Bring the Highest ROI?

Commercial property owners can find excellent renovation opportunities anywhere in their buildings. However, some improvements stand out as superior investments. Remodeling’s 2023 Cost vs. Value Report shows these four improvements bring a high ROI.

1. HVAC Electrification

Some buildings use a fuel-burning furnace to heat the rooms. Upgrading to an electrically powered HVAC system costs about $17,747 on average, but the $18,366 resale value makes it attractive to buyers.

2. Steel Doors

Doors are popular for remodels because they bring better curb appeal, energy efficiency and security. Tenants get all three when property managers install steel doors. This replacement brings a 100.9% ROI, making it an attractive improvement for property owners.

3. Minor Kitchen Remodel

Kitchen remodels can get pricey, so watching costs is essential for renovations. However, a minor renovation brings an 85.7% ROI nationally. These improvements include replacing the stovetop and fridge with energy-efficient models and installing laminate countertops and resilient flooring.

4. Window Replacements

Windows significantly affect heat exchange in the summer and winter. Standard ones might make tenants uncomfortable, so a replacement is a great idea. Low-e vinyl windows make rooms more comfortable without compromising natural light. Plus, they bring a 68.5% ROI for property owners.

Getting the Most From Commercial Property Renovations

Determining which projects are best is difficult when so many options are available. Commercial property owners should survey their tenants to see what common denominators arise in their inquiries.

These six high-impact renovations and four high-ROI remodels are excellent starting points for landlords looking to attract renters and increase property