By David Bitton
In commercial property ownership and management, there are three main objectives: preserve the value of the property, maintain tenant satisfaction, and generate enough revenue. Commercial property maintenance is the best way to tackle these objectives all at once. With proper maintenance, you can cater to your tenants’ needs, as well as their customers’ needs, which will help you return a profit. At the same time, you get to either maintain or boost the property’s value.
When you run into commercial property issues, you have a couple of options to choose from: hit a panic button and start lowering rents and accepting lower profit margins or reinvent your space through renovations that will enable you to bring in higher revenue. The latter option is the smartest way to go.
However, considering how large commercial spaces can be, proper maintenance can be challenging and a bit overbearing knowing that it needs a lot of patience, effort, and money. While it is kind of a bit of a challenge, it’s absolutely doable. Now, you might be asking yourself “is it really necessary to do renovations now?” There are usually a few signs you can’t afford to ignore.
3 Signs It’s Time to Do Renovations
1. Noticeable Deterioration
Wear and tear are common issues in properties that aren’t well-maintained. Here are the noticeable signs of building deterioration:
● Chipping wall paint
● Spalling of concrete
● Broken floorboards or tiles
● Foundation issues
● Water leakage
● Visible air bubbles on the walls
● Mold formation
Deterioration is normal, especially for buildings that are several years old. But, once you spot any of these signs, immediate action is needed. Building deterioration can be extremely dangerous to everyone in the building. Ignoring these can eventually lead to accidents, severe structural defects, or worse, collapse. For instance, broken tiles or floorboards, especially in a high-traffic area can cause a trip and fall accident. Needless to say, it’s a lawsuit waiting to happen. Even a little bit of mold in one area can cause a significant health crisis within the premises.
2. Outdated Design
Commercial real estate is a highly competitive world. Nowadays, it’s highly important to keep up with trends to keep your business relevant. Another thing to consider is branding. Your commercial space design should reflect your brand, as well as emerging trends. An outdated design in both the exterior and interior parts of your building creates a bad image for your business, especially in today’s market, where every business is insanely competitive. So, ask yourself, does your commercial space reflect these two factors? If not, it’s time to do renovations.
In addition to a bad business image, it can also affect the overall experience of your tenants, your tenants’ customers, and your employees. Outdated space designs can impact your tenants’ productivity. Outdated rooms, creaking desks, noisy chairs; all these things communicate to your tenants that there’s neglect in maintenance and there’s a lack of investment on your part. This can eventually lead to low staff morale, increased turnover rates, and lower revenue.
3. High Operational Expenses
Did you ever wonder why your operational costs are going higher? It may be due to outdated utilities. Office buildings in the United States spend more than $30,000 or almost 29% of their expenses on utilities per year. In fact, energy use accounts for 1/3 of your total operating costs, with 17% of electricity use going towards lighting. If you’re operating on dated utilities and it’s starting to reflect on your bills, you sure need to do plenty of renovations.
According to Sarah Jameson, Vice President of Marketing at Green Building Elements, older HVAC systems, especially those that are 10 to 15 years older, can bring higher energy bills to your commercial property. In addition, its maintenance and repair costs can rack up your bills, too. You may need to get repairs from time to time because not only do they struggle to maintain the right temperature, but they also tend to have plenty of faulty parts, such as the thermostat, air ducts, and air filters.
5 Tips for Planning the Renovation
Now that you know what signs to look out for, you need to start planning how you will carry out all the necessary renovations. Your renovation plan should have the following: budget, hiring of contractors, sustainability, schedule, and permits. Here are some tips you can use to create a successful renovation plan:
1. Look for a Qualified Contractor
When looking for a contractor, make sure you have at least three choices. You must conduct both phone and face-to-face interviews to know which contractor you’re most comfortable with and who can deliver quality work within a specific timeframe. Discuss important things such as expenses, priorities, timeframe, permits, and the contractor’s work history and expertise.
2. Map Out a Budget With the Contractor
Consult your chosen contractor regarding the expenses you will have. Working out the budget with your contractor is beneficial because you get to map out and see a detailed breakdown of the costs. If you see something you don’t think you can afford, you can easily ask the professional for a cost-effective but durable alternative. In addition, you need to have a contingency budget of at least 10% to cover any unexpected expenses during the renovation process.