4 Ways to Add Value to Your Commercial Real Estate
- By seoserviceusa93@gmail.com
- •
- 01 Jan, 2019
Commercial real estate presents great opportunities for investors. The increase of small businesses has further boosted the commercial real estate market.
Before putting their money down for a commercial property, investors should formulate a strategy to gain profit from the property and to enhance its value.
Investors can grow the value of your commercial real estate with the following tips:
Make Improvements that Count
Investors can opt to make cosmetic improvements and substantial improvements.
Cosmetic improvements consist of new flooring, carpeting, painting, landscaping and more. When you’re renting out property, it’s imperative that you maintain the building and invest in cosmetic improvements regularly.
Substantial improvements include building a storage space, adding an extra elevator, additional kitchens/ bathrooms, etc.
If your intention is to sell the property then there’s no need to spend money on substantial improvements. The buyer may have a vision in mind for the property so it’s better to give them the opportunity to modify it according to their needs.
Offer Rentable Square Footage
A large commercial property can be rented to multiple tenants based on its square footage. Usable square footage refers to all the wall-to-wall and door-to-door space available on a property can that can actually be used by businesses.
Bear in mind that shared spaces like storage rooms, rest rooms, stairs, lobbies, etc. are not counted as usable square footage.
You can monetize square footage by renting out portions of the commercial property to various businesses. The owner of the property will have to accommodate each business; however, they also receive better returns.
Add Personality
Even commercial buildings can’t afford to be dull and boring today. You can design and decorate the interior and exterior of your property based on the sort of tenants you want to attract.
Everything from the flooring, lighting to the furniture will help to add personality to your commercial real estate.
Adding cost-effective amenities such as a daycare, free WiFi, an outdoor sitting area, etc. will increase the value of your property substantially.
Make Investments that Reduce Expenses in the Long-Run
Some investments seem incredibly expensive upfront but help reduce expenses in the long-run.
For example, since green buildings are growing in demand, it will help to make modifications on your property that make it more energy efficient and environmentally friendly.
Enhance Security
Business owners want their offices and shops to be safe. Enhancing the security system of your building allows you to charge higher rates for your usable space.
Are you an investor looking for commercial real estate in Toronto? Pivotal Commercial Realty helps buyers with site selection, lease negotiation and commercial real estate strategy. Call us today at 800-908-6718.
Before you go ahead and sign any papers to purchase commercial real estate in Toronto, spend some time learning and understanding the market.
Investors in commercial real estate have to consider the following before they decide where they want to put their money:
Interest Rates
For the first time in 7 years, the Bank of Canada increased its interest rate in 2017. The interest rate set by Bank of Canada has a direct impact of the on the cost of taking out a variable rate mortgage as well as other loans.
Fluctuations in the Bank of Canada interest rates also influences the growth of corporations and consumer spending, which impacts the demand for both residential and commercial real estate.
Investors all over the globe think of Canada’s commercial real estate market as a safe haven. Even though there is some uncertainty about the rise of interest rates, the contrast between tight supply and growing demand for real estate in the country has been a driving force in the real estate market.
The commercial real estate market continues to be viewed positively by international real estate investors with Toronto and Vancouver being the most popular destinations. In 2018, Toronto was considered one of North America’s major real estate markets to invest in. In 2019, both Toronto and Vancouver are expected to be in the continent’s top 3 destinations.
The growth in commercial real estate is being pushed by the increased sales in office buildings. Even the political uncertainty between US and Canada did not hamper the success of commercial real estate in the country.
Major Markets
In 2018, Canada’s commercial real estate sector hit a record breaking $36.2 billion. This growth can be attributed to the increasing demand of industrial, office, retail, multi-family units and ICI land.
Those looking to invest in commercial real estate in Canada should consider Toronto, Vancouver, Calgary, Montreal and Ottawa. In 2017, most of the growth in the sector was driven by office buildings but in 2018, industrial real estate led the way.
In the near future, the demand for industrial real estate is expected to rise due to the increase of e-commerce business in the country that are looking to build fulfillment centers nearby for fast and easy delivery.
The commercial real estate market in Canada is continuing to flourish. However various factors are expected to make bring changes to the landscape in the future.
2018 proved to be a record-setting year for the commercial real estate sector in Canada due to an influx of new projects and high occupancy rates. With that being said, property owners are advised to monitor fluctuations in the market. Like all real estate, the commercial real estate sector of Canada is prone to disruption.
Let’s take a look at the key disrupters in commercial real estate in Canada:
Shared Workspaces
There has been a dramatic shift in the way people work in the country. Canada is experiencing a boom in the start-up community , many of which are led by Millennials.
Traditional office spaces are being replaced with co-working spaces that are designed to enhance collaboration, allow for greater flexibility and lower operational costs at the same time. Open offices are much cheaper than conventional cubicles. Younger professionals have found a way to work with limited office space.
Landlords can’t just lease out their building to select tenants, they have to redevelop their office space so it caters to the demand of the modern workforce. This can involve offering flexible suites or open concept office spaces.