Comments (1)

By AZ Advisory Team, November 4, 2009 8:10 am

Increase Rent

The value of your commercial real estate property can also be increased by increasing the rent. In reviewing the historical data on a property, take notice of whether the tenants are paying market rent or whether there is potential for a reasonable mark up in rents. Determine how the improvements you make to the property can justify your rent increase. Pay close attention to both the upper and lower level of rents that are being charged for similarly situated types of real estate so you don’t price yourself out of the market.

Also, after repositioning the property or changing its usage and after upgrading with a LEED certification, you could charge a premium for these modifications. The upgrades will make your property more desirable, especially now that rents and tenants are decreasing, compared to properties that weren’t upgraded.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

Comments (0)

By AZ Advisory Team, November 2, 2009 11:31 pm

Change the Property’s Intended Usage

Often times, changing the use of a commercial real estate property can drastically change the value of the property. For example, suppose you find an old industrial warehouse in the middle of a bustling epicenter. Instead of keeping it as an industrial warehouse, you can seek a zoning variance to convert that warehouse to a hotel, or a condo building, or an office building, or any commercial use that makes sense for that location.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

Comments (2)

By AZ Advisory Team, October 28, 2009 8:09 am

The University of Miami Field House, a multipurpose facility at the Coral Gables campus, has been honored for its sustainability components. It was awarded the LEED® Gold designation established by the U.S. Green Building Council and verified by the Green Building Certification Institute (GBCI). LEED is the nation’s preeminent program for the design, construction and operation of high performance green buildings.

The UM Field House achieved LEED certification specifically for its energy use, lighting, water and material use as well as incorporating a variety of other sustainable strategies. By using less energy and water, LEED certified buildings save money for families, businesses and taxpayers; reduce greenhouse gas emissions; and contribute to a healthier environment for residents, workers and the larger community.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.

Comments (4)

By Alex Zylberglait, October 27, 2009 7:21 pm

Make Improvements to the Property

Improvements can take the form of cosmetic improvements or substantial rehabilitation. Cosmetic improvements include such things as new paint or wallpaper, new decor to the common elements, new landscaping, new carpeting/flooring, etc. Substantial rehabilitation involves making structural improvements to the property – for example a substantial rehab may involve redoing all the units of a multifamily property, or changing the structural façade of a shopping center, or making major renovations to the lobby of a large office building. While doing rehabilitation, it will be a bright idea to make improvements toward LEED certification. In any case, you increase the value of the property for not only your tenants, but for your own portfolio as well.

LEED certification

LEED (Leadership in Energy and Environmental Design) is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings. LEED gives building owners and operators the tools they need to have an immediate and measurable impact on their buildings’ performance.

This strategy uses five categories to guide building performance: Sustainable Sites, Water Efficiency, Energy Efficiency, Materials and Resources, and Indoor Air Quality. It can be implemented for new or existing buildings of any size.

The federal government already requires LEED for all military projects and most projects where government offices are housed, because of the environmental benefits of the process. Cities such as Chicago require all their public buildings to be of this high quality. Major retailers like Best Buy have made the commitment to building LEED Certified stores.

LEED Certified buildings are said to have better occupancy rates because LEED is considered a “premium amenity”, something that separates the wheat from the chafe. Clearly, there are benefits to getting ahead of the curve in the commercial real estate market. Do not be left behind. If you are truly interested in maximizing your cash flows and to start saving real money you should consider engaging a LEED consultant and see how you can upgrade your performance.

I will be glad to put you in touch with reputable companies to help you get LEED certification.

Alex Zylberglait provides commercial real estate investment advisory as well as research, estate planning, asset allocation, valuation, financing, special assets services, transaction advisory and commercial property acquisition and disposition services.