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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.

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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.

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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.

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By Alex Zylberglait, October 26, 2009 5:46 pm

If you are thinking about purchasing commercial real estate, it’s important to know that there are things that you can do to enhance and increase the value of your investment. As such, when you search for a commercial property, look at the property’s potential in addition to its historical data. Because the value of commercial real estate is primarily driven by the cash flow that the property generates, any strategy you employ has the potential to increase your cash flow, decrease your expenses, and increase your overall equity and the value of the property.

Case in point is a Class B office building known as Golden Eagle Plaza at 525 B St. in downtown San Diego which was turned into an arguably Class A superstar by Hines Interests LP.  The San Diego Business Journal reports that Hines upgraded this well-located, 22-story office building, by refurbishing it with a new lobby, new roof, elevators, controls and systems, and by getting a LEED certification.  Read full article here.

Now that commercial real estate assets are anticipated to devaluate in the coming months, investors like you should be seeking new strategic assets to invest in. The economics of purchasing existing buildings (especially when its owners are  distressed) with fairly good fundamentals and then upgrading them is very promising.

Aging properties, making sure it passes its Forty-Year Recertification, must also be upgraded or the best tenants will look elsewhere when they seek additional space in the coming years in response to the anticipated growth in the economy.

Hines’ retrofit strategy seems to be paying off as early as now:  San Diego’s large law firms ares moving to Golden Eagle Plaza like the firm of Procopio, Cory, Hargreaves & Savitch LLP, have already committed to 100,000 square feet in the building.

Stay tuned for my future posts as I elaborate further on how you can increase the value of your commercial real estate property.

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.