7 Ways to Increase the Value of Your Commercial Property

Increasing the value of a commercial property can bring many benefits for landlords.


With owning commercial real estate comes keeping your property in order. This can have a huge impact not only on the tenant businesses’ productivity and efficiency, but also on the value of the property. Increasing the value of a commercial property can bring many benefits for landlords.

The higher marketability of the commercial property is another benefit that comes with increasing the value of your assets. A higher-value asset can attract more buyers and tenants in the market, leading to an increase in its overall value. Finally, property owners can receive certain tax benefits when their assets’ value increases. In this blog, we will discuss seven ways through which you can increase the value of your property and leverage it to get more from your investment.

1. Increase Rent

This seems like a no brainer, but it is one of the easiest and fastest ways to increase your cash flow and overall value of your property. You can conduct a market analysis and see what average rents are for similar properties and increase rents accordingly. You should plan to increase the rent over time for existing tenants to hedge against inflation; however, when renting a vacancy, charge the new increased rent. Also, determine how the improvements you make to the property can justify your rent increases. 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. An experienced commercial real estate agent can help you navigate this!

2. Minimize Expenses

In addition to bringing in more revenue, another strategy is to cut down on expenses. Fortunately, there are several ways that this can be done.

First, gather statements of all your historic operating expenses to review. Analyze these statements for areas that you could consolidate or cut out completely. Think outside of the box here. The solution could be as easy as switching to LED lightbulbs or even using more energy efficient resources. You can also hedge against expenses by having your tenant(s) lease types changed from gross leases to net, double net, or triple net.

3. Maintenance

It is vital to make cosmetic updates to your commercial property to increase its value. Take a step back and really look at your property. Aesthetic improvements such as a fresh coat of paint on an older warehouse, new décor elements in the common areas of office spaces, or new flooring can make a huge improvement to sprucing up your building and its value. This does not have to be a full makeover, but small updates like adding landscaping can make a significant change in your investment. Regular upkeep and repairs will keep your property looking its best, which can boost its value.

4. Add Amenities

You can also consider adding new amenities to your property to increase its value. Value enhancing amenities can include something simple like installing a playground for a multi-family property or adding a conference room for your office tenants. Some amenities added could even be income producing like putting in a vending machine that you and tenants could benefit from.

5. Change the Purpose of the Building

Another way to drastically increase the value of your commercial property is to consider repurposing the space or using the building for a purpose other than what it was originally intended for (With city allowance). For instance, imagine a large industrial warehouse in the heart of downtown. While this building was built for the purpose of industrial use, imagine what the worth could be if you converted it into a trendy restaurant or stylish condo for tourists. Of course, a conversion project like this would be a massive undertaking, but it could pay off in time if done correctly and increase the value of your property remarkably.

6. Cut Down on Vacancies

Even if you make significant improvements and repairs to your property, it will not be worth much if it’s vacant. After all, one of the easiest ways to lose money in commercial real estate investing is through vacancies. Contact an experienced real estate agent that can help market your property and find qualified, long-lasting tenants. A property that is fully leased is worth a great amount more than a vacant building.

7. Find an Excellent Property Manager

Sometimes all that’s needed for a property is for it to be looked at through a different pair of eyes. A qualified property manager can help with just that. Property managers may be able to give you ideas on increasing income, decreasing expenses and giving your property a fresh, new look and feel. Managers not only will give you their perspective, but they will handle the other necessary tasks of owning a commercial property like organizing maintenance needs and repairs. The benefit of a property manager is taking the hassle away from you and it is their job to make sure your property is well taken care of, which will overall, increase its value for you.

The easiest ways to lose money in commercial real estate investing is through vacancies

Final Thoughts

In sum, while it may seem like an overwhelming task, there are several strategies that can be easily implemented to help increase the overall value of your property. When investing, don’t look at a property only as it is, but for the potential of what it could become!

And if you have any questions, M&D Real Estate is a full-service firm here to help you with all your residential, commercial, and property management needs. Are you interested in finding a way to increase your properties’ value? Contact one of our five-star commercial agents today!

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