Gone are the days when your first thought of industrial property is dirty manufacturing and old steel sheds. With the dramatically changing economy over the last ten years we have seen a continual shift into new concrete tilt panel office/warehouse throughout the traditional industrial sectors. With the changing dynamics in tenant use we are seeing a greater discrepancy between the pricing and time on market of the new and old buildings. Whilst a lot of the buildings that are being leased are price sensitive there is one key factor that a lot of owners forget to attend to.. Presentation.
Regardless if the building is new or old, tenants are now placing a lot more emphasis on presentation and appearance of their place of business. If you have a capable experienced real estate agent they should be able to guide you on some of the most cost effective ways to improve your overall buildings performance to assist in minimizing time on market and maximizing rental returns or sale price. Simple things like repainting office walls, replacing old carpet with new, keeping gardens maintained, repaint visible external walls and update old sign pylons with new sign pylons. You are probably reading this thinking I don’t want to spend all this money only for a tenant to ruin it and for repairs to be needed again. Not the case, the best part of commercial real estate is that if you use an experienced real estate agent you can negotiate that prior to vacating, the tenant needs to return the building to the same level of presentation as what they entered the lease in. With this correctly negotiated at the start, your ongoing capital expenditure is lower and the tenants continually maintain your investment for you.
So presentation has become extremely important in reducing time on market and improving the $/m2 rates achieved for both lease and sale.
Phil Grant – Director Commercial Sales & Leasing
NAI Harcourts Pinnacle