"Don't recreate the wheel." "Imitateingly innovative." Landlords love to copy each other but aren't afraid to recreate the wheel when figuring out how to maximize a building's potential and gain a competitive advantage. COVID shook the industry to the core. Office building owners were left with high vacancies, shrinking tenants, and questions surrounding the viability of the office building for the long term. They want faster, cheaper alternatives that acquire tenants without paying for new buildings. Who doesn't want to save time and money? One of the best ways to do this in commercial real estate is through adaptive reuse.
Businesses always find countless ways to automate processes using data. If we didn't, we would still be in the 1950s. Without data, the business itself cannot grow or even function. But, what's even worse than no data is inaccurate data. In the commercial real estate market, floor plan measurement inaccuracies can wreck a company's portfolio.
Big data solve big problems, and it's no different when used in the commercial real estate industry. Real estate companies need a steady flow of business goals completed to keep their business operations running smoothly. The goal should be to automate as many repetitive tasks as possible so they can focus more on the flow of communication with their prospective clients and marketing and sales teams. It all starts with data. However, for an organization to use data analytics, it must first have access to accurate information.
Do you know why blueprints are called blueprints? In 1842, an astronomer/mathematician turned chemist discovered a way to copy a drawing photographically. The process was called cyanotype because the chemicals used in the solution would turn a copy cyan-blue. Engineers quickly adopted this process to replicate complex mechanical drawings and the blueprint was born.
Successful companies know that their reputation is what matters in the long run because it affects the way people see their branding image and the overall probability of success as a company. They want to stay within the guidelines of what makes them different, have an impact on the world, and prevent any mishaps down the road that could have been avoided.
Offering a tenant improvement allowance can be costly for a property owner, however, there are things to avoid and strategies to implement while marketing commercial space and during the lease, negotiations to make the additional cost provide a great return on investment. A common mistake a building owner makes is to avoid leasehold improvements as a cash allowance due to misconceptions like the construction process can't be controlled, cost overruns will add logistical headaches for property management, leasing commission for a commercial broker will be calculated to include the value of these incentives, and construction management fees can't be charged. If your goal is to maximize profits or improve cash flow, then offering tenant improvements are excellent ways to do so!
The world is changing faster than ever. A decade ago business owners never would have expected to be having lease negotiations on Zoom or bother to consider how a company can coordinate a construction project via Slack. Changes like these cause you to shift your perspective and create new solutions to make sure your entire team benefits from it, and it’s no different than optimizing it with office buildings.
According to Prologis and Savills, industrial building vacancy is reaching an all-time low (even 2.0% in some markets) and will not be able to support the rapidly growing market demand for space until supply catches up. It has taken too long for real estate professionals to admit that building technology is a NEED to have, not a nice to have. The days of looking at technology costs as anything other than critical when assessing building budgets are over.