Is it time to upgrade a space in your commercial real estate holdings? Are you wanting to get more money-per-square foot of your existing commercial buildings? It sounds like a tenant improvement project is on the horizon. Here is an important checklist to consider to maximize the value of your tenant improvement project, whether you work with Rubicon or not.
Contact a commercial real estate broker in your area. What do competing properties sell or rent for per-square-foot? Take a building tour or two to understand what the buildout quality and amenities are of your competing properties. This step will help you figure out what you need to do to your property and how much it can potentially increase your value or rental income.
First and foremost, assess the cost of the improvement. Determine how much it will cost in both materials and labor to complete the desired renovation or upgrade. With this information, you can then compare it to potential return on investment should you make the improvements.
For example, if the improvement will cost you $2,000 to complete and you think it will increase your apartment’s value by $4,000, then it may be a good investment. However, if the cost is more than the potential return on investment, it may not be worth making the improvements.
It is important to also consider how much time it will take to make the improvements. If the improvements are extensive or require a lot of labor, it may be more time consuming and costly than you anticipate. Additionally, research what other apartments in your area have been recently sold for. This can help give you an idea of the potential return on investment should you choose to make tenant improvements.
Whether it’s the installation of something like EV chargers in your parking lots or new, energy efficient LED lighting in the parking lot—there are lots of opportunities for tenant improvement projects to bring new amenities. You can use these types of amenities as selling points with existing tenants and it can give you an edge over competing listings for future tenants renting commercial space. You might even find local, state or national incentives for certain amenities in the form of tax credits or grant programs.
Adding amenities to an apartment can be a great way to attract and retain tenants. Tenant improvement refers to any changes made to the physical structure of an apartment in order to make it more desirable to potential renters. These improvements can range from simple upgrades such as fresh paint or new flooring, to more complex features like energy-efficient appliances or soundproofing.
The most popular amenities for tenant improvement include fixtures such as lights, ceiling fans, and appliances; aesthetic upgrades such as wall art and area rugs; and functional additions like dishwashers, washer/dryer units, or storage solutions. Additionally, installing modern technology such as programmable thermostats, Wi-Fi enabled devices, or home security systems can give your property a competitive edge in the rental market.
Ultimately, when considering what amenities to add to your apartment for tenant improvement, focus on things that will make your property more attractive and desirable to potential renters. Providing them with an inviting and up-to-date technology can help you stand out from the competition and keep your tenants happy.
This is key, especially if you are doing a tenant improvement project of a space that is already rented out. Make sure that your tenant knows exactly what is and what isn’t going to be done. Make sure that you and your contractor have a written scope of work so that the finished project is exactly what you’re looking for.
If you’re taking on a tenant improvement project without the help of a general contractor, make sure that you’re aware of what permits will need to be pulled. Consider meeting with someone from your city or municipality's code enforcement team to make sure that there are no surprises. It might even benefit you to bring this topic up with your contractor if you are working with a professional, to make sure that they are also doing things by the book. Don’t have a general contractor but want someone to guide you through the permitting process? Rubicon can consult on the project and handle all the red tape for you.
Also, here's a guide for building code by state.
As always, Rubicon is here to support you with your tenant improvement project. Let’s talk about the scope of work, your needs and how we can help keep you on-budget and on time!
