6 Strategic Upgrades That Add Value to Commercial Office Space (and make tenants happier)
As building owners and operators, we are constantly determining how to get the most value out of our office assets. While commercial property management can come with a lot of challenges, once you know which upgrades can have the most impact, it can be a very lucrative and rewarding investment strategy.
Here are 6 strategic upgrades that improve your property and add to it’s value – resulting in happier, longer term tenants.
1) Improve the Lighting
Installing better lighting in more areas is one of the most cost-effective yet dramatic ways to improve the appearance of a space. In addition to adding light fixtures, you can also consider adding energy-efficient light bulbs as well. LED’s, for example, use 25 to 30 percent less energy than incandescent light, and last 25 times longer. That’s a significant saving that increases your cash flow and your property’s overall value in the long-term.
Some specific lighting changes to consider:
- Add recessed LED bulbs to maximize the light level without affecting the visual flow of a space.
- Remember to choose the LED color temperature wisely. Light temperature depends on the Kelvin value of a bulb. A lower Kelvin value means the light will be warmer and more yellow, which comes out as a cozier light. A higher Kelvin value means the light will be bluer, considered an energizing light.
- In general, office common areas look best with LED bulb values between 3500 and 4100 K, while bulbs with a value of 5,000 to 6,500K are best for office workspaces.
2) Make Small Spaces More Purposeful
When it comes to commercial space, too often we see that highly-trafficked areas like hallways and bathrooms are overlooked. Corridors are the backbone to a commercial building – whether it’s for tenants or employees – these spaces can have a decided impact on one’s experience in the building. Are your corridors wide enough to comfortably fit multiple wheelchairs at a time? Are your elevators in the right places to enhance functionality? Are your bathrooms in key places like the lobby – and are they updated enough to match the quality of your brand? By being more thoughtful with these transitional areas, you can provide a much better experience for both your tenants and their guests.
3) Be Energy Efficient
By making your space more energy efficient it can lower your utility bills and lessen your carbon footprint. Office equipment is becoming one of the fastest-growing electricity uses in commercial buildings in the United States as stated by The American Council for an Energy-Efficient Economy (ACEEE). Moreover, it consumes around 7 percent of the total commercial electric energy of a business. Given this data, commercial energy consumption translates into $1.8 billion in electricity costs to businesses. Pay close attention to the condition of your roof, doors, heating and air system and appliances throughout your office building. If they haven’t been upgraded in a while – now’s the time to look into it.
In addition to the condition of the building, you can make a few small changes that can provide dramatic savings such as switching from desktop computers to laptops and turning off equipment that is not in use. Utilizing power strips or self timers are a great way to effectively keep your energy usage in check without having to remember to shut something off.
4) Consider Wellness Rooms
While it may not be in the budget to add a standard gym or fitness center to your office, there are other ways to incorporate health-driven components into your building. Designers are increasingly seeing requests for workplace wellness rooms, a space that can be interpreted in a multitude of ways: it might be a place for yoga and meditation, it could be a maternity room for mothers of newborns to pump, it might also just be a reprieve. Sometimes all you need is a room dedicated to serenity with proper lighting and comfy chairs.
5) Create Different Types of Workspaces
Another important consideration to bear in mind when contemplating an office upgrade is the creation of different types of workspaces. A forward-looking office includes dynamic workspaces of different types that include:
- Individual work areas
- Meeting rooms of different sizes
- Collaboration zones
- Social or break areas
6) Make It Environmentally Friendly
In today’s marketplace, buyers are becoming more interested in the environmental impact of the buildings they are considering, regarding efficiency of energy, water usage and environmental footprint. Analyze your opportunities to harness commercial technologies including solar power, energy efficient light bulbs, low flow water-saving plumbing appliances, increased insulation, and recycled building materials when making upgrades and renovations. These components can lower your expenses while diminishing environmental impact, and there may be tax incentives to invest in green technologies.
By paying attention to these points when considering a commercial office upgrade, you not only will end up with a truly dynamic, functional workspace, but also your tenants will be happier, more content, and productive with a suitably designed, upgraded office. As a result, business will profit from an array of benefits.
If your space is attractive, you’ll have tenants lining up to see it. Tenants may still request changes to the space, but by implementing these features, you’ll limit the tenant improvements (TI), and ultimately improve your ROI down the road.
Among the myriad of data points available, there’s two that stand out as key indicators of profitability: Internal Rate of Return (IRR) and Cash-on-Cash Return.
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