Commercial Asset Preservation COVID-19 Response

Commercial Asset Preservation (CAP) offers in-person oversight of your temporarily closed properties nationwide

covid-19-commercial-asset-preservation

Commercial Asset Preservation specializes in closed/dark property oversight and maintenance. Only CAP has the national network, experience, and detailed closed property reports to conduct recurring visual exterior inspections. Our experts look for evidence of vandalism, security concerns, and life safety issues.

CAP’s commercial general contractor network not only identifies issues of concern but also can perform emergency repairs without delay. Rest easier knowing that you have someone checking on your buildings and protecting them when they are most vulnerable.

Contact CAP (216) 765-1220, inquiries@commercialpreservation.com

Commercial Asset Preservation Seeking National Sales Executive

Commercial Asset Preservation is seeking a National Sales Executive. The National Sales Executive is responsible for creating new business opportunities for Commercial Asset Preservation (CAP). We are seeking a motivated professional to help us continue to grow our presence in the commercial real estate maintenance industry throughout North America.

Responsibilities

  • Identifies business opportunities by locating prospects and evaluating their position in the industry; researching and analyzing sales options
  • Utilizes personal or CAP’s existing relationships to facilitate introductions to potential clients
  • Sells products by establishing contact and developing relationships with prospects; recommending solutions
  • Responsible for developing strong retail, restaurant, and property management industry connections to help identify prospective clients.
  • Prospecting for potential clients, including cold calling, research, in-person meetings, and industry conference participation.
  • Submits sales materials, including customized drafted letters/emails to prospects
  • Aids CAP management in the creation of new marketing materials
  • Conducts sales presentations via the web or in-person
  • Conducts organized follow up with prospective clients
  • Attends industry tradeshows and represents CAP at the company trade booth
  • Maintains professional and technical knowledge by attending educational workshops; reviewing professional publications; establishing personal networks; benchmarking state-of-the-art practices; participating in professional societies
  • Contributes to company social and traditional media communications
  • Monitors competition by gathering current marketplace information on pricing, products, new products, delivery schedules, merchandising techniques, etc.
  • Recommends changes in products, service, and policy by evaluating results and competitive developments
  • Contributes to team effort by accomplishing related results as needed
  • Provides weekly sales report to President/COO
  • Conducts organized follow up with existing clients

Skills and Qualifications

  • Minimum 2 years of selling services to retailers, restaurants, property owners and other commercial property management personnel
  • Established relationships in selling services to retailers, restaurants, property owners and other commercial property management personnel
  • Ability to uncover client pain and sell pain-based value
  • Ability to express ideas clearly in oral and written communications
  • Ability to perform basic math skills, including managing expenses
  • Ability to navigate Microsoft Office Applications and PowerPoint
  • Ability to work independently and to be coached on a regular basis
  • Willingness to frequently travel throughout the United States
  • Bachelor’s degree preferred

CAP Offers

Many outstanding benefits including a competitive base salary with commission, PTO, paid holidays, and company contribution toward health/dental insurance.

Submit resumes to insulm@commercialpreservation.com

Reis: National Retail Vacancy Experiences First Drop Since 2016

Reprinted from Shopping Center Business

One trend in the retail sector is the conversion of empty big box stores into self-storage facilities. For example, Aston Properties transformed a former Kmart store in Monroe, North Carolina into a 70,000-square-foot self-storage facility.

New York City — The national retail vacancy rate fell 10 basis points to 10.1 percent in the second quarter, according to New York City-based commercial real estate data firm Reis. This is the first time in which vacancy has declined since the first quarter of 2016.

For context, in the second quarter of 2018, the rate had risen 20 basis points to 10.2 percent and remained flat at that rate through the first quarter of this year. The tightening of available space is in contrast to the larger talking points about U.S. retail, which often claim a “retail apocalypse” is upon us as e-commerce continues to cause a sea change in how Americans shop.

Reis information comes from its database of commercial real estate property information, spanning 77 primary metro areas.

Both the national average asking rent and effective rent, which nets out landlord concessions, increased 0.4 percent in the second quarter. At $21.39 per square foot (asking) and $18.73 per square foot (effective), the average rents have both increased 1.7 percent since the second quarter of 2018.

Mall outlook

The regional mall vacancy rate rose 30 basis points in the first quarter to 9.3 percent, the highest rate for mall vacancy since the third quarter of 2011, according to Reis. This came in the midst of a number of chains announcing store closures, including JC Penney, Payless ShoeSource, Charlotte Russe and Gymboree. The rate remained flat into the second quarter.

The performance of both malls and neighborhood centers will likely be affected by the continuing store closures throughout the second half of the year. Yet the stability of the trends this quarter shows how the retail sector has been able to withstand structural changes in the industry to some extent, argues Reis.

“As big-name anchor stores clear out, a number of stores continue to open,” says Victor Calanog, chief economist for Reis. “Grocery stores have been a leading new occupant of those vacant spaces over the past year or so, as have home/houseware stores, gyms/fitness, discount variety stores, discount clothing stores and even trampoline parks.”

Absorption stays strong

Store openings have led to strong occupancy growth this quarter, as net absorption outpaced new construction for neighborhood shopping centers. Net absorption for the second quarter was 2.4 million square feet, nearly double the previous quarter’s absorption of 1.29 million square feet. New completions measured just 1.49 million square feet.

When broken down by metro, the statistics show that few cities — 21 of 77 — experienced an increase in vacancy for the quarter. The figure was down from 28 metros in the first quarter. Metros with the highest vacancy rate increase include Columbia, S.C.; Charleston, S.C.; Birmingham, Ala.; San Antonio; and St. Louis. Metros with the biggest decline in vacancy include Chattanooga, Tenn.; Tacoma, Wash.; Colorado Springs, Colo.; Greensboro, N.C.; and Columbus, Ohio.

In sum, Reis argues that the retail sector has been able to ward off the worst of the “retail apocalypse” premonitions so far. On the supply side, empty big box stores have been converted into self-storage or sold to developers for redevelopment, former shopping centers have been demolished and there has been a general slowdown in building within the sector.

With minimal construction in the pipeline, vacancy rates were able to stabilize a bit this quarter, though the retail sector will likely see fluctuation ahead.

“A number of stores are still expected to close in the second half of the year and online shopping continues to offer stiff competition to brick and mortar stores,” says Calanog. “Older stores that are not keeping up with new business strategies or modernizing will likely continue to suffer and close in this tumultuous time. Still, the retail sector has been able to adapt to industry restructuring in a number of ways.”

To view the entire story, visit https://shoppingcenterbusiness.com/reis-national-retail-vacancy-experiences-first-drop-since-2016/

Why You Should Consider Adaptive Reuse for Your Commercial Property

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Adaptive reuse is the process of reusing an old property site or building for a purpose other than the use it was originally built or designed to accommodate. At Commercial Asset Preservation (CAP), we are experienced in preserving commercial properties so that adaptive reuse can occur at properties anywhere in the U.S. and Canada. Learn our top tips for determining if your property is a good candidate for an adaptive reuse project.

Reasons to Consider Adaptive Reuse

While creating a new revenue stream from a vacant building is often the primary reason behind adaptive reuse, landlords can realize so much more. The property owner stands to gain community goodwill, improved market perception, tax credits, and re-utilization of existing property and materials when repurposing a vacant commercial building. Adaptive reuse does not need to be permanent, another consideration can be to provide temporary re-utilization of your building. One example of temporary use is a seasonal pop-up store, which can generate revenue at an otherwise vacant structure. A second temporary use is applicable to larger spaces where the building can function as a staging or care area during the time of a natural disaster.

 

Tax Credits with Adaptive Reuse

When adaptive reuse projects involve historic buildings, developers can often look to tap into a federal tax incentive program known as the historic rehabilitation tax credit. This program generates a credit that directly reduces taxes rather than offering a tax deduction such as depreciation, which reduces taxable income. The credit is intended for income-producing properties and is flexible: for example, if a property originally was used as a hotel, it can find new life as an office building or multifamily project. More information on the historic tax credit can be found in this article.

 

How to Determine if Adaptive Reuse is Best for Your Property

Adaptive reuse is a consideration when the concept or retailer in your property is no longer viable or able to draw a crowd. If the building is a former big box store consider subdividing the building to bring in several new tenants. Adaptive reuse involves seeking tenants outside of the traditional retail marketplace such as:  schools, hospitals, medical centers, community centers, municipal buildings, call centers, entertainment venues and more. Work with local leaders, brokers, and consultants to get a flavor of what might be missing in the area that you can fulfill through adaptive reuse. Nearly any type of reuse option beats a vacant building if build out costs can be controlled.

 

Where Should Adaptive Reuse be Employed

Site location is a primary factor to consider when determining if your property is a good candidate for adaptive reuse. Those buildings which are located in a city center and were once a high traffic location are the most likely candidates for adaptive reuse as these structures catch the attention of municipal officials who desire to have vibrant buildings in the core of their community. Typically, these buildings have deteriorated a bit, but they may have unique physical characteristics and perhaps historic architecture which make the building worth remodeling. A great example of this is Ghiradelli Square in San Francisco. In 1964, the old chocolate factory became the first successful adaptive reuse project, as the property was converted into a specialty retail and dining complex.

It is essential to choose a team that you can trust to protect your property and leave it in a condition where adaptive reuse is a good investment.

Learn more about CAP’s vacant property services, which will help aid you in getting your property ready for adaptive reuse.

 

Potential Issues in Adaptive Reuse Projects

Cost and building codes are two of the biggest challenges when converting an old building to a new use. It is essential for your buildings to be accessible and safe, which can be a big hurdle to overcome when working with older buildings. Often times, the building’s electrical, plumbing, and HVAC systems need to be gutted and replaced entirely in order to meet current safety and environmental standards. Complying with ADA standards may necessitate additional expense. Other important considerations are the credit quality of the new tenant and the potential liability of the business that tenant will be operating in the repurposed space.

 

Why You Should Choose CAP for Your Adaptive Reuse Project

CAP is experienced in giving vacant properties new life and has worked on preserving properties for adaptive reuse projects across the country. Throughout our years in business, we have seen the good, the bad and the ugly. CAP feels confident in saying that it has experienced nearly every conceivable scenario of what can happen to a building. We use our experience and extensive contractor resources to provide clients with a cost-effective solution that places their property in a condition that meets the needs of the client and the municipality while retaining property value and making the building ready for its next life. Considering adaptive reuse for your property? Contact CAP at (801) 461-8250 or inquiries@commercialpreservation.com.

 

How to Choose the Right Commercial Property Maintenance Company Partnership

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At Commercial Asset Preservation (CAP), we understand that commercial property owners and retailers wear many hats! Some of the many priorities they juggle include operating their daily business and managing finances and personnel. Of equal importance is the physical appearance of their properties. Are the properties inviting to the consumer, the tenant and city officials? In order to keep tenants happy and to make their property appealing to consumers, commercial property owners and retailers seek property maintenance companies to take on a multitude of tasks from landscaping to plumbing and remodeling.

Choosing a property maintenance company that your organization can trust is invaluable to keep your facilities in great shape. As experts in commercial property repairs and maintenance across the United States and Canada, here are some tips to consider when selecting your maintenance team.

 

Understanding Your Needs and Expectations

It is essential to have a clear idea of the type of assistance you need from the property maintenance company and what tasks you expect them to perform. Do you want your maintenance team to provide repairs on an as needed basis or do you want them to perform preventative maintenance, or both? Do you only want the property maintenance company to work on the inside of your property or do you want them to maintain outdoor areas, such as parking lots and landscape, or both the inside and outside?

Finding a provider that specializes in the services you require and has a track record of success is critical. At CAP, our staff has provided property maintenance, repairs, and inspections at more than one million properties.

 

Consider Property Location When Choosing a Provider

An important factor when determining the correct maintenance provider for your facility needs is to consider the location or multiple locations where your properties operate. Do you need help with one property, multiple properties in a regional area, or 30+ properties located across the country?

Most property maintenance companies can provide service in specific regional areas or in large cities, but struggle to provide services in rural communities. Many of our customers choose CAP because we cover all of the United States and Canada without any quality or delivery time difference from one location to the next. In fact, CAP performs as much work in rural communities as it does in metropolitan areas.

Therefore, you no longer need to search for individual vendors to repair an entry door at your operating retail center in Atlanta or winterize your vacant office building in Zigzag, Oregon. Simply contact CAP and services in both communities are handled promptly using its extensive network of licensed local maintenance professionals.

 

Screen Potential Providers

You should screen your property maintenance company just like you would a tenant at your building or a potential employee. Conduct research to check into their background, whether they work with companies such as yours, and always ask for references. Find out how long upper management has been in place. Learn how they plan to communicate with you. Will there be dedicated personnel for you to speak with? Determine the hours that they operate and who answers the phone during non-standard hours. If you use an external facilities maintenance data platform, does the property maintenance provider have experience working with that system? Conduct research on the Internet to see if the property maintenance provider is involved in legal issues or has problems paying their vendors in a timely fashion. These extra steps take time, but they are worth it to ensure you choose a reliable and trustworthy company to work at your property.

Commercial Asset Preservation feels confident in saying that it has experienced nearly every conceivable scenario of what can happen to a building. We use our experience and extensive contractor resources to provide clients with a cost-effective solution that places their property in a condition that keeps tenants and municipalities happy and makes their property appealing to consumers. Let us use our know-how to help simplify your property maintenance needs. Contact CAP to discuss your property maintenance needs at 801-461-8250 or inquiries@commercialpreservation.com.

Columbus plans to transform nearly vacant Fair Oaks Mall

Reprinted from WTHR

COLUMBUS, Ind. (WTHR) – Even with a strong start to the holiday shopping season, brick-and-mortar shopping malls are struggling.

In fact, America’s malls haven’t been this empty in years, with tenants vacating store after store.

That includes Fair Oaks Mall in Columbus.

But the city has a unique plan to transform the space into a community recreational and sports tourism complex.

It’s expected to be a record-setting Cyber Monday. But that online shopping surge against a sobering backdrop for brick and mortar malls, where this year, mall vacancies hit a seven-year high.

Some of those massive buildings are so empty, they become eyesores in their communities.

That was the worry in Columbus, where Fair Oaks Mall lost two of its anchor stores last year. Most of its other tenants left, too. The mall is only 30% occupied right now: 400,000 square feet on 36 acres, nearly abandoned.

“Our fear was that it would continue to deteriorate,” said Tom Brosey, a consultant hired by the City of Columbus to help with buying and transforming the mall. “We do not want flea markets, fireworks or just general deterioration of the property.”

So the city stepped in and purchased the property for $5.9 million. Partnering in the project are Columbus Regional Hospital and the Heritage Fund Community Foundation of Bartholomew County.

Instead of a place to buy stuff, this mall will be a place to do stuff: a recreation and sports tourism complex meant to draw people regionally to Columbus for tournaments and give neighbors indoor recreation and community classes.

“That’s one of our prime objectives is to provide the Parks and Rec Department with indoor programming space for all sorts of activities. There will be space for athletic programming, sports, but also cooking classes, arts programming, wellness programs from the hospital,” Brosey explained.

Right now the ice rink is one of the few indoor sports facilities in Columbus. Brosey says parks and ballfields outdoors are plentiful, but city leaders saw the mall as a potential place to increase indoor recreation.

“We would like turf fields that would be used for all diamond sports – softball, youth baseball and soccer, rugby, lacrosse, all of those sports,” Brosey said.

He says some existing stores may not have to leave the mall. Dunham Sports, the remaining anchor store for example, could compliment a recreation complex.

Read the original story here

Fed Up With Vacant Storefronts, Residents Force Cities To Punish Retail Landlords

Reprinted from BisNow

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Coast to coast, bustling retail meccas used to embody a decidedly American pastime: shop till you drop. But empty storefronts across the U.S. have cropped up in places that go far beyond the “retail apocalypse” that has battered suburban malls — and some municipalities are fed up. From retail corridors nestled in some of New York’s trendiest neighborhoods to wealthy bedroom communities just outside of Boston, vacancy signage is becoming more common than glitzy placards announcing a big sale. Bisnow/Julie Littman Empty ground-floor retail space in downtown San Francisco Local governments, wary of landlords who choose to keep their properties empty — sometimes for months and years in the hopes of landing a deep-pocketed tenant — are now responding by exacting financial penalties against these proprietors.

“There was uproar from residents over what these [landlords] were doing and how they were getting away with murder,” said Ali Carter, the economic development coordinator for Arlington, Massachusetts. “

Residents just see a vacant storefront and wish it was a coffee shop or bookstore. They’re peeved.” Arlington began its measure in early 2017. It requires landlords to register with the city and charges them $400 annually for each vacant storefront. When the fees were first levied, there were 17 empty storefronts in Arlington Center. Only six remained by the end of the year.

Larger cities, like New York and Boston, are mulling similar measures. Retail vacancies in Manhattan’s West Village neighborhood were up to 11.3% in June — and some parts of SoHo have even hit 20%. In Boston, vacancy rates on the city’s high street of shopping, Newbury Street, were around 10% at the end of 2017. A retail vacancy rate of 5% is generally accepted as the industry standard for a healthy market, according to brokers. But landlords and developers suggest vacancy fees are not the best solution.

“It’s forcing capitulation, and it’s the government injecting itself into the marketplace to get a result they don’t understand,” Fisher Bros. partner Winston Fisher said. Fisher, whose family-run company is one of the largest developers in New York, and others suggest more market-driven solutions, such as pop-up retailers or different leasing agreements, to fill those empty spaces may be better for the long-term support of retail in a community. But even as landlords explore such alternatives, several cities are moving forward with vacancy fees.

Taxation Until Reactivation Wikimedia Commons/Tim Pierce The Capitol Theater building in Arlington, Mass. Other cities are hoping to replicate Arlington’s visible success. Carter has been called to testify on the city’s measure in municipalities across the country. She said, however, each region has to tailor its vacancy regulation to fit market conditions.

“Whatever sort of solution they come up with has to be tailored to their community,” she said. “For the 700 or so businesses in our town just outside of Boston, this is not Greenwich Village. It’s a totally different scenario.” New York City Mayor Bill de Blasio has proposed a fee or tax to penalize landlords with vacant retail space.

Other city leaders are advocating a vacancy tax on commercial strips. In San Francisco, neighborhood commercial districts such as the Castro and the Mission District are seeing an increase in vacancy rates, according to a February report by the San Francisco Office of Economic and Workforce Development. Sales tax revenue slowed between 2015 and 2016 and the demand for ground-floor retail space has declined.

In response, Supervisors Aaron Peskin and Jane Kim are leading the fight for a vacancy tax. Kim told hyperlocal news site Hoodline the Mayor’s Office of Economic Development and small business commission should do more to fill vacant spaces. She would consider a vacancy tax “to encourage landlords to rent out these spaces.” Peskin and his staff told Bisnow he is working on a draft to include a vacancy tax on a future ballot.

Boston City Councilor Matt O’Malley is pursuing vacancy penalties in his city, inspired by Arlington.  Cities see storefront vacancies as a missed opportunity to generate sales tax, which pays for city services, said Lee & Associates Pasadena Founding Principal Dan Bacani, who once served as an economic development consultant for the city of Arcadia, California.

Arcadia, about a 17-mile drive northeast of downtown Los Angeles, is not proposing a vacancy tax but, like many cities across the nation, is grappling with how to deal with empty storefronts. “Some cities have poor opinions of landlords because the space is vacant,” Bacani said. “But implementing a tax will only have a negative effect and further hurt relationships.”

Read more at: https://www.bisnow.com/national/news/retail/fed-up-with-vacant-storefronts-residents-force-cities-to-punish-retail-landlords-91715?be=%7B%7Bemail%7D%7D&utm_source=Newsletter&utm_medium=email&utm_campaign=mon-13-aug-2018-000000-0400_new-york-re?utm_source=CopyShare&utm_medium=Browser

A Macy’s Goes From Mall Mainstay to Homeless Shelter

Reprinted from The New York Times

macys-homeless-shelter

ALEXANDRIA, Va. — Karleen Smith used to work at the Macy’s in Landmark Mall, putting price tags on summer dresses, housewares and the latest styles of shoes.

On Saturday, Ms. Smith, 57, returned to her former store, not as an employer or a customer, but as a resident.

The former Macy’s in this vacant shopping mall outside Washington has been transformed into a homeless shelter.

“It’s weird to be moving into this building. I used to work here,” she said inside the shelter’s common room, which was once the men’s department. “It’s called survival.”

As shopping malls struggle to survive in the era of Amazon, communities are looking for new uses for all the retail space. Some empty stores are finding another life as trampoline parks, offices, college classrooms, and churches.

At the vacant Macy’s in Alexandria, the Carpenter’s Shelter, a nonprofit group, moved into its temporary home last weekend, 15 months after the last shopper rang out. The former store now provides 60 beds, hot meals, and showers for families and for single men and women who are having trouble finding a place to live in a city with a scarcity of affordable housing.

The Landmark Mall was once at the vanguard of shopping.

Opened in 1965, the mall housed the region’s most fashionable department stores, Hecht’s, Woodward & Lothrop and Sears & Roebuck. Boys came to buy their first suit at the haberdasher, and teenage girls could get their shoes dyed to match the color of their prom dress.

Alexandria’s former mayor William D. Euille remembered playing the clarinet in the high school band at the mall’s opening ceremony. “It was the economic engine of the city,” he said.

Landmark tried to adapt over the years. It began as an open-air shopping center and went through an overhaul in the 1980s to enclose the property.

Eventually, the mall succumbed to retail’s propensity to chase after newer, flashier spaces. Developers built larger malls with more upscale brands nearby in Pentagon City and Tysons Corner, siphoning customers away from Landmark.

Landmark’s original anchor stores either have been bought out, went bankrupt or are clinging to life — like many in the retail business. Last year, 6,985 stores closed in the United States, a record number, according to Coresight Research, a retail analysis and advisory firm. This year, retailers are on a pace to close roughly 10,000 stores.

In its final years of operation, the Landmark’s tenants included two dollar stores and a tax preparer. Only the Sears is still operating. A lone, blue inflatable figure dances on the store’s roof, beckoning shoppers.

To read the full article, visit the link here: https://www.nytimes.com/2018/06/13/business/macys-homeless-shelter.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype

Boston City Councilor Eyes ‘Vacancy Fee’ To Tackle Empty Storefronts And Homes

empty-storefronts

One Boston politician is tired of seeing vacancy signs in even the city’s poshest neighborhoods.  Boston City Councilor Matt O’Malley announced Monday he will introduce an order for a hearing at Wednesday’s Boston City Council meeting to address vacant properties throughout the city. The move comes in response to empty storefronts in high-demand business districts like Back Bay and vacant units in luxury multifamily buildings. The order is expected to include data collection on vacancies throughout Boston. If a fee were to be levied, funds would go toward affordability initiatives or to reduce property taxes for occupied properties, according to O’Malley’s release.

The idea is not unique to Boston. New York City Mayor Bill de Blasio announced Friday he wants to penalize landlords who leave storefronts vacant for long stretches of time while they seek top dollar for rent, the New York Post reports. The move comes as historically high-traffic retail corridors like SoHo are tackling double-digit vacancy rates.

“I am very intere  sted in fighting for a vacancy fee or a vacancy tax that would penalize landlords who leave their storefronts vacant for long periods of time in neighborhoods because they are looking for some top-dollar rent but they blight neighborhoods by doing it,” de Blasio said to WNYC.

Read more at https://www.bisnow.com/boston/news/retail/boston-city-councilor-eyes-vacancy-fee-to-tackle-empty-storefronts-and-homes-86904?be=insulm%40commercialpreservation.com&utm_source=Newsletter&utm_medium=email&utm_campaign=thu-12-apr-2018-000000-0400_national-re?utm_source=CopyShare&utm_medium=Browser

The Impact Of Commercial Redevelopment On Local Communities

Reprinted from ThanMerrill.com

Photo credit: ThanMerrill.com

Commercial redevelopment has become synonymous with the most lucrative exit strategies known to investors. While their commitment is more than that of the average residential project, the returns can be much more impressive. It’s worth noting, however, that returns extend far beyond padding your bottom line. The right commercial redevelopment project can revitalize an entire community in more ways than you may know. The next time you decide to take on a commercial project, make sure you understand just how much your impact may be felt.

COMMERCIAL REDEVELOPMENT & THE LOCAL COMMUNITY

A commercial redeveloper, not unlike their residential counterpart, has a much greater impact on the local community than many can even begin to fathom. Outside of the obvious appreciation redevelopment provides for a subject property, communal benefits extend far beyond the building in question. In fact, you could argue that commercial redevelopment is a viable catalyst to stimulate economic growth in everything from small businesses to individual homeowners. The ripple effect resulting from a proper commercial redevelopment project can have a resounding impact on a community for years — if not decades.

Done properly, commercial redevelopment can improve a local community in more ways than one, and there is no reason your next project can’t be the one to do so.

Appreciation

First and foremost, commercial redevelopment is entirely capable of resulting in a higher price point. Not surprisingly, remodeling a commercial building will increase its value and result in more demand — the two things that make this exit strategy attractive to investors in the first place. With that in mind, residential redevelopers aren’t the only ones that benefit from their efforts to improve land. It’s worth noting that the subject property in question isn’t the only one to benefit from an increase in value. If for nothing else, commercial redevelopment has become synonymous with a domino effect of sorts; it’s not uncommon for the prices of nearby properties to be buttressed by the increase of the building being remodeled.

Redeveloping a building can improve its own value, which begs the question: how does the improvement of one property inherently impact those around it? The answer is simple, and perhaps even something most real estate investors — commercial or residential — are already familiar with: comparables. In their simplest form, comparables (or comps) are a real estate appraisal concept used to identify properties with characteristics that are similar to a subject property whose value is being sought. They are, more or less, one of the most accurate strategies used to determine the value of a similar property within close proximity. In short, if the property you are using as a comp has appraised at a higher value, the subject property will benefit.

Job Creation

Even more so than residential projects, commercial redevelopment is responsible for stimulating the economy. The larger and more complex nature of a commercial property deal will require more boots on the ground. It shouldn’t surprise anyone to hear that more people will be involved in a commercial project than a single-family home. That means more contractors to remodel the interior, more painters, and perhaps even more litigation. For better or for worse, a commercial redevelopment project will require a lot more work, and a lot more people.

Every dollar spent on commercial redevelopment — in one way or another — is put back into the community. The next time you buy nails form the local hardware store you are stimulating business on a level that is magnified exponentially, at least when you consider how many people have the same idea. The plumber you need to be sure everything is in working order will need to come from somewhere. When it comes down to it, the needs of a commercial redeveloper create a demand for local business, and that demand translates into jobs.

Just off the top of my head, I can expect a commercial redevelopment project to enlist the following services:

  • Contractor
  • Mortgage broker
  • Inspector
  • Appraiser
  • Closing agent
  • Notary
  • Title insurance agent
  • Insurance agent
  • County clerks
  • Attorney
  • Handyman
  • Electrician
  • Plumber
  • Roofer
  • Painter
  • Mason
  • Investor

Remember, when you are redeveloping a commercial property, there is a good chance you are helping a lot more people than you may be aware of.

Free Up Available Money Supplies

Less pronounced than that of job creation, but nonetheless important, is the impact commercial redevelopers have on financial institutions. While it’s true you may enlist the services of a mortgage broker, your position in a community extend far beyond that of job creation. It’s entirely possible for commercial redevelopers to ease the burden of nonperforming loans on the books of financial institutions and improve available money supplies.

For what it’s worth, banks aren’t in the business of holding on to properties, especially those of the non-performing variety. When a property is foreclosed on and repossessed, it is a drain on the institution’s money supply. Acquiring non-performing loans provides banks with more work and no monetary gains. Therefore, those that continue to accumulate non-performing loans (foreclosures) are subjected to a significant financial burden.

Fortunately, the same properties placing a burden on banks have become a commodity for commercial redevelopers. Banks want to get rid of non-performing loans, and commercial redevelopers are more than happy to take them off their hands; it’s a win-win. Investors are given access to bargain prices and banks no longer have to maintain the properties draining their money supply. The excess capital banks hold on to can be expected to account for better loans at lower rates for local businesses.

Community Revitalization

Commercial redevelopment has a resounding impact on the local community, and the extent of the benefits are only limited by the building itself. The right project could very well buttress an entire community. It’s possible for a commercial real estate project to spearhead a massive job opportunity movement. At the very least, any business that buys the property will need employees to fill it. Those jobs infuse the local economy with capital; capital that can go a long way in revitalizing a neighborhood.