When it comes to commercial real estate returns design and branding are far from frivolous. Those that know how to leverage these elements for their investment properties are proving to easily secure double digit improvements in performance.
So how can commercial property landlords apply these factors to their investment property portfolio?
How Design and Branding Became Everything in Commercial Real Estate
Even though the US rental market has become incredibly tight, and there are still deals on distressed foreclosure properties, renters and home buyers continue to vote for better design and the lifestyle they desire with their dollars.
We are seeing prime new construction sell out well above market value, even while foreclosure properties have sat idle for years, trendy coworking spaces maximizing occupancy at rates above private offices despite availability, and premium retail properties trafficked by plenty of consumers even though the data suggests over a third of Americans are barely making it from pay check to pay check.
In prime developments from the South to West Coast and Northeast well branded commercial properties are achieving growth and revenues at high double digit premiums compared to other spaces. In many cases this difference can be directly attributed to design, branding and marketing alone.
This doesn’t necessarily have to be at the top end of fashionable brands either. Yes, the most affluent global buyers and investors share an appreciation for art and fashion in property. However, even mid and low end properties can elevate their performance with the right improvements and story.
Much of this traction today also comes from consumer immunity to advertising, and the trend to inbound marketing. To win leases and shopping dollars the most successful are realizing they need to do more to simply attract and become magnets, rather than spam.
In Multifamily Property Investing
Consultant to some of the most notable developers in the sizzling South Florida region, Kaya Wittenburg has recently been revealing some of the secrets to creating the most in demand condo and mixed use buildings. Via Realty411 Magazine and G-Code Magazine he has said investing in the design of lobbies and common areas shouldn’t be underestimated, and can make a huge difference in results.
For Retail Properties
Recent commentary on the retail property market from the CCIM Institute and the ReDev Group in Canada suggest that shopping plaza owners will do far better in attracting a better tenant mix by upgrading curb appeal and incorporating features which show the landlord and property is connected with new technology and shopping trends, like including parking spaces for those picking up goods after ordering online and from their mobile devices.
For Industrial
One firm just went incredibly bold with a 500,000 square foot industrial space on spec. Many cities are also finding they have been able to make incredible come backs by promoting the revitalization of art districts, new ‘hipster’ neighborhoods, and attracting players in the Maker Movement.
Office
The office sector is experiencing similar demands and trends. No longer is just providing space enough. What will your address and building do to enhance productivity and profit for tenants?
Residential
Even in the single family rental market stories and positioning can make a difference at all levels too. Positioning as both smoker friendly or prohibited units, pet friendly units, short term lifestyle rentals, and even units providing renters with less than great credit and enabling them to gain traction in moving back to their dream lifestyle can all make a difference in leasing rates and NOI.
While this may all sound a little over whelming and like a lot of work for the many passive income seeking investors that just want easy cash flow and above market returns it doesn’t have to be. With the aid of a savvy property management firm even small tweaks to verbal branding and simply more intelligent choices in value add improvements can go a long way.