In commercial real estate agency, you will find that the redundant properties in the local area are a good opportunity for redevelopment or repositioning. Either way you as the local commercial real estate agent can be of relevant and real assistance to the property owners.
Many properties today that are regarded as ‘redundant’ for one usage are simply repositioned for a different ongoing life. The older commercial office properties can be converted to residential apartments. The change of life does depend on local property zoning and the necessary approvals; however there are some good commissions and sales to be made by helping property owner’s move through this life cycle change with their investments.
So what is a redundant property? Try some of these:
- The vacancy factor in the property is on the increase and is not likely to slow or reverse.
- The age of the property is making at a less attractive to occupants.
- Newer properties in the area are attracting tenants away from the older assets.
- The costs of running an older building are becoming prohibitive and unrealistic.
- The net income from the property is being impacted by excessive outgoings and a high vacancy factor
- The property precinct is changing and thereby putting pressure on current usage and future leasing.
- The pressures of car parking are making it difficult for tenants to run their business
- Public transport and highway infrastructure is no longer supportive of property use and occupancy
- The local businesses and industries have changed forcing a change and property usage.
So it should be said that change is a good thing in commercial real estate. You just need to see the opportunity in that change and work with the clients to help them move to the next stage of their property investment cycle.
To stay ahead of these changes and opportunities, visit the local planning office on a monthly basis to understand current and future considerations that apply to property zoning, usage, transport infrastructure, and community demographics.
The local planning office will have a good understanding of pressures and changes. They should be working ahead of the issue to allow property owners and developers to make the necessary investment changes.
The ownership of commercial real estate is on average based on a cycle of 7 to 10 years. In that time frame, sufficient capital growth or change will have occurred for the property owner take the next step in their investment. That can than involve selling, purchasing, or redevelopment. That is why the establishment of a long term client relationship in our industry is so important.