Increasing the value of your property doesn’t mean you have to gut and flip the entire space – quite the opposite. Often times, subtle upgrades and small details, as well as improvements to curb appeal can go a long way to increase the value of your investment.
When working with your tenants, it’s both beneficial and important for the two parties to actively collaborate and communicate through any renovation or construction process. Before getting started, take some time to sit down with your tenant to talk about what they envision for the space, and gauge to see if you share any design or current trend commonalities; there’s a good chance they have similar thoughts about the curb appeal or fit and finish of the space as well and will happily accommodate construction time to improve the value of their business space.
When tenants and business owners do well – landlords do well as a direct result.
Simply put, tenant improvements are capital improvements negotiated into many leases to prep the space for the tenant’s occupancy, and to encourage long term rental agreements. The tenant may agree to make improvements themselves in exchange for cash incentives or a reduction of rent. Or, landlords may desire to undertake the work themselves. Either way, the improvements remain the capital property of the landlord.
Consider updating the lighting design of your tenant’s space that makes the best use of natural and artificial light to best illuminate the property. This can be done by updating lighting fixtures to a more postmodern design, eco-minded bulbs to increase efficiency, or by using task lighting for individual work stations, if the property is being used as an office building.
Using spotlights, pot lights, or wall accent lighting can draw attention to and add brightness and colour to under lit spaces. This is particularly beneficial if the walls in question boast an interesting texture, piece of art, menu board, etc.
Adding control to lighting for your tenants allows them to manage their electricity usage as well, meaning they save money over time, helping to make the decision to sign, or extend their lease for another pre-determined length of time.
From landscaping, to a fresh coat of paint, to an entire storefront makeover, the curb appeal of your property, and your tenant’s business is a huge factor in adding value to tenant improvement negotiations.
Small details like sandblasting existing exposed brick for a refreshed look, adding perpendicular signage, changing out old windows for larger frameless open-concept replacements, or even using the tenant improvement allowance to enhance permanent storefront displays, can turn a tired storefront space into a fresh and intriguing space that will attract new customers.
These are the things that customers and passers-by notice immediately, despite them being small, often insignificant factors to landlords and tenants. Things like the finish of the flooring, wall coverings, shabby drywall work, poorly finished caulking around windows and sills.
This doesn’t mean the businesses targeted market is picky, it just shows how much shoppers appreciate an experience when considering where to spend their time and money. Landlords can easily offer to pay for some upkeep work to existing spaces to update the fit and finish of the tenant’s space.
Consider refinishing original hardwood floors, updating electrical socket coverings, changing windows, replacing or refinishing damaged drywall, or levelling out the odd counter or reinforcing a staircase. These changes and updates not only provide a better experience for the tenant’s customer base, but improve the value of the landlord’s investment.
Accessibility for all needs to be a factor that’s taken into consideration as soon as a new business decides to open their doors to the public. Further, if a space is not wheelchair accessible, landlords have a responsibility to make this happen for their tenants.
The real value here, is thinking in terms of respect and inclusiveness. A business and property that is not wheelchair accessible will lose all business from disabled people, and the shoppers they are with, meaning accessibility can’t be ignored or thought of as a ‘value added’ type of investment.
Discuss with your landlords, or alternatively, your tenants and ensure that the property is accessible for all. This may mean widening a doorway, installing a ramp, adjusting the height of retail counters, etc.
Health conscious design and eco-friendly spaces are no longer niche markets or concerns for landlords and their tenants – they now factor in prominently to the design and operational decisions of many tenants and business owners.
Embracing energy conservation with an appealing aesthetic to drive foot traffic and revenue potential is a wise choice for both tenants and landlords. Through a tenant improvement allowance, tenants are allotted a budget in partnership with their landlord to customize and renovate their spaces.
Discuss using a portion of this allowance to address issues of sustainability and efficiency, making energy conservation – and possible savings – a primary concern for both parties. These allowances are typically negotiated during leasing agreement discussions.