It’s a common refrain that office remodels have little to no impact on the property value of a building, which is why the process is so controversial.
That argument has some experts questioning whether it’s worth the effort.
Here are three ways to turn your $1 billion office remodeling into a major property gain for your neighborhood:1.
Remove an old office and replace it with an entirely new one2.
Remove the old office building and build a new one3.
Create a unique community space that offers a unique opportunity to build valueCommunity space in the heart of an area is a great opportunity to attract and retain new residents and investors, said Jeff Johnson, a real estate broker with WLK-FM in Detroit.
He said if you are planning a project in Detroit’s inner-ring suburbs, it’s likely that you would want to do it on the Eastside.
But it’s also important to understand that not every project needs to be in the city’s inner city.
“If you have an office in the suburbs, you need to be able to have a sense of ownership,” Johnson said.
“If you don’t have a lot of office space in your community, then you need a more urban feel.”1.
Unveil a new office building in an old location.
The $1 million price tag is a common justification for the office remodelling process.
But what if you don “need to” move?
That’s where a $700,000 loan comes in.
“The $700k is to make sure that you don and will move, ” said Dan Stober, a partner with WLS Partners, a commercial real estate investment company in Michigan.
In order to get that loan, you want to make a lot on the site and a lot off the site, which means you want a lot,” Stober added.2. “
The goal is to get this project done and done quickly, but you don&#%#t want that project to be a $10 million project.”
In order to get that loan, you want to make a lot on the site and a lot off the site, which means you want a lot,” Stober added.2.
Add an office space that’s unique to the area.
The most commonly used excuse for a $900,000 office renovation is that it’s a “unique opportunity” to build “a community space.”
But there are other reasons to include an office, said Stober.
t want a building that looks like a mall, or one that’s empty and just plain boring.”
It?s a great way to get people in and out,” he said.3.
Add a retail store or restaurant.
An office renovation can also be a great investment if you can add a “cultural touch” to your neighborhood, said Mark Hirsch, president of Hirsch Associates in Michigan, and a former corporate vice president at the Detroit News.
A building that’s in the middle of nowhere is more likely to attract a lot more people to live in the neighborhood, but a more walkable downtown can help attract people who would otherwise live elsewhere.”
A lot of people that live in neighborhoods that have been hit hard by gentrification don?
and are trying to get back into their homes and businesses,” Hirsch said.”
That?s really what I would look for in an office renovation, is that you?re going to do something to connect the people that you are building with people that they might otherwise not have connections to,” he added.
The idea of adding a restaurant to an office project is more complicated.
But a restaurant can attract an influx of new residents, and the owners are more likely than other businesses to have other jobs to supplement their income, said Michael Sallinger, the director of corporate development for the Detroit Economic Development Corporation.
The cost of a $300,000 renovation can go a long way toward keeping an office building afloat.
But if you decide to remodel an entire building, you may be able find yourself with $900 million or more in the bank, said Hirsch.”
T want to throw the money away on an empty office building, but that doesn?t mean you don ?t need to,” Sallerson said.
The bottom line: Invest in a project that you feel will be of value to your community.
And remember, you can always ask for more money.