Realize the ROI of Building Improvements
Noesis, January 20, 2015
It’s not just enough to own, and hold onto, a commercial or industrial building. To get maximum value from your property, the following need to be considered: updates to the building to keep up with comps; the need for high/consistent occupancy rates; and how a property lien can affect the sale. Energy-related projects, energy efficiency, retrofits, and sustainable design are all industry buzzwords and they are all a distration from the real, tangible incentive…cash flow. In presenting a project proposal that talks about ROI, increased cash flow back to the business, and increased value, what would stop you from approving the project? Here are 4 points to take into account while considering your real estate investment portfolio.
Today’s Efficiency Investment Trend
US commercial building owners will spend $14 billion on building projects in 2014 to improve their buildings’ energy efficiency, and continues growth is expected. Despite public pressure for increased energy efficiency to combat climate change, the primary driver for these investments is not reducing carbon emissions or safeguarding the environment; instead, it’s the clear and low-risk investment opportunity to increase the operating cash flow and value of the buildings themselves. It’s actually a financial investment, and building owners are increasingly using their own capital or borrowing funds to exploit this highly attractive market opportunity.