Remodeling ROI: The Most Impactful Changes for Your Commercial Space
The importance of ROI considerations when remodeling a commercial space cannot be overstated. A thoughtfully developed ROI evaluation helps key stakeholders make informed decisions, allocate resources effectively, and ultimately measure the success of their remodeling efforts. Like home renovations, not all commercial space remodeling projects are created equal. So, where should you invest when creating a commercial space remodeling project?
Assessing Your Space
Start by clarifying your short-term and long-term goals to ensure that your remodeling project aligns with your objectives, such as expanding your customer base, increasing revenue, creating future flexibility, or improving operational efficiency. Then, evaluate the current state of your space through this lens:
Do you have any safety concerns or structural issues like roof leaks or cracks?
Are there any water leaks, rust, or outdated equipment?
Does the commercial space have any compliance, such as ADA or safety issues?
Next, consider how the commercial space is currently being utilized and whether that usage is optimized. Look at traffic flow, workspaces, and storage for clues. Once you’ve established your goals and evaluated the property, it’s time to set the budget constraints and consider what remodeling changes could most significantly impact your commercial space.
Key Remodeling Changes
Where to start? What’s the lowest-hanging fruit that aligns with your marketplace? Each of the following half-dozen types of remodeling changes offers the potential for positive ROI, depending on the current state of the commercial space.
a. Exterior Upgrades: Remodeling the exterior of a commercial property can significantly improve the “curb appeal,” which makes it more attractive to potential customers, tenants, or buyers.
b. Interior Layout Reconfiguration: Optimizing an interior layout makes a space more functional, efficient, and attractive to new prospects. It can also reduce vacancy rates by helping to retain existing tenants longer.
c. Energy Efficiency Improvements: Virtually all energy improvements, from LED lighting to HVAC upgrades, lower operating costs over time, which can directly impact ROI. These upgrades can attract environmentally conscious customers and investors. Additionally, many local governments offer incentives and tax credits for energy-efficient improvements, which can offset costs and enhance ROI.
d. Technology Integration: Technological advancements can give a commercial space a competitive edge while attracting tech-savvy customers and providing a gateway to higher rental rates.
e. Interior Design Refresh: A modern and attractive interior can make a commercial space more competitive, leading to higher rental rates or property values.
f. Accessibility Enhancements: ensuring accessibility compliance with ADA regulations can mitigate legal risks and potential fines while attracting a broader customer base.
Budget and Planning
Once you’ve chosen the remodel for the commercial space, it’s time to put together an execution plan.
Creating a Remodeling Budget and Plan
First, tighten up your budget parameters and outline a plan. Specifically, what are you looking to accomplish, for how much money, and on what timeline?
While cutting costs through cheap labor may be tempting, the risks are significant and may only be evident later when you fail an inspection and are forced into a redo before the sale. Hire professionals with experience in your type of project. Check references.
The Role of A Commercial General Contractor
Contractors are the ones executing your vision. Typically, a general contractor oversees the project by ordering supplies and managing the subcontractors in a specific order. Ideally, each subcontractor shows up to perform their duties promptly so the next subcontractor can carry on. Commercial general contractors typically maintain relationships with their subcontractors so that they reliably stay on schedule. Unfortunately, delays are inevitable, so plan accordingly.
To measure ROI, you first need to look at your goals for the commercial space remodeling project. Set your criteria against those goals; you can’t measure what you can’t track.
How to Calculate and Track ROI
Start with your initial budget and adjust throughout the remodeling project until you finally have a number for your investment. Then, begin tracking against your project metrics over time to see how your ROI compares to the target. Use the results as a playbook for future remodeling projects.
Completely Transform Your Commercial Space With Buildout Pros
Successful commercial space remodeling hinges on strategic changes, precise budgeting, and professional execution. Assess your space, align goals, and prioritize impactful changes for optimal return on investment (ROI).
Partner with Buildout Pros today for seamless project oversight and minimal delays. Let our experts help you measure ROI with clear criteria, track adjustments, and monitor metrics for future project guidance.
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