Owners of industrial and commercial real estate have a unique opportunity to reinvent their investments when the national and local economy changes and demand for their type of property decreases. In this, the first part of an ongoing series about reinventing industrial and commercial property, we will explore how property owners and investors alike can make the best of any market condition by changing the focus and use of their real estate investments.
The mini-storage business is frequently affected by increases and decreases in economic demand, whether immediate or delayed. These properties are regularly - almost exclusively - used for the storage of non-perishable household and office items, such as furniture, business supplies, and the like. Mini-storage facilities generally rely on low-rent returns on individual units; however, in a moderate to lethargic economy, demand for such small storage units can decrease dramatically, leaving facility owners with dangerously low revenue. This is the perfect time for reinvention.
Mini-storage facilities are realizing a resurgence in secondary-to-primary use. This becomes evident when these facilities are utilized in a capacity different from their intended use, but yet, in a capacity they can logically assume. With the right modifications and promotion, mini-storage facilities can easily transition to the role of an outdoor shopping center or individual, specialized warehouses tailored to small business, that in turn, can become the storefront of the small business. Slight changes such as these enable the property owner to increase rents from approximately $3.00 per square foot to as high as $17.00 per square foot, depending on the area. As a result, this increase in per-square-foot rent increases the property's overall value substantially.
Reinvention is the word to remember. It is a word we think of and implement constantly at Industrial Commercial Real Estate. Contact us today for an evaluation of the highest and best use of your industrial or commercial property.