In today’s ever-competitive commercial real estate market, technology plays a critical role in appreciating your property. To give you an example, the integration of cutting-edge technology can give you insights into what property improvements to make. This can make it more attractive to tenants and investors. Furthermore, state-of-the-art security systems such as CCTVs offer advanced protection against crime. A secured property is more attractive to tenants, and can lead to long-term leases and reduced turnover rates. In addition, technologies can also help you or your property management firm offer streamlined communication, resulting in satisfied tenants, and in turn, property appreciation.
In this article, we’ll explore the different ways that technology can speed up your commercial property’s appreciation processes. Keep these benefits in mind so you can unlock your property’s full potential.
What Is Commercial Property Appreciation?
This term refers to the increase of your commercial property’s value over time. It can occur due to supply and demand dynamics, location, improvements done to the property, and economic conditions. A property is said to have appreciated when its value goes beyond the initial cost to buy the property.
However, appreciation is not guaranteed, as it largely depends on conditions that can fluctuate. To give an example, during the COVID-19 pandemic, the value of many commercial properties plummeted due to the decreased demand resulting from work-from-home mandates. As businesses moved out of offices—with some permanently switching to remote setups–commercial properties were put in a vulnerable position.
Note that appreciation is not to be confused with commercial property valuation, which is the process of calculating the monetary worth of a property. This task is commonly carried out by commercial property appraisers, whose role is to provide an accurate estimate of your investment’s value in the current market. It can be useful if you’re on the fence about buying a particular commercial property. Having a valuation can ensure that you buy it at a fair price, and give you peace of mind, knowing that it will generate a good ROI.
Why Is It Important to Increase the Value of Your Property?
Increasing the value of your commercial property is important as it allows you to position yourself in the market. This can attract more tenants, as it’s no secret that commercial tenants are more likely to choose well-maintained, modern properties with innovative amenities. With your competitive edge, you can set yourself apart from your competitors, make it more well-known and desirable, and build a solid reputation for your business. This can potentially lead to higher rental rates.
Furthermore, it can maximize your chances of securing more favorable financing terms. This can be useful if you plan to take out a loan to expand your portfolio. Finance companies are more open to offering low-interest rates—not to mention larger loan amounts—if a commercial property has a high value. (Pro tip: Property investment services can help you expand your portfolio by searching for profitable properties on your behalf).
Another reason why asset appreciation is so important is that it allows for the long-term growth of your wealth. When your commercial property’s value increases, so does your net worth.
How Technology Can Increase Your Commercial Property’s Value
Below, we break down the role that technology has in improving your commercial property’s value:
Smart Systems
Commercial properties that are equipped with smart systems, such as centralized control of HVAC, lighting, etc., are more efficient. This efficiency increases their value over time. Furthermore, it cuts operational costs, demonstrating to potential investors that the property is performing financially well. In other words, investors will see it as an attractive investment opportunity.
Building Security
Robust security in the form of state-of-the-art surveillance systems, biometric authentication, etc. fortifies the property. This reduces the risk of crimes like theft and makes the property more attractive to a vast pool of prospective tenants. The guarantee of security further enhances the property’s value, positioning it as a prime location.
Energy-Efficient Features
Environmental awareness has grown among commercial tenants, making it crucial to align yourself with their green goals. By incorporating LED lighting, smart thermostats, solar energy, and other amenities, you’ll be able to show your tenants that you’re also aiming to be more eco-friendly. Furthermore, you’ll be able to position yourself as the top choice for those willing to pay a premium for energy-efficient features.
Building Management Systems
Building management systems (BMS) can detect problems with your building’s systems (e.g.HVAC) in real-time. This allows your team, such as your commercial property management company, to carry out preventive maintenance and provide a swift response to repair-related concerns. This means you can lower the risk of accidents and downtimes. Through BMS, you can ensure your property performs optimally at all times, preserve your property’s value, and in turn, provide your tenants with a more comfortable experience.
Data Analytics
In addition, BMS enables property managers to monitor the building’s “health” and collect data on energy usage, occupancy, and more. This information can help you identify areas for improvement, enhance your team’s decision-making processes, and help you to use and allocate your resources correctly. Plus, it allows you to compare your property’s performance with others to ensure that it meets industry standards. As a result, you can maintain your commercial property’s competitiveness and increase its value in the market.
Tenant Platforms
The use of tenant platforms not only ensures more efficient communication between your team and tenants but also facilitates fast issue resolution. Your tenants can report maintenance requests with ease, submit inquiries, and more, contributing to loyalty and resulting in lower tenant turnover. This can positively impact your property’s reputation, and therefore, its value.
Let Us Help With Commercial Property Valuation
There’s no doubt that technology can help increase your property’s value over time. If you aren’t sure where to start, consider partnering with commercial property management services in your area. At Luxury Property Care, we can identify opportunities for improvement and implement cutting-edge upgrades that enhance your property’s appeal. Our goal is to ensure your property continues to appreciate for years to come, so you can stay ahead of the competition.
Call us at (561) 944 – 2992 or complete our contact form today for more information.
