EXPERTS AID TO CONSIDER FACTORS the following IN THE ANALYSIS:
•;What types of tenants are
currently shopping for
space and how can the
vacant space be modified
to attract such tenants?
•;How much space do
demand in the current
can the vacant space
be renovated to
•;What will it cost to
renovate the space?
•;What can the market
tolerate in terms of rents?
•;Can the floor plate be
•;How quickly can the
space be leased?
money is different. At the end of the
day, the opportunity cost of these
projects is an individual decision
by owners as to how they want to
spend and make their money.”
As a result, real estate experts
said an analysis of the market and
potential tenants is critical to deter-
mining whether renovating a space
before a tenant signs the dotted line
makes business sense.
“The key is to do research,” Fisher
said. “Know the businesses that are
in the area and the businesses that
are missing, and go after the con-
cepts with the strongest promise.
I would avoid hunches. Make sure
your market research shows a case
for such renovations.”
Thoughtful, researched analysis
should help an owner make an in-
formed decision about the costs of
pre-finishing or white-boxing an
empty space, versus the potential
upsides of taking on such initia-
tives, real estate experts said.
“Whether these strategies will
work is building specific and market
specific,” Day-Harrison said. “What
works here, doesn’t work there. You
need to do your homework. But
every day a space sits vacant, the
owner is losing money. That’s why
it’s important to try anything and
everything to get a space leased.”
KRISTIN GUNDERSON HUNT IS A
CONTRIBUTING WRITER FOR JPM®. IF
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