Investing in any form of commercial property – be it a warehouse, factory or shopping complex – is an excellent idea. The returns are great. However, just like in any other business, you need to adapt some strategies to ensure quick return on investment. Commercial real estate optimization is one way of achieving this. This is the process by which successful businesses increase the ROI and minimize their occupancy costs. While optimization is multi-faceted and may vary depending on the needs of a company, it basically involves looking at the portfolio of the business as a whole to identify ways of lowing costs and managing the specific operations of each business. Although you can do all this by yourself, hiring the services of commercial property managers such as the commercial property expert - http://macarthur.ljhcommercial.com.au could make the process many times more successful.
A professional commercial property manager has the right resources, knowledge and industry specific skills to ensure that returns on your investment are optimized. Here are some of the ways in which these experts undertake commercial property portfolio optimization.
In the first step of optimization, a commercial real estate expert will look at your entire portfolio of businesses and come up with a set of metrics. These metrics will enable them to analyze each property individually and compare it with the other companies in different locations. To obtain the metrics, they will collect information regarding operating cost analyses, Common Area Maintenance (CAM) reconciliation, budgets and lease abstract data. Business metrics such as headcount and sales facilitate calculation of utilization rates.
Optimization of operations
Having created metrics, a commercial property expert will evaluate efficiency of each space on its own and compare it with the others in your portfolio. If a space is vacant and you have no intention of using it, they will advise you to sublease it. They will also use the metrics to analyze all your retail spaces to determine which ones have the best returns and which ones are weak. With their vast knowledge and experience, they will provide recommendations on how to boost performance of weak branches.
Another strategy that a proficient commercial property expert – http://macarthur.ljhcommercial.com.au for example will use is analyzing operating costs. This particular step is extremely detail-oriented. It involves finding out how utilities are exploited by employees. If employees have a tendency of leaving lights on, it will certainly have an impact at the end-point. Therefore, a real estate expert will try to unmask such abnormal expenditures and provide the relevant recommendations of eliminating them.
Comparison to market
Even if a business space seems to be doing well compared to others in the portfolio, it could still be suboptimal. Your commercial property portfolio needs to be compared to others in the market. If your performance is above average, you have room to save money. But if it is below the norm, you need to invest more. Doing this, however, requires access to detailed market data and this is where commercial property experts come in.
If you’re looking to optimize your commercial property portfolio, visit the commercial property expert – http://macarthur.ljhcommercial.com.au.