As 2020 comes to a close, we’re seeing more commercial real estate sites come up for sale. From office to flex space to retail pad sites, some of these are prime locations in the Philadelphia suburbs. Offering real estate developers and investors a unique opportunity. Whether you’re looking to make minor improvements or you’re tackling a complete demolition and rebuild, there are a few things you should consider when redeveloping commercial properties.
Know the Trends
Retail stores and restaurants are always looking to offer new concepts and stand out from the competition. Now, more than ever, the entire customer experience outside the building is a focal point – from curb appeal, to the parking lot, to the way products and services are delivered.
While the future of retail is still uncertain, most restaurants beyond the Quick Services Restaurants (QSR’s) and fast food providers are now offering in car dining, drive-through, and drive-ups. Will that trend stick around? What other changes may need to be made as a result of COVID, e-commerce, and the ever evolving retail experience? Will drive-through become the norm for retailers outside the customary bank and fast-food? The better you are in the know with trends and understand the tenant and end-users, the more successful the deal.
A sketch plan from a land planning professional can also ensure the site will accommodate the outdoor spaces and amenities that many tenants will require to attract customers. Consider simple lighting and landscape improvements to create an inviting outdoor experience where people want to gather to eat, drink, and shop. As we’ve seen this year, having the flexibility to quickly shift to outdoor spaces has saved many businesses.
Office, Flex Space, and Life Sciences
Office space and the workplace will look different in the future. Companies will require less space and some are considering a switch to single-story and single-tenant, suburban offices. However, many of these assets were built in the 80’s and they’re dated. Minor interior and exterior upgrades can make them more attractive and new outdoor amenity spaces will appeal to both tenants and employees.
While demand for traditional office space is low, the opposite seems true for life sciences lab/office space. As a matter of fact, we’re actively pursuing several leads, where pre-COVID, they would have otherwise been traditional Class A office space.
Uncover Potential Hidden Costs
Beyond the standard due diligence items most developers evaluate when redeveloping commercial properties, you should also look into these potentially costly items that may not be obvious:
Is the building and the site conforming to the zoning district? If you’re proposing a small addition or renovation, you’ll want to understand the potential zoning issues you could encounter. Adding a new vestibule or patio, can be a simple aesthetically pleasing improvement that has a big impact. You want to be sure you don’t have to deal with a bunch of land use hurdles to get it constructed. A local land planning professional will have an understanding of ordinances and municipal regulations. They can help you identify potential design opportunities and constraints.
Are there limitations to site access? What is the nature of road circulation in front of the property? Traffic patterns are not typical at the moment. It’s difficult to gauge what it could be like in a year or two. Spending some extra time in the due diligence period to engage a transportation engineer could help avoid the headache of a future rush hour back-up right in front of the property.
And finally, is the site ADA compliant for your proposed use? Studies show most commercial properties are not in compliance with current ADA standards. If you’re not careful, you could be inheriting a significant upgrade or even a lawsuit. To protect yourself, get an ADA evaluation. Ideally, you want to ensure design and construction compliance.
Have you seen the property after a significant rain event? Make sure you do. This is a simple and cost efficient way to better understand stormwater runoff, flooding impacts, and risks on site.
Planning is essential to understand what you can and cannot do with your land. Understanding your tenant, end-user, and current trends combined with a thorough due diligence assessment, can result in a more successful commercial real estate investment. In a time of so much uncertainty, it’s best to do your homework to guide your decisions.
Our experts can help. Contact us today to get started.
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