COMMERCIAL & REAL ESTATE: HIGH CURB APPEAL – The big — and little — things that make a difference in the value of your commercial property
As more and more commercial properties pepper northern Michigan’s landscape, staunch competition dictates a closer look at the overall value in each property. Tenants have a choice to make and a budget to meet, and it’s up to investors to meet their needs.
Adding value to a property often depends on the uses in mind, but there are a few ideas that are universal to all properties. For the new Pickwick Centre on Cherry Bend Road in Traverse City, the developers counted on two things: affordability and accessibility.
“The real value in Pickwick is that we are providing a work space that’s very economical,” said Ted Lockwood, real estate agent with ReMax Bayshore Properties Ltd. and part owner of Pickwick. “Instead of being right in town on the bay, we picked proximity. We are only about a mile out of town and it costs considerably less to lease.”
The Pickwick Centre is offering space at $105 per square foot, Lockwood said, and the response has been “fabulous.”
In addition to the comparably lower cost, the center offers easy in-easy out access for tenants.
“They can get on and off Cherry Bend Road easily instead of trying to get on and off a busy corridor. They don’t need to fight a lot of traffic but it’s still close to town,” he said.
Accessibility also played a part for the new office building at the corner of Division Street and Randolph in Traverse City. Doug Meteyer, president of Spectra Development Inc., owner, general contractor and real estate broker of the establishment, pointed to two aspects of convenience for tenants.
“There were two strong things in inquiries in our building,” Meteyer said. “Is it easy to identify and is there enough parking?”
The question on identity was tackled three-fold: curb appeal, low number of tenants and ample signage space. The all-brick exterior recalls the details of long-ago buildings and aims to suit Traverse City’s atmosphere.
“We wanted to design a building that fit into Traverse City as opposed to a radical departure in architecture. And the all-brick exterior has a high curb appeal,” Meteyer said.
The 11,250 square-foot two-floor building will house three to four tenants, leaving ample space on the brick foundation sign out front for tenants’ names.
“In a large building, businesses can become kind of invisible to the public,” he noted. “There’s rarely much sign exposure on the street because there’s not enough room for the names. Here, their name becomes synonymous with the building. Over 30,000 cars a day are reminded of your company.”
For the parking situation, they took a unique approach. Instead of lying down yet another parking lot, they decided to join forces with Sleder’s Family Tavern, their neighbor.
“We combined parking lots because our peak hours of operations are different than a restaurant,” Meteyer said. “You drive around and see segmented parking lots and wasted land use. We hope other business owners can agree to agree on sharing, too.”
The move helped land them the Grand Traverse County Planning Commission’s award for Design and Land Use Excellence in 2000.
Lockwood tackled the equation of parking in a different way at the Pickwick Centre.
Instead of placing the 88 parking spaces required for the 15,000 square-foot building, they opted for 66 spaces with additional landscaping that could be removed if parking becomes an issue.
“It means more green areas and more landscaping to add to the attractiveness,” he said.
Another way that Lockwood and his fellow developers worked to add value to the complex was to work closely with the township to design a building that was appealing to both tenants and existing neighbors.
“We are right on the edge of a residential area, but we put in an attractive building that matched well,” Lockwood said. “We wanted a good relationship with neighbors and the township and worked with them to see what they wanted.”
Added services also boost a property’s value. For Lockwood, that meant providing high-speed cable Internet access to all office spaces, as well as joint restroom facilities to add to each tenant’s square footage.
In the Spectra building, the extra perk is energy efficiency. The building is constructed of 2×6-inch framed walls with chopped fiberglass insulation in walls and ceilings.
“We went beyond any energy code for this building,” he explained. “You have a fixed mortgage payment, but operating costs can climb. It’s hard to contain operating costs after it’s built, so we went beyond the codes now because I know we’ll want it later.”
Mike Stimac, owner of Tradewinds Commercial Properties is also a believer in looking into the future needs of a business or property.
“Many people want a, let’s call it, ‘sexy’ property at first–brand new, a sweetheart of a property–but they need to grow their business first,” Stimac said. The result is often new businesses ending up with rents that are too high for their budget.
“Tenant turnover is a problem in a property’s value,” he said. “They come in starry-eyed and will pay anything to get a roof over their heads but six months later they can’t afford to pay the rates.”
In turn, the property ends up with a poor tenant and income record, he said. His solution? “We price properties lower than market value intentionally. I know they’re trying to make a living, and I like to see my tenants stay.”
Finally, Stimac points to the old adage of location, location, location.
“The key value in any property is location.” he said. “It pays to buy in the right place the first time.” BN