Commercial Appraisals

[ck1architect]

The real question should be... Would the increased occupancy/retention rate and/or rents justify the construction/demolition costs? One thing to consider.. if you converted from 250 sf offices to 500 sq ft offices... you reduce the number of tenants. Would your market support double the rent for the larger space?

The construction cost is minimal, I only plan to create a small opening to connect the spaces. Whether the market can support double the rent is the unknown variable. I want to make sure its not like a residential unit, where as reducing the number of bedrooms also reduces the comparable value.

 

[George Hatch]

Combining units is common practice in the office and retail markets. Cutting in a couple doorways between units and re-sealing them later is no big commitment. Parts are parts.

All real estate is local, but *in general* the units will be priced based on their size, not the number of doors. Meaning, a 500sf unit can sometimes be rented for double the rent of the 250sf unit. It depends on the local demand at the different sizes.

One thing about the really small office units is you might run into more turnover.

 

[Fernando]

If the 250 sf unit can be rented and few such vacancies, then I would keep the small units.
I have a 3 unit commercial property and about 8 years ago, a big company tenant wanted bigger space so I let it renovated two units into one commercial unit. At that time and still now, many vacancies and it was best to allow the tenant to make it into one unit. On record, my property is 3 units but now is 2 units. I like to have more units on my property but it's a decision I hope I won't regret in the future.

 

[sputnam]

i'm residential, but wouldn't flex space increase the tenants looking at it. but then again don't add more items to a good menu. just like rehabing, i look at what's happening at the higher fixed up price range, and what are buyers getting, or expecting.

It might... but the value isn't determined by how many tenants look at the space. It's determined (mostly) by how successful the property is at generating income.