Commercial property renovation or refurbishment is a balance between current tenant placement, future occupancy needs, and income cash flow growth. Overlook or disregard any of these elements and your renovation can easily fail.
To help you on the planning process for a property renovation, seek the assistance of a design professional such as an architect. Have them undertake a pre-design proposal to define the scope of work and time frames.
It is likely that you will uncover various obstacles to your project early on. To qualify and investigate these obstacles seek additional help from engineers or quantity surveyors.
The basic information that can help you start the process off will be:
- Details of existing buildings and any building code violations that will need to be addressed in the new project.
- Details of regional demographics of the business community and general population.
- Details of any known planning applications for competition property changes or new properties near to you that could disrupt your property performance.
- Plans of the zoning rules and regulations in the local area that can impact on your property.
- Plans of the existing property to be refurbished. This is both site drawings and structural as built drawings.
- A line sketch and conceptual drawings of the new property changes.
- If necessary seek soil reports to identify soil stability and safety for the project.
- An inspection of the existing property by an engineer to identify any concerns and structural issues.
- Photographic record of the existing property and any key areas of structural or design concern.
- Have informal meetings with the local council planning officers to identify their concerns regards the proposed development or renovation.
- Be aware that the larger the renovation, the greater the possibility that the local planning office will require you to do a full building code upgrade at the same time of the renovation itself. This can be a significant cost burden that the property owner does not want.
- A list of ‘must have items or targets’ that the project cannot do without.
- A timeline of leases and tenant occupancy matters that need to be handled during the project.
- A timeline of stages of the project that should be met given the seasonal business and climatic changes.
- Target rentals and new lettable areas that will be created in the new renovation. Understand the minimum cash flow that you must produce from the project. Add to this the lease terms and conditions that will be required to give you the required cash flow.
- Get an independent valuer to provide assessment of property value before and after the project or upgrade of the property.
- Seek a solicitor to advise you regards the elements of leasing that will impact your new project and leased areas. Take particular care with retail leases as this will usually have key elements of legislation to be handled with any new leases.
- Speak to local real estate agents to get an overview of property enquiry, needs and trends from the local area.
If all this information satisfies your initial project targets, then you know that you can proceed to a formal development plan and proposal that you can put to the local planning office.
As you compile this information, make it clear to the architects or engineers that this is strictly a pre-design project and that he or she will not be responsible for the final project at this stage. That lifts the pressure on their calculations and allows them to make valued and unbiased judgment. It gives you more accurate information at the early stages of the renovation or refurbishment. It is better to stop or adjust the project at the early stages than leave it to costly adjustments later.