Shopping Center Property Maintenance – The Focus On ROI
Property maintenance is one of the key factors impacting Roi so many investors assume that larger properties actually result in lower maintenance costs.
However larger properties also come with larger risks since they require larger tenants who need more space. Lose one of these larger tenants and ROI is negatively impacted.
Investing and the Property Maintenance Calculation
Smaller commercial properties and shopping centers usually have smaller maintenance budgets but on a percentage basis the cost of property maintenance is higher.
Smaller commercial properties and shopping centers still need portering, sweeping, painting, regular maintenance and repair, as well as the occasional emergency (just like the larger properties).
The frequency of maintenance and the need for experts is the same whether the property is big or small. The cost for property maintenance must be built into the operating income for the property.
There are certain investor’s who will pass investing in a small property because of maintenance costs, but they may be missing out on an opportunity because they’re placing too much attention on only one aspect of the investment.
Shopping Center Property Maintenance – Most Companies Don’t Need Large Spaces
90% of most businesses in the United States have less than 20 employees. So the vast majority of the potential tenant market is looking for smaller space to operate..
Larger commercial properties look good in the spreadsheet’s bottom line, but smaller actually provides better opportunities and less risk.
Because there is a much larger pool of tennents, smaller stores and office spaces are easier to rent. Small companies are also generally easier to communicate with since the business owners are more accessable.
Larger tenants have larger corporate entities to deal with. Also, if the larger organization decides to close a branch or division then this can leave a costly vacancy in your property.
This vacancy can put a hole in the bottom line through a lengthy vacancy. Finding a larger tenant for larger space is also a challenge because the tenant pool is smaller.
The property still needs to be maintained even if a store or office is vacant. Revenue stops but the property maintenance costs continue.
Shopping Center Property Maintenance – Large or Small?
This is why in our opinion when it comes to shopping centers or office space, smaller is better.
Do you have a shopping center, office space or commercial property that needs expert property maintenance?
C & L Services is a third generation family owned property maintenance company. We have been providing pavement maintenance services to real estate developers, commercial property owners and communities in New Jersey for over forty years.
We can give your property the attention needs and keep your ROI stable.
If you’re in North Jersey, Contact us at 908-730-7884. If you’re in Central New Jersey call us at 732-886-1940 to arrange for commercial property maintenance.