Commercial: Good Time to Freshen Up the Old
Rehabbing older commercial buildings is gaining popularity among buyers and owners who have lost tenants and hope retooling the property will give it a new lease on profitability.
”A lot of these buildings may be close to half their recent value, compared to where they were before the crash,” says A. Eugene Kohn, chairman of the architectural firm Kohn Pedersen Fox. ”If you can now buy an existing building for a great price, you can afford to upgrade it and get great rents, and you spend less than building new.”
Other reasons to rebuild include interest in sustainability and grandfathered zoning, Kohn says.
Source: The New York Times, Alison Gregor (04/07/2010)
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Green Buildings Boast 3 Percent Higher Payoff
Commercial buildings with green certification rent for an average of 3 percent more per square foot, according to a study by John M. Quigley, a professor of economics and real estate at the University of California, Berkeley. Other studies come to similar findings.
The study further concludes that because of higher occupancy rates in green buildings, the effective rent premium is about 6 percent per square foot. And it says green buildings also command a higher sales price, in part because they use 10 percent less energy.
The study doesn’t consider the additional costs of building green buildings nor whether location plays a role.
Source: The Wall Street Journal/Real Time Economics, Keith Johnson (12/16/2009)
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