As a result of the recession and its fiscal impact, distressed assets have become an undeniable part of today’s Commercial Real Estate Market. So where do we go from here? What are the long term, strategic benefits to improving and/or repositioning an asset?
With competition growing, a building’s overall aesthetic makes a significant impact on its marketability and long term viability. However, there are four key design strategies that can maximize the long term viability of any asset while also maintaining budget objectives. These strategies include incorporating exterior and interior upgrades, timeless design, building system upgrades and sustainable design.
Exterior and Interior Upgrades
The imaging of a building exterior is very important, as it will captivate or repel the attention of a potential visitor. We suggest a design focus on the focal points of the building, as the most impactful areas for upgrades. For instance, downtown San Diego’s Bank of America Tower located at 450 B Street was recently renovated. This 20-story office tower was originally designed and built in the 1980’s. The exterior renovation focused on two main areas, the building entry and courtyard. The entry was enhanced with the addition of a glass jewel box frontage that creates a sense of openness, increases the height of the space, and maximizes the lobby. In the courtyard, landscape planters and seating areas were integrated to create a pedestrian friendly communal space that reflects the accessibility of the building.
Our approach to a repositioning project is to create a design that is modern, timeless, functional, and delivers a good return on investment. Trend explicit design can quickly date the building. This is true also when approaching the building interior space. Effective interior spaces draw the outside in. This connectedness is exemplified in the Bank of America Tower lobby’s interior. The lobby draws in the sense of openness created in the exterior through the use of a neutral color palette, enhanced by accent natural materials of stone and wood. Integrating natural materials maintains longevity and if incorporated into the space appropriately, can be effectively modern and become timeless.
With a variety of current investment options, transactions are moving so quickly that we can overlook the investment value that can be obtained. In this current, highly competitive market the asset down the street with the same lease rate but greater aesthetic appeal, will likely win out.
Building System Upgrades
As a long-term option, building system upgrades can positively affect an assets upfront value. Focusing on upgrading mechanical, HVAC, plumbing, and electrical systems can create more efficiency, lower water and electrical bills and result in a smaller carbon footprint. Taking this approach can help an older property compete with newer buildings, while also staying relevant in the current market. Upfront investment can result in various long term savings opportunities for both owners and tenants.
Incorporating Sustainable Design
As more companies are integrating green practices and initiatives, consider exterior and interior design upgrades that include green/sustainable elements. Using regional materials (i.e. wood, natural stone, tiles, etc.) and finishes that have a high percentage of recycled content (i.e. carpets, laminate, wall paper, etc.) are more durable and long lasting. This is especially useful in high traffic, common areas where finishes may have to be replaced more frequently.
Sustainable options also exist for building systems. Elements such as energy efficient cooling/heating systems, lighting fixtures, water efficient plumbing, irrigation, and automated daylight system controls can be introduced and can further decrease every day operational cost.
As the market continues to see historically high vacancy rates this is the perfect opportunity to reposition an asset for success. The lifespan of the typical office building is changing along with the demands of the market. Integrating a timeless design which includes sustainable design elements, will improve the marketability of the property. Carefully investing in a building’s aesthetics, infrastructure, and systems will ultimately provide a positive return on investment.
Bio: Tiffany English is Director, Interior Architecture & Design for Ware Malcomb, a leading design firm, providing interior architecture and design, planning, architecture, graphic design and site development services for commercial, corporate and public clients worldwide. Established in 1972, the firm has eleven offices throughout the United States and in Toronto (Canada) and Panama.