Lease Every Area of Property to Maximize Revenue Stream
No matter how successful you are at minimizing costs and maximizing profits from your leases with tenants at your shopping center or office building, there’s no reason to overlook new ways to generate more rent and income. After all, the real estate market is never 100 percent certain, and you never know when tenants could decide to leave your center or you could have other issues that cut into your profits, like lawsuits.
So how can you make more money if every traditionally leasable area of your building is full? There may be hidden leasable areas in your building or center right now that you could easily convert into new sources of rent and income. These can be otherwise “dead,” seldom used, or underused areas that you could convert into something more useful and desirable. But they also can be often-used parts of common areas that you could rent or license for a limited time for a special event.
If you don’t know where to start, here are the strategies you need to generate more rent and income at an office building or shopping center, and how you can find the hidden leasable areas at your building or center.
Consider Income-Generating Strategies
Here’s a checklist of strategies for generating more rent and income from hidden leasable areas—divided into two main categories—“Office Buildings” and “Shopping Centers/Malls.” Within those categories are lists of hidden leasable areas: in a building’s/center’s interior areas, parking lot, and on its rooftop. Review the checklist and determine which of these additional income-generating strategies would work at your building or center.
Property Type: Office Buildings
Interior areas. Interior areas are ripe with opportunities for new income. For example, you can:
[ ] Convert dead, unused areas into storage areas, and charge a fee for storage.
[ ] Place vending machines in dead, unused areas, and get a percentage of the money the vendor collects from the machines.
[ ] Convert a seldom used area into an amenity room or employee gym, and charge an annual fee for access.
[ ] Rent unneeded space in a large lobby to a newsstand-type vendor.
[ ] Let a TV or movie production company film in the building for a fee.
[ ] Install Internet-accessible computers and charge users for access/connection time.
[ ] Install ATMs and collect a fee for every transaction.
[ ] Install small, flat-screen TV monitors in the elevators (and larger monitors throughout the building), and charge tenants for ads promoting their businesses located within the building.
Parking areas. Don’t forget that parking lot and garage areas can be useful too:
[ ] Charge a fee for a car wash or car detailing operator to use the parking lot or garage a few days a week or longer.
[ ] Charge a nearby facility to use your building’s parking lot or garage after hours.
[ ] Open a self-paid area of the parking lot or garage to the public on weekends.
[ ] Create a pad, or an outparcel, in the parking lot, and rent it to a new tenant. A roof can also provide space that can bring in money:
[ ] Rent the building’s roof space to telecommunications providers for their antenna (and interior conduits/risers for their wiring).
Property Type: Shopping Centers/Malls
Interior areas. Interior areas of retail properties have traditionally had more obvious ways to maximize profits in unused areas. But some owners might overlook opportunities. So review these options:
[ ] Rent or license vacant spaces to temporary tenants/licensees—such as accountants during tax season, or a Halloween costume store in October.
[ ] Rent out space in a less traveled area as a community room for fundraisers, service club affairs, or town meetings.
[ ] Enlist corporations’ help in sponsoring an area of the mall—such as the food court—for a fee.
[ ] Install soft-drink vending machines in the common areas, and get a percentage of the money the vendor collects on every drink sold from the machines.
[ ] Let a TV or movie production company film at the center for a fee.
[ ] Rent large, open areas in the center or mall to artists, musicians, and performers.
[ ] Install Internet-accessible computers, and charge users for access/connection time.
[ ] Install ATMs, and collect a fee for every transaction.
[ ] Hire a directory company to sell ad panel space on the center’s directories, and get a percentage of the money from the ad sales.
[ ] Install large, flat-screen TV monitors throughout a food court, and charge tenants for ads that promote their businesses located within the center.
Parking lot/garage. Depending on the size of your shopping center or mall, you could have expansive parking. Don’t waste the opportunity to use it in your favor.
[ ] License an area in the center’s parking lot for amusement rides, boat sales, book sales, Christmas tree sales, a farmer’s market, fireworks stands, a Halloween pumpkin patch, new- or used-car sales, or other special events or sales.
[ ] Create a pad, or an outparcel, in the center’s parking lot, and rent it to a new tenant. (Before you go ahead with plans for a pad or outparcel, carefully examine your leases with all of your tenants to find out if doing so will breach any of those leases. And consult with your attorney to make sure that you’re not forgetting some aspect that could create problems later, after you’ve taken on the expense and commitment that this type of construction can create.)
Roof. Don’t overlook revenue that the roof of your property can bring in.
[ ] Rent the center’s roof space to telecom providers for their antenna (and interior conduits/risers for their wiring).
Practical Pointer: Coming up with additional sources of revenue at commercial properties isn’t without its risks. It’s vital that your building’s or center’s property and liability insurance policies cover the types of activities included in our checklist of additional income strategies. Otherwise, your good intentions to simply generate additional income could result in a very costly lawsuit if someone is injured or if property is damaged during any of these activities.