Did you recently purchase a large commercial space? Are you trying to determine if you should try to rent it as is or pay a contractor to divide it up? Or, maybe you just had a larger business move out of the space and you’re wondering if now is the time to create multiple rentals out of the building. Let’s talk about it.
Of course, the benefit of a large rental unit is that you may be able to entice a bigger company to move in. Some businesses desire a big, open space to set up shop in. And it’s nice to only have to work with one tenant. Plus, you don’t have to find a contractor or develop a plan to divide the property up.
However, on the flip side of things, there are some benefits to dividing a commercial property up. This is especially true when times are tough for businesses. Smaller spaces are easier to rent out right now, as not a lot of places are looking to expand into larger facilities.
Also, once you have a tenant in a commercial space, it can help attract more tenants, especially ones that complement each other. And, if one tenant moves out, it doesn’t leave you high and dry. You may actually make more money on the commercial investment. If you rent out every space, you may be able to charge more than you could if you rented the commercial property to a single tenant.
Another nice thing about having multiple commercial tenants is that they typically attract more business. Each business has its own patrons. These patrons may decide to try out neighboring companies, expanding each of your tenants’ reach. That’s why it’s especially helpful when the businesses complement one another and it’s best to avoid ones that will compete.
When it comes down to it, you have to decide what’s in your budget and what type of tenants you hope to attract. You also need to consider the economy and what businesses may be interested in the available location. If you do decide to divide up your commercial property, do some research to find out how much square footage certain types of businesses typically need, so you know how to best separate the rental units.
If you’d like additional help readying your commercial property for rent and managing it, please reach out to us at PMI. You can visit our website at: https://www.flintpropertymanagementinc.com/.
