Paint and Recarpet or wait for new tenant

[Scouser]

I've a commercial office property in Hamilton that has come to the end of tenancy and I'm either re-leasing or selling (if I get the right price). It needs repainting and recarpeting but I'm receiving different advice from different real estate agents whether I should re-carpet and paint now or wait until I get a prospect and then sort it out with them.

The property looks rather tired inside and needs it but the logic of one agent is that whatever one does the prospect will want it done differently and one is wasting money. The other agent is basically saying making it look 'move in' quality will enable one to get a tenant faster. Cash is not the issue rather not wasting cash is.

What experience have others had in this?

[Beano]

I've a commercial office property in Hamilton that has come to the end of tenancy and I'm either re-leasing or selling (if I get the right price). It needs repainting and recarpeting but I'm receiving different advice from different real estate agents whether I should re-carpet and paint now or wait until I get a prospect and then sort it out with them.

The property looks rather tired inside and needs it but the logic of one agent is that whatever one does the prospect will want it done differently and one is wasting money. The other agent is basically saying making it look 'move in' quality will enable one to get a tenant faster. Cash is not the issue rather not wasting cash is.

What experience have others had in this?

Leave it the way it is but provide a custom 3d plan of what it will look like for the prospective tenants.
Est cost $5k

[Davo36]

Depends on area and desirability of your property I reckon.

If it's in a real hot situation, then leave it.

If it's likely to take a while to let, then do the carpet and repaint. Many tenants just want to move in straight away in my experience.

[Rosco]

Hi Scouser,

Generally unrenovated office property in Hamilton is sitting for a long time. Tenants have no vision, so they can't picture what it will look like. You are likely to get cheap rent, or bad tenant, or both.

Good office space in Hamilton is very sort after. NZHL moved out of our office building, and still had 1 year or more to run, but could easily find tenants to sublease. They actually had 3 applying to take over the lease. Older buildings renovated can go for $225 per m2 or more.

With last building(in Hamilton, and office), we found
- before renovation, pretty much no chance of getting tenants.
- with half renovated and tenanted. Still couldn't get tenants for other side, even with half done and other half would look the same
- need to be finished before tenants appeared!

Also big demand for smaller tenancies, like 100-150m2

Ross

[Scouser]

Leave it the way it is but provide a custom 3d plan of what it will look like for the prospective tenants.
Est cost $5k

Thanks Beano - as it's smallish (~ 200m2) I think the 3D plan is quite pricey in comparison to the actual costs.

[Scouser]

Hi Scouser,

Generally unrenovated office property in Hamilton is sitting for a long time. Tenants have no vision, so they can't picture what it will look like. You are likely to get cheap rent, or bad tenant, or both.

Good office space in Hamilton is very sort after. NZHL moved out of our office building, and still had 1 year or more to run, but could easily find tenants to sublease. They actually had 3 applying to take over the lease. Older buildings renovated can go for $225 per m2 or more.

With last building(in Hamilton, and office), we found
- before renovation, pretty much no chance of getting tenants.
- with half renovated and tenanted. Still couldn't get tenants for other side, even with half done and other half would look the same
- need to be finished before tenants appeared!

Also big demand for smaller tenancies, like 100-150m2

Ross

Thanks Ross

That's matching other feedback I've gotten since I made this post and also my original feeling that it would be money reasonably well spent to get top level $ on the lease. It isn't really bad but does look pretty tired. It's ~ 200m2 with decent parking and fringe CBD but very good motorway access.

[Scouser]

Depends on area and desirability of your property I reckon.

If it's in a real hot situation, then leave it.

If it's likely to take a while to let, then do the carpet and repaint. Many tenants just want to move in straight away in my experience.

Thanks Davo - not hot though the rumour mill has it that a number of owner operators want to buy in Hamilton and there's not enough for sale - believe it if I see more evidence.

[Beano]

Thanks Beano - as it's smallish (~ 200m2) I think the 3D plan is quite pricey in comparison to the actual costs.

If you find someone that can do it for a reasonable price let me know

[Scouser]

Ironically, the same day I gave the instructions to paint I have a prospective tenant who wants to re-configure the layout.....