We began managing this property four years ago. Over 75% of the tenants had lease terms that expired in less than 24 months. The property was cash flow positive, but the roof and the outdated electrical system, began to cause problems for the tenants. Many tenants were planning to leave the center due to these issues.
While soliciting bids from contractors to fix the problem we found that, for a little more money, we could also “reface” the building, bringing the antiquated façade up to today’s standards. Our projections showed a better cash flow after renovations due to our ability to charge a higher rent.
We significantly increased the cash flow for the property, retained our current tenants, created an additional $300,000 in value, and mitigated the owner’s risk related to the roof and electrical systems.