Thursday, June 30, 2016
The Challenge and Investment in Renovating Commercial Properties
Paul Kerley of Salem, Oregon, has built up more than 30 years of practical experience in the real estate brokerage and property management fields. Before he established Commercial Property Resources, Inc., in the early 1980s, he concluded the successful sale of about half of the 500 apartment units he owned and managed. Paul Kerley’s activities in the field include the acquisition and major renovation of multifamily residential complexes such as the Salem, Oregon, area Albany Meadows property, which he renamed in 2007.
The run-down Albany Meadows site initially presented a number of challenges, including mold and extensive wear and damage to paint, carpeting, and fixtures. The Commercial Property Resources team repaired and upgraded the property to a high contemporary standard.
Any investor interested in purchasing a commercial property in poor condition with the aim of renovating it will want to do his or her due diligence by studying financial data on the local market, including the sub-market to which the property in question belongs. In addition, it will be necessary to compute the cost of purchase and renovation against a realistic final selling price.
You will also need to evaluate the neighborhood: An investment in a less-advantaged area could prove a wise one if the quality of local community infrastructure is beginning to rise. However, a purchase in a run-down area without such prospects may prove to be a losing battle.