The Commercial Inspector Blog Posts

Haunted Places Series: Mizpah Hotel

HAUNTED PLACES SERIES: THE MIZPAH HOTEL
 October 4, 2023 |  CRE News |  just for fun, hotel, Haunted Places Series

Location: Tonopah, Nevada
Architectural Style: Renaissance Revival
Built: 1907

One of the best things about investigating the paranormal is the opportunity to take a deeper look into the past. For our first entry of 2023, we take a brief look into the old West, the mining boom of the late 19th century, and a little town with a big history. Grab your trusty steed and saddle up! This week, we visit Tonopah, Nevada’s Mizpah Hotel.

The Town
While admiring the Mojave Desert, it’s hard to imagine why anyone would want to put down their roots in a place so inhospitable. Yet in the mid-1800s, a movement was pulling people to just these sorts of places. The promises of riches, a new life, and freedom seemed out there for the taking. And so people were flooding en masse out West for the treasures hidden in the hills of the coast.

Dotted across California and Nevada, small towns cropped up to support the efforts of hard-working miners. One such settlement that cropped up in this way was the town of Tonopah.

A Shoshone word, meaning something along the lines of “greasewood water,” Tonopah began with the discovery of a silver-rich ore vein after prospector Jim Butler angrily grabbed a rock, intending to throw it at his sleeping mule. When Mr. Butler realized how oddly heavy the rock was, he saw that he was holding a clutch of shiny-silvery stone, and his mule was sleeping on the beginning of one of the richest silver finds in the history of Nevada.

From this discovery, Tonopah sprouted up from the desert and quickly became a point of interest. Tonopah attracted a fair amount of attention from notable luminaries of the age such as lawman Wyatt Earp, business magnate Howard Hughes, and heavyweight champ Jack Dempsey. In time, a hotel was built by some of the most successful real estate developers in the state. Designed by Reno’s George Holesworth, the five-story destination was called the Mizpah Hotel, and it was the tallest building in all of Nevada.

The Hotel
With its own bar and one of the first elevators in Nevada, the Mizpah Hotel was considered an opulent respite for travelers and, in time, a destination for gamblers. By the 1940s, the hotel featured a roulette wheel, slot machines, and a craps table. The Mizpah Hotel would have a connection with one vice or another throughout its entire lifespan.

With its granite walls and Victorian-inspired decor, the Mizpah Hotel passed through many hands, but has kept its historic look while being adapted with modern amenities. Though the location has a wealth of history, perhaps its most well-known designation today is as “the most haunted hotel in the United States.”

On the hotel grounds (and in its surroundings) many reports of spirits and specters have built up over the years, some whose identities have been attached to famous figures and others who have remained a mystery. As the legend goes, Senator Key Pittman died on the hotel’s premises just before his 1940 election and was kept on ice in one of the hotel bathroom’s bathtubs until his body could be transported. Some claim that the Senator never checked out of the Mizpah, attributing him to any number of ghostly sightings.

Other than Pittman, there are stories of phantom children occupying the upper floors, laughing and playing pranks on hotel patrons. A silent soldier also roams the grounds, nameless and mysterious. Still, folklore tells of a few spirits with a bit more of a backstory, though their histories have not been confirmed.

The basement is said to house two bank robbers, betrayed by their third partner during their heist which resulted in their deaths. They are said to be responsible for the unsettling feelings common in the lower floors, as well as the odd sounds frequently reported in the area. Perhaps most tragically, there is also the Red Woman, a spirit referred to as “Rose” who is rumored to be a former escort, murdered by a spurned customer. Rose, in particular, has been lovingly adopted by the Mizpah Hotel’s current owners, with her own “Lady in Red” room available for booking.

Tonopah is quite the interesting anomaly today, with enough urban legends and folklore to make it a satisfying stop on any road trip. The town also features a historic mining park, where you can enjoy a self-guided tour, and a clown motel (in case the ghosts up the street weren’t enough of a fright).

To book a night in the historic Mizpah Hotel, visit their website and schedule your visit today! For any non-clown related commercial or residential inspections, stick with National Property Inspections!

Photo by Mitch Barrie, licensed under CC BY-SA 2.0 DEED

Maintaining Building Entryways: The Importance of a Good First Impression

MAINTAINING BUILDING ENTRYWAYS: THE IMPORTANCE OF A GOOD FIRST IMPRESSION
 August 2, 2023 |  Property Management, Property Maintenance |  safety, interior maintance, cleaning

As property managers and business owners, whether you’re running an office space, a hotel, or an apartment complex, setting a good first impression is important when it comes to bringing in new customers and quality tenants. We’ve already talked about things like landscaping and parking lot maintenance, which are essentials for putting a property’s best foot forward. Additionally, public art continues to be a powerful way to make a splash within the community and increase curb appeal.

Still, when it comes to making a statement on a business’ culture there is perhaps nothing as impactful as a clean, professional entryway. Building owners want visitors to be impressed and instilled with confidence when they first walk in the door - not to be inclined to reconsider their options. The good news is that keeping an entryway up to snuff doesn’t have to break the bank. Follow these quick points to help secure high-quality tenants and attract more customers!

Entrance Mats are an Unsung Powerhouse
When picturing how you want your entryway to look, it’s important to consider all that this area needs to accomplish. Not only does your entry need to look good, it also needs to handle a large amount of foot traffic while dealing with spillover from the elements outdoors, ideally with minimal need for upkeep. With these demands in mind, no entryway is complete without a commercial-grade entry mat.

Now, most commercial property managers and owners know well enough to invest in mats at all entrances already, but many don’t realize the amount of heavy lifting this one item does to keep the entire building clean. Entryway mats are responsible for capturing the majority of dirt and outdoor debris from filtering into common areas and offices. Plus, inclement weather becomes far less of an issue when mats are large enough and in good condition.

From the Centers for Disease Control and Prevention's most recent data sets in 2021, slip and fall cases are by far the leading cause for non-lethal emergency room visits in the U.S. Though it may sound simple, entrance mats are one of the best ways to keep tenants and visitors safe from injury upon arrival. Property managers should plan to replace mats when worn or damaged so they can continue to be the workhorse they’re meant to be for the entire building.

Start strong by investing in a high-quality, commercial-grade entrance mat with rubber backings for stability, then consider adding an additional outdoor mat to keep as much dirt and clutter contained to one area as possible.

Natural Light Should be a Priority
Entrance mats alone will work wonders for safety and cleanliness if you aren’t already using them, but with that aside, the next most influential factor that enhances an entryway’s look and feel is its lighting.

Humans crave natural lighting, and in an era when workers are getting less of it than ever, natural lighting has become a top attraction (see the number one “office perk” according to the Harvard Business Review). Although windows and glass doors take some effort to keep clean, entrances are likely the best opportunity to feed natural light into your commercial property. Achieve the best effect by hiring professional glass cleaners at least twice a year, then consider incorporating glass cleaning into your staff’s routine on a weekly basis.

As a quick additional tip for areas that are darker than average, add mirrors and other reflective surfaces to your lobbies or common areas to enhance any natural light that you do have access to. While these areas add another noticeable area to clean, they’re a great way to modernize and decorate a space.

Common Areas
Stepping into the main lobby or common area, this is often an opportunity for managers and building owners to establish their own theme or style through wall art, plants, and furniture. With these areas, it’s important to keep things clean and up-to-date while not adding too much to your staff’s existing duties.

For consistent maintenance, remember to vacuum carpeted areas and mop tiled floors regularly, making repairs as needed. When it comes to updating these areas, remember that changes don’t always have to be overly elaborate to retain a fresh feel. Just like in residential properties, a fresh coat of paint alone has the power to bring a room stuck in the 70s back to the present day, and indoor plants (even fake ones) can provide a positive effect on an individual’s psychology (see more about this from experts at Bob Vila).

Property managers that recognize their entrance’s influence can potentially increase tenant retention and provide a helpful boost to foot traffic. The power of a good first impression cannot be understated. Employ these steps, and find the hidden potential in your properties!

Did you order a maintenance inspection this year? For larger properties, the only way to stay ahead of unexpected downtime or expensive breakdowns is through a commercial inspection with NPI. Book your next inspection today!

Adaptive Reuse: Giving Old Buildings New Life

ADAPTIVE REUSE: GIVING OLD BUILDINGS NEW LIFE
 July 26, 2023 |  Property Investment, Commercial Real Estate News |  real estate trends, business-tips, save money, building renovation, office space, restaurant, multi-family property, apartment

Adaptive reuse is on the rise in commercial real estate as somewhat radical shifts continue to reverberate throughout various CRE subsectors. With the mercurial nature of office and retail space utilization, finding creative ways to repurpose properties without starting from scratch is certainly in the air.

This is where “adaptive reuse” comes into play. Do you own a warehouse that’s become an underused capital sink? Restore and renovate the property so that you can reopen it as trendy luxury apartments! Defunct businesses like switchboard operator buildings sitting empty? Rather than tearing it down, reopen it as a unique coffee shop or restaurant. Adaptive reuse is all about creativity and innovation while preserving the interesting historic buildings that can bring a neighborhood or a city its unique character.

There are many ways for CRE investors to utilize an adaptive reuse mindset in today’s volatile market, and the benefits of this strategy just might have a considerable impact on their ROI.

Common Applications for Adaptive Reuse Today
The first form of adaptive reuse that we’re seeing pop up over and over recently is the multi-family conversion. Office buildings have continued to struggle filling up post-pandemic, and features like high ceilings, which are somewhat common in offices, are highly sought after in multi-family properties. The thought is that while it’s hard to say when some companies will decide to move back into offices in full force, multi-family properties are a more consistent need that is far less likely to hit a similar lull in the near future.

Other types of properties that are looking to apartment conversions as a new lease on life include hotels, old warehouses, and even movie theaters. Per CRE analysts at Rent Cafe, major cities like Los Angeles, New York, and Chicago are leading the way in new adaptive reuse apartments, and though the initial 2019/2020 surge wasn’t ultimately sustained, these conversions remain prevalent.

Another utilization of adaptive reuse is seen in restaurant and coffee shop conversions. These span the gamut of commercial real estate with everything from old post offices to banks to former railway corridors being transformed into trendy eateries. These atypical locations can become a hotspot quickly, drawing attention from a young clientele in an area that was previously defunct. But the uniqueness factor that these businesses gain isn’t the only reason why business owners look at adaptive reuse for their ventures.

Advantages of an Adaptive Reuse Strategy
As mentioned, one great benefit of an adaptive reuse strategy is the ability to create a desirable, unique experience for customers. We discussed previously how millennials and Gen Zers are placing increased value on unique experiences, and their ability to share their experiences over social media offers a new avenue of “free” advertising that is incredibly desirable for business owners. Making a splash online can be tough for property owners who don’t have a comfort or knowledge in marketing, so inherent advantages like these shouldn’t be overlooked.

Beyond these locations being an aesthetic draw, the reuse of existing buildings requires fewer materials and produces less waste in comparison to full teardowns and reconstruction (when the circumstances are right). With sustainability in mind, adaptive reuse might be the best way to reduce pollution and update neglected properties.

Finally, retrofitting properties for new purposes through adaptive reuse strategies can help communities revitalize themselves while holding onto their history. Older buildings require demolition if they fall into disuse and disrepair, but with a little investment, historical locations can have a new life and serve a new purpose for a new generation. There’s something about bringing the old and neglected back to life that helps communities come together and invites more local participation. A strong sense of community is vital for small business success.

Investors who are looking to diversify their portfolio may benefit from looking at local historical or vacant properties in need of a little love. Not only could it be a shockingly strong performer, these properties can become catalysts that renew an entire community.

Inspectors from NPI have the expertise and versatility to perform thorough inspections for commercial properties across all sectors - multi-family, office, industrial, retail, hospitality, mixed use, and special purpose facilities. Contact your local NPI inspector, or speak with our National Accounts department to see how we can fulfill your needs!

The End of the Student Loan Pause and Its Expected Impact on CRE

THE END OF THE STUDENT LOAN PAUSE AND ITS EXPECTED IMPACT ON CRE
 July 19, 2023 |  Commercial Real Estate News, Property Investment |  real estate trends, business tips, save money, retail space, hotel, apartment

On October 1st, the student loan pause that stretched back to early 2020 will come to its climactic end, leaving many economic analysts as well as borrowers anxious about the future. An extra few hundred dollars of costs affecting the budgets of roughly 44 million Americans is sure to send ripples throughout many industries. And for commercial property investors, staying up to date on the latest speculation tends to have its value. Looking forward, here’s how the end to The Pause might impact a few key real estate sectors.

Forecasting the Effect on Multi-Family Properties
As we’ve discussed, property owners are getting creative with ways to add to multi-family property inventory as other sectors have been negatively impacted by inflation. While it’s true that most still consider multi-family properties a smart add to any investor’s portfolio, recent conversion strategies and new builds have prioritized higher-end units, which doesn’t balance well with student loan payment continuation.

Those impacted by student loans are likely to look for ways to save, which may mean downgrading their living situations by moving from Class-A locations to Class-B, or from Class-B to Class-C. Millennials and younger renters who have opted to rent alone may also choose to share costs by finding roommates or moving in with family. Depending on the demographics of your multi-family locations, a shuffle in tenants seems very possible with higher-end locations more likely to see an increase in vacancies.

Changes in Plans and Excess Spending
Borrowers are sure to either cut on spending for non-essentials or accrue additional debt, which means that retailers could be disproportionately affected. From clothing stores, to the hospitality sector (and travel industry), to car dealerships, excess spending is due to see a considerable decline as people learn to adjust to their budget. Marketers will look to emphasize the essential nature of their products and services as consumers are sure to take time reprioritizing their outgoing funds.

Larger purchases are also likely to take a hit as those looking to retire or pursue an advanced degree will instead wait until their finances are in order. While the overall impact on the economy as a whole should be negligible due to funds only being redistributed from these areas to loan repayments, low to medium income earners should feel the largest impact. This leads to the natural question of home ownership, and how the reinstatement of payments might limit those looking to make a transition from renter to owner.

Projected Impact on Residential Market
While this may be something of a surprise, the residential market is actually not very likely to be heavily impacted by student loan repayments. Inflation and high mortgage rates have already made homeownership a tall task for most younger prospective buyers, which means that most analysts agree, those that were avoiding purchasing a home during the student loan freeze likely weren’t in a position to buy anyway.

Inflation, mortgage rates, and overall availability all need to shift for residential sales to see a noticeable increase, it seems. As a spot of good news for renters, though, signs seem to be pointing towards a drop in rent prices in a few key cities, and some (like reporters at CNN) are seeing home prices lowering steadily. Given time to adapt, spending is likely to normalize again. For how long this adaptation will take, follow along as we watch the latest commercial real estate trends and news!

No real estate purchase is safe without a comprehensive inspection revealing insights on the condition of the property. To work with America’s premier name in commercial property inspections, contact NPI today!

Why Commercial Property Inspectors Perform the Best Luxury Home Inspections

WHY COMMERCIAL PROPERTY INSPECTORS PERFROM THE BEST LUXURY HOME INSPECTIONS
 July 12, 2023 |  Property Maintenance, Commercial Inspection |  commercial HVAC, commercial plumbing, commercial electrical, commercial-landscaping, multi-location inspection, special purpose facility, safety

Moving into a new home is an exciting moment, but handling the logistics of each step can be a handful. When moving into a luxury home, it’s important to order a comprehensive home inspection for every purchase, but finding a professional equipped to do the job isn’t always so simple. If you’re struggling to find the right professional to perform a luxury home inspection, opting for someone with a background in commercial property inspections should be a top requirement.

Luxury home inspections may have more in common with a commercial inspection than a standard home inspection due to a number of factors, including the property’s size, unique systems, and amenities, which are often modeled after commercial locations. To dive more into why commercial inspectors should be your go-to contact, let’s discuss a bit more about the process of a luxury home inspection.

Why is it Important to Get a Luxury Home Inspection?
Every homebuyer, whether they are purchasing a new or historic home, should always order a home inspection before closing. Homes experience a natural wear and tear over time that owners tend to ignore or overlook until these problems lead to major expenses or even safety hazards. On top of these unnecessary additional expenses, homeowners may have to deal with living without essential home systems for an extended period of time if a significant breakdown occurs (plumbing issues leading to a lack of water, HVAC systems failing, and electrical power outages just to name a few).

In particular, it’s important to note that new homes are not immune to defects. Oftentimes, inspectors find more issues in new homes that are easily resolved than any other type of property due to builders missing a final step or overlooking a minor procedure. Catching these issues before moving in allows homeowners to avoid the growing pains that can come with breaking in a new home.

Due to a luxury home’s size and complexity, an annual home maintenance inspection will ensure the appropriate functionality of the property’s many systems throughout its intended lifespan. Home inspections are the key to a comfortable and worry-free experience for families, so that their time isn’t taken up by sudden unexpected maintenance concerns.

How are Luxury Home Inspections Similar to Commercial Property Inspections?
A luxury home inspection is a bit niche in comparison to a standard home inspection due to the smaller volume of these types of jobs in any area. Home inspectors naturally tend to specialize in certain types of homes or in particular unique services in order to satisfy the needs of homeowners in their area. Because of these facts, luxury home buyers are likely to discover that their choices are limited when the time comes to select an inspector. Plus, if an experienced luxury home inspector in an area retires, home buyers may have to opt for a residential inspector who is inexperienced with their type of home.

To expand on these options and to feel more confident in choosing a luxury home inspector, home buyers should look to commercial property inspectors to perform their buyer’s inspection due to the many commonalities luxury homes share with commercial properties. For starters, luxury home inspections tend to be a much bigger job than the average home home inspection. Luxury homes have larger square footage, additional floors, and expansive landscape features that can all feel intimidating for inspectors only experienced in the residential sector.

Commercial inspectors, however, will have a background working on much larger facilities such as hotels, retail properties, multi-family properties, banks, or office buildings. Commercial buildings also require more robust electrical systems, HVAC units, and commercial-grade kitchen appliances. Commercial property inspectors will have a background with systems that pack a bit more of a punch than the standard residential inspector - similar systems to what are required to keep a luxury home functioning.

Additionally, who better to inspect unique features like a home theater, spa, or wine cellar than a commercial inspector who has done the same job for businesses? It’s been said that every commercial inspection job is unique and requires some flexibility due to its distinctive architectural styles, high-end materials, and at times obscure demands. For these reasons, inspectors with this type of background will have more flexibility and comfort to tackle a luxury home inspection.

How to Identify a Quality Luxury Home Inspector
Quality luxury home inspectors will ideally be multi-inspector businesses, have an extensive background in commercial property inspections, and/or have access to other inspector partnerships to check each other’s work and cut down on the time sink to complete the job. Even high quality residential inspectors might not have an appropriate background to handle the scope and scale of a luxury home inspection.

Luxury home buyers can also cause unneeded distraction for inspectors that don’t have previous experience working with industry leaders, politicians, business executives, or even celebrities or athletes. Professionalism, experience, and support are all qualities to look for in a quality luxury home inspector. While some markets may require buyers to identify professionals that operate somewhat outside of their comfort zone, these guidelines should provide some better direction for a better purchasing experience!

Did you know that NPI’s national network of professional inspectors emphasizes commercial work along with residential? Let us know how we can help you coordinate your next property inspection with ease. NPI inspectors also offer many add-on services that can benefit luxury homes such as drone inspections, sewer scopes, infrared, radon, and mold inspections. National Property Inspections is your property inspection one-stop shop!

NIMBY vs YIMBY: Why Affordable Housing is a Must for Commercial Viability

NIMBY OR YIMBY: WHY AFFORDABLE HOUSING IS A MUST FOR COMMERCIAL VIABILITY
 July 5, 2023 |  Property Investment, Commercial Real Estate News |  real estate trends, retail space, restaurant, hotel, multi family property, apartment

Comfort and familiarity are things that people cling onto for comfort. While most are willing to venture out to a new restaurant or clothing store from time to time to “mix it up,” wider lifestyle changes are generally met with major push-back. In the realm of real estate, this fact is perhaps the most clear in instances of new construction near residential communities.

Often, residents of existing communities fight to preserve the familiar feel of their neighborhoods through protesting affordable housing developments, new high-rises, or any unwanted businesses. These conflicts are natural issues for developers and property investment groups, and while these residents may not realize it immediately, derailing growth often comes back to harm their communities beyond what they expected. Change can be tough, but many cities formerly resistant to developments (notably wealthy enclaves) are starting to shift their views to their benefit.

What is NIMBY?
NIMBY, also sometimes known as nimbyism, is a term used in reference to groups in a community that fight in an organized manner against new developments that threaten their way of life in some manner. Standing for “Not In My Back Yard,” NIMBY started mostly to defend against environmental and public contamination in the early 80s as fear of nuclear power and toxic waste grew to new heights with incidents like the meltdown at Three Mile Island. Since those early days, this term has gained a more negative reputation, however, typically associated with wealthy homeowners who are more concerned with protecting their property value.

Today, due to high costs for homes and higher rents across the board, communities that have formerly been reserved entirely for the extremely rich are encountering unexpected issues as the bulk of their workers are struggling to afford housing. In areas like Myrtle Beach, the Hamptons, or parts of Los Angeles like Bel Air or Beverly Hills, wealthy residents are realizing that their communities have such a high barrier for habitation, that they are struggling to house essential workers like landscapers, teachers, firefighters, and healthcare workers.

For commercial property investors, retail locations, hotels, and restaurants all are much higher risk investments in these areas simply because finding eligible employees becomes too difficult a task. If residents want some of these businesses in their communities, they have to rethink their stances on sufficient housing options for the employees that would work there.

What is NIMBY?
The good news for commercial investors in these areas is that these wealthier communities may be getting savvy to the necessity of affordable housing, despite how they might impact their property value. Per local news reports in Myrtle Beach and in Nantucket, affordable housing projects are seeing overall support which should contribute to countering the housing crisis by creating a more accessible market in districts that were formerly out of reach.

The counter movement to NIMBY has been appropriately referred to as “YIMBY” or “Yes In My Backyard.” With this recent YIMBY movement coinciding with finally a drop in rental prices for multi-family properties and other residential rentals, signs seem to be pointing towards plenty of opportunity to reduce vacancies. Once again, housing and commercial viability seem to be deeply intertwined. To keep up on the latest CRE market trends, stick right here.

For retail, restaurant, multi-family property inspections and everything in between, NPI is America’s premier name in commercial property inspections. Contact our National Accounts Department to find an experienced inspector near you!

The E-Commerce Effect: How Online Shopping is Impacting Warehouses and Retail

THE E-COMMERCE EFFECT: HOW ONLINE SHOPPING IS IMPACTING WAREHOUSES AND RETAIL
 June 28, 2023 |  Commercial Real Estate News, Property Investment |  real estate trends, retail space, warehouse, commercial real estate tenants

Technology has a habit of drastically altering our lives. Do you recall the way you spent your idle time five years ago? A decade ago? Twenty years? Between the rise of streaming, the prevalence of social media, electric vehicles, and the era of artificial intelligence, some technologies are so commonplace that it is hard to imagine life without them, while other innovations make projecting industry trends a tall order.

Making smart moves in any industry means staying on top of these innovative technologies and tracking trends. For the commercial real estate industry, one form of doing business that’s undoubtedly been sending ripple effects throughout the industry is E-commerce.

What is E-Commerce, and How Has it Changed?
E-commerce is an abbreviated term meaning “electronic commerce,” and refers to the rising industry of online shopping, where consumers can purchase from their favorite brands, select a delivery location of their choice, and even offer direct feedback on their experience all without leaving their desktop. Today, businesses are practically required to use an online store in order to see success, and some businesses have been able to operate entirely as an online entity - without any physical presence whatsoever.

Due to the incredible ease of use that online shopping allows, the advanced ability of businesses to target their customer-base through social media (finding their consumers where they spend their time), and the rapid growth of businesses like Amazon, e-commerce is quickly becoming the preferred option for many Americans. In fact, according to market analysts at Forbes, 20.8% of all retail purchases in 2023 will be made online, and this figure is projected to grow to nearly 25% in 2026.

Although this growth in e-commerce may have been escalated by events in 2020, many saw this rise coming back in 2019 (such as Fru Kerick over at Medium). An infrastructure for e-commerce is being rapidly built, and commercial real estate is adapting to meet this new demand in many ways. Starting with retail, this is one area where e-commerce’s impact may be most apparent.

How Has E-Commerce Impacted the Retail Sector?
Retail commercial real estate still has a larger market share than online real estate purchasing, but e-commerce’s slice of the pie has definitely been felt as malls are taking on a very different look. Major anchor tenants and “big box” brands have been struggling and pulling back from their in-person presence, while malls and former retail spaces have needed to get creative to fill these empty spaces.

This shift doesn’t mean that brick and mortar retail will be eventually phased out altogether, however! For example, “experiential retail” is a term used to describe a new strategy that’s growing in popularity among businesses. Many businesses are designing their stores to be more eye-catching, reducing their number of locations, but investing more to make their in-person experience more social media-worthy.

Some stores and properties have found great value with celebrities-backed brands to grab attention as well, like with Kim Kardashian’s Skims in Rockefeller Center, and Rihanna’s Fenty Beauty making appearances in multiple retailers. Stores are learning to be more strategic about how they draw people into their locations while making their online presence more robust to keep up with consumer expectations.

What About Warehousing?
As square footage for retail spaces have steadily declined in recent years, demands for warehouse space have experienced a radically different trend. Online shoppers have a preference for next-day shipping, and as a result, warehouse managers and owners are learning to adapt to high customer expectations.

Larger and more efficient distribution centers are opening throughout the nation, prioritizing locations near urban areas and residential centers. Additionally, warehouse managers are learning to handle “reverse logistics” or an increased rate of returns from customers. While retail locations might have been hit due to recent market changes, all signs point towards massive growth in the warehousing sector - making this an area investors should consider looking towards to diversify their overall profile.

Keep up with more CRE industry trends by following The Commercial Inspector! NPI is the premier name in residential and commercial property inspections, contact your local NPI inspector for all of your inspection needs.

How to Identify a Good Commercial Property Investment

HOW TO IDENTIFY A GOOD COMMERICAL PROPERTY INVESTMENT
 June 21, 2023 |  Property Investment |  business tips, save money, commercial real estate tenants

When running a business, owners are constantly looking for ways to diversify their income so that sudden changes in market demand don’t result in a death knell for their operation. For those with an entrepreneurial spirit, looking for ways to diversify their personal income often leads them into property investment. But how do new investors know how to make the right investment and avoid being saddled with a property that becomes more of a hassle than an asset?

In property investment investors often compare residential and commercial purchases. Commercial properties are a great option for investors due to their higher returns compared to residential properties, their longer lease terms, and the diverse approaches available like with Triple Net Leases. (If you’re still torn on residential vs. commercial property investment, real estate investment experts over at FortuneBuilders have a great breakdown on the pros and cons of each model!)

For new investors looking to get into the space of commercial property investment, identifying a strong deal can feel like a big task. To get started strong, here are some key considerations.

Learn About the Industry
Before even thinking about making that first purchase, prospective investors have plenty of research to do about commercial real estate in general, and then plenty more about their own unique market. Although it’s easy to find broad-stroke statements about the current state of commercial properties (for example, industrial properties are the highest performing investments, and retail is struggling), markets everywhere vary. For that first investment, it’s best to try and compare properties in as similar a situation as possible.

Commercial property value is primarily determined by factors like usable square footage, age and condition, location, and profitability of its tenants. Although finding a perfect match may be difficult, investors should try to find another property that matches as many of these traits as possible to get a better idea on an accurate valuation. Even similar properties in a nearby town can vary considerably in value due to unforeseen circumstances.

Just as when entering any industry, finding a successful mentor is key to anyone looking to overcome a learning curve. Mentors are people who have experience with successful investments and managing a portfolio, ideally in a similar area and with the sorts of properties.

Familiarize Yourself with the Stats
After becoming more confident with the way commercial property investments realistically work, investors will need to get acquainted with three key statistics: Net Operating Income, Capitalization Rate, and Cash-on-Cash Return. Each of these figures are used to identify a smart investment, and they can build off of one another.

A property’s Net Operating Income (NOI) is the value of a property’s revenue (rent, parking, laundry, etc.) after deducting expenses related to operating the facility (maintenance, insurance, utilities, taxes, etc.). If an investor takes values from a full year’s estimated totals and they see a positive NOI, then they may have found a property worth pursuing.

After calculating a property’s NOI, investors can use this figure to determine the Capitalization Rate as well (also known as the Cap Rate), which helps determine a rate of return. Although this rate shouldn’t be the sole factor to determine whether an investment is worthwhile, many investors use this as a quick and easy point of reference for their properties. Cap Rates are calculated by dividing the NOI with an appraised value, and can also be used to determine when a return should be expected.

Borrowing is a very common factor that needs to be tracked in a commercial property investment. This is why the Cash-on-Cash Return metric is commonly relied upon to determine whether an investment was or was not successful, and it’s considered one of the most important commercial real estate calculations. Put simply, this percentage is calculated by dividing a property’s NOI, by the total dollar amount invested. The higher this percentage, the better!

Understand Your Own Skills and Preferences
While these figures and general principles should set investors in the right direction for their next investment, it is far from the full set of considerations. Every sector of commercial property investment and management has their own unique quirks and concerns, meaning the most successful investors will be able to play to their own strengths, rather than rely on a generic gameplan.

Some might be interested in investing and adding value to a property to make their profits, while others are more confident in relying on appreciation. Many investors find a home specializing in multi-family properties, but considering how well the industrial sector has been performing, investors with the know-how and comfort could see considerable return there as well. Model your investments based on your unique strengths to match a promising property, and you’re sure to accomplish your goals!

Nothing cripples a strong commercial investment like unexpected maintenance issues. Start with a commercial property inspection to keep your investments secure!

Investment Opportunities in Student Housing

INVESTMENT OPPORTUNITIES IN STUDENT HOUSING
 June 14, 2023 |  Property Investment, Property Management, Commercial Real Estate News |  real estate trends, business tips, multi-family property, apartment, special purpose facility

One of the keys to having success in commercial property investments is to stay on top of market trends and forecasts. While unpredictability in recent years has meant that diverse portfolios are the most resilient, investors are slowly discovering stability and confidence in some surprising places. Of late, many property investors are turning to student housing for their next option, and it’s little wonder why.

Why Student Housing?
In comparison to other commercial properties, student housing has recovered at a much quicker pace from the effects of lockdowns and the pandemic. While there has been a consistent struggle between CEOs and office workers as preferences for hybrid and full-time remote work have grown in prevalence, students’ choices aren’t changing when it comes to their education. According to the National Center for Education Statistics, even though college enrollment dropped by 15 percent from 2010 to 2021, enrollment is on track to increase by 9 percent throughout the next decade.

Though undergraduate students are more willing to incorporate remote learning into their collegiate experiences than in previous years (as reported by education analysts at EdSurge, among others), the lack of sustained impact that universities are seeing from the pandemic seems to prove a unique resiliency from education-related property ownership. Commercial and residential real estate are both very much influenced by interest rates and the ebb and flow of supply vs. demand - things out of the control of the average investor. As projections seem to suggest though, the need for student housing is only growing, and universities are struggling to keep up. Next to a lack of stability in retail and office properties, student housing may be rising in prominence for investor portfolios.

Special Considerations with Student Housing Investment
Some investors see student housing as a valuable asset with a more reliable cycle of tenants in comparison to traditional multi-family properties. For those interested in stepping into this space, they should be aware that strategies that might work for apartment buildings or condominiums, don’t necessarily work when transitioning into student housing.

Although there should be a more consistent audience of tenants each school year, property owners should be aware of massive turnover in occupancy each summer. In addition, while students are generally much more lenient when it comes to the quality of their housing options (the alternative for many is living in the dorms, after all), opting for cheaper materials and lower amenities may also invite reckless treatment from tenants, and more frequent repairs.

The prospect of working with a younger than usual tenant base and managing a different maturity level can be enough to dissuade some from investing in student housing altogether, but there are built-in assurances worth considering as well. For example, although undergraduates are usually too young to have a reliable credit record to reference, their parents should ensure that rents are reliably paid. Though there are unique traits when it comes to managing a student housing property, the level of interest in this field is undeniable.

Strategies for Success with Student Housing
If you’re looking to invest in student housing, there are a few things to keep in mind for the best ROI. First, recognize the benefits that come with regular tenant turnover. Some states prohibit adjustments to rental fees within a lease agreement. Regular vacancies and renewals mean that property owners have more opportunities to adapt to changing rental standards.

When it comes to competing for attention and keeping vacancies at a minimum, it’s important to prioritize things that are important to a younger client base. Access to laundry, especially appliances within each unit, is particularly appealing for students who are looking to save time on chores. When it comes to on-location amenities, consider fitness facilities as well as quiet common spaces for studying to fill the majority of your tenants’ needs.

Finally, although most properties will benefit from an experienced property manager, student housing may require someone on-hand to be a little more involved than usual. For property investments that may be one of your more reliable purchases, student housing could be a surprising winner.

Some commercial properties require more maintenance than others. To get a clear picture of your properties, there’s no better option than ordering an inspection. Contact your local NPI inspector for a quote today!

Restaurant Design Aspects That Draw In Customers

RESTAURANT DESIGN ASPECTS THAT DRAW IN CUSTOMERS
 June 7, 2023 |  Property Management, Property Investment |  restaurant, commercial real estate tenants, business tips

The restaurant industry is one of the most saturated, cutthroat, and intensely competitive industries out there. While there is plenty of misinformation about just how difficult it is to succeed in the food service business, it is widely recognized that the vast majority of restaurants close within their first five years of operation. Per the National Restaurant Association’s latest statistics, 7 out of 10 restaurants are individually owned and unassociated from any chain operations.

Considering these hurdles, restaurant owners are wise to pursue strategies that set their business apart from the competition as they work toward sustained success. While food and customer service should be every restaurateur’s main focus, their establishment’s physical design has a bigger effect on foot traffic than they might think. For any restaurant owners that are looking to attract new customers, consider these tips for an improved look.

Starting with the Standards (And Why They Work)
Depending on the style of restaurant you’re looking to open, certain repetitive features immediately come to mind. Glass front doors, a mixture of table seating and booths, and either warm lighting for fine dining settings, or neon accent lighting for sports bars are all common features. While many implement these options simply because they’ve become a comfortable standard in their slice of the culinary world, there is also a good amount of logic that supports these tried and true features.

Many restaurants understand the importance of a grand entrance, and often this includes a glass front door and plenty of window space in the entrance. An early look inside the building allows for passersby to get a taste of the attractive interior design, and (hopefully) the bustling, popular atmosphere within. General lighting and strategic accent lighting is used to further invest into whichever specific mood and clientele desired.

For example, warm lighting (yellows and golds) have the power to make spaces feel more intimate, which is needed in fine dining settings that tend to pull tables further apart for increased privacy. In contrast, (while this strategy may seem a bit counterintuitive) bright lighting is fantastic for fast food or fast casual-style dining, due to how it causes customers to be more on alert, ready to grab their food and leave. Restaurants that focus on takeout don’t want their customers to linger, and their interior design can support efficiency, without being off-putting.

Nearly all restaurants benefit from natural lighting, and warm colors (reds, yellows, and oranges) incorporated into interior designs are said to make customers hungrier, which is why so many restaurants use red in their logos. Getting these staples right are sure to aid in a restaurant’s success, but long-lasting businesses need to differentiate themselves from the pack.

Finding Where to Stand Out
Lately, there have been many trends making their way into the restaurant design scene that compliment past standards, without interfering with efficiency for the kitchen and serving staff. For the vast majority of restaurants, the kitchen and dining hall is kept in strictly separate rooms to avoid distraction. However, open kitchen concepts can make the cooking process part of a restaurant’s draw. For some, the added talking points and natural trust built through this transparency is more than enough to balance the loss from noise pollution and privacy.

When it comes to color, modern trends have leaned heavily towards high contrast, with neutral designs and bold colors positioned selectively to direct customers’ attention to interesting interior features, or displayed artwork. With the increasing prevalence of social media among millennials and Gen Z, it’s particularly important for restaurant owners to provide “share-worthy” situations. Whether a restaurant specializes in certain particularly photogenic dishes, or they’ve leaned into a unique theme, customers that share their excitement for a product or location to their friends and followers online provide invaluable organic advertising.

Murals, local art displays, and even live music performances all play into that desire for experiences that customers are more than willing to pay for today. Just like any other commercial property, using art to create a more striking, memorable image is a great way to create distinction for a business.

A great product and an appealing environment mean very little if a restaurant’s basic functions break down unexpectedly. To stay ahead of your business’ essential maintenance like HVAC systems, ventilation, and plumbing, start with an NPI commercial property inspection.