Over the weekend, I was asked a question about commercial that got my attention.
A lady who had been burned before in property was left with an old slightly run down factory in the inner suburbs of Melbourne.
It was a warehouse with a loading door and some office space and very high ceilings.
The last tenant moved out over 18 months ago, and no-one has wanted to rent it since. She was asking for ideas.
Of course, I had a few, but as I’ve sat with it, more opportunities have bubbled up from my unconscious.
To me, it’s an opportunity to get creative but to this poor woman, it was just a headache because no-one wanted to move into her property and it cost her money.
So, depending on the zoning here are the things I would explore.
Given that’s it’s inner suburbs of Melbourne the most obvious thing to do in the current climate is to convert it into apartments.
I probably have back episodes of the Block to that for that idea – cause that’s what they do every time.
On the one hand, that strategy has solid potential because the factory was big enough to make probably half a dozen apartments each of which could be sold off separately.
The downside is that this woman didn’t have a lot of spare cash or equity and a conversion into six apartments is a costly exercise due to the level of fit out required.
Ok, so that’s one idea, let’s see what else we could do.
Turn it into shops… this could range from changing the street facing the wall to incorporate large windows and entrances and erecting some internal walls. Aside from the front having to look nice the internal fittings can be of a much lower standard than a residential conversion.
You can add a small kitchenette and toilet to each, some white walls and a small stock room at the back, even rent out the upstairs offices as separate.
The building could fit four long narrow shops and the office upstairs. That’s suddenly five rentable areas.
I don’t know the area at all but depending on the area and the parking requirements for the council a small shopping strip could be a great investment for shops that supply the essentials to the locals.
Conversion into a funky, slightly grungy restaurant, could also work.
Again you’d have to look at parking, zoning and need, but some nice clean plasterboard walls, some exposed brick, and an industrial kitchen could be enough to create a quite singular restaurant.
…And you wouldn’t need to change the front much at all because all you need is a regular door and maybe some nicer windows so people could look in.
What about a bar or a nightclub?
Depending on the situation with the neighbors turning into a great venue for live music, exclusive gigs, or a winebar with jazz on weeknights…
Or she could even knock it down and build something else…
There are lots of possibilities available as you can see, some are more work than others.
The issue is not that there are not tenants who want to rent it but rather that the building is not set up for the people who do. All she was trying to do is find someone who wanted to rent an old slightly run down looking factory site with some parking at the rear and some office space upstairs… It was ugly, boring and had industrial glass and hurricane fencing cages over the windows.
So the question is which of those ideas is the one… which one is going to work?
The great thing about this property was the unlimited opportunity. The best way to work out what will work best I believe is to take it to market and let the market tell you what it wants.
I suggested she go to the council and see what they would allow and then run a Facebook campaign or local paper advertising campaign to the local area asking for ideas…
Just ideas… not even expressions of interest…
Why is this important?
Because I’ve found that if you ask for expressions of interest, you’ll get all the people who want the whole building for $5. But if you ask for ideas you’re not selling anything – there’s no commerce involved which will attract more community spirit…
In every community, there are always some people who are more willing to step up and make some noise. Get these people on your side by asking for ideas of what the community needs and see how many people respond to these ideas…
I imagine that if you get a lot of community interest, you will also then get some entrepreneurial people who will make you an offer…
“If you turn it into a restaurant I will sign a 5+5 lease” for instance… Or, “…if you turn it into local shops I’ll totally lease one of them from you…”
This way you’re giving the community what they want and drawing out expressions of interest… you could even involve those people in the redesign of the building and get them to sign a lease before you’ve even done the work…
I know that this is all theoretical in many ways, but the point of this sharing of ideas is to get you to think creatively about the properties you have or are looking at,
To get, you think creatively about properties you see around the place which looks empty. It’s possible you could approach the owner and cut some sort of deal with them to run a campaign like this to see what the community wants or what the highest use of ugly old properties could be.