4 Disciplines for successful CMO & Flexspace investing [commercial property, development, investor]

I answer the crucial question of determining the optimal pricing for commercial spaces. I examine the significance of differentiation in setting prices and the importance of continuous testing to find the sweet spot in the market, and share insights on observing competition, exploring unique selling points, and adapting pricing strategies to suit the specific needs of the target market. 

KEY TAKEAWAYS

• Importance of Differentiation: Emphasise the need to differentiate your offer from the competition to justify charging a higher price.
• Continuous Testing: Advocate for ongoing testing of different price points and product mixes to find the optimal market price.
• Open-minded Pricing: Encourage flexibility in pricing strategies and avoiding rigid adherence to market norms.
• Utilise Scarcity and FOMO: Suggest leveraging scarcity and fear of missing out to drive decision-making and urgency among potential clients.
• Brand Building: Highlight the significance of building a strong brand identity to command higher prices and attract discerning clients.

BEST MOMENTS

"Testing is key. Try different price points and product mixes to find the optimal market point." 

"Differentiate your offer to charge a different price. Personality, design, and quality matter." 

"Don't follow the market blindly. Be brave, test, and push for the optimal price." 

"Scarcity, time-sensitive offers, and FOMO can drive decisions. Use these tools wisely."

"React strategically, gather information, and test again. It's a fun part of the business." 

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/
Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

As a follow on from the episode from the 8th of Feb about hidden transaction costs, I talk through the costs and actions that need to be factored from the date of the transaction until the commercial property is refurbished and let out. 

It is all the little things that add up and some new investors are not aware of when they calculate the project viability.

I cover 3 distinct parts:

1. Considerations when carrying out a transaction, as a buyer.
2. Costs to account for between the purchase and build-out, essentially for professionals, which may have to come out of your pocket.
3. Ongoing costs once you have the keys, even while the property is empty and nobody is using it.

This episode is for those who want to know about any hidden costs once they are holding an unoccupied commercial property, whilst waiting for planning, building works or for a client to move in. 

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/
Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

What are the differences between traditional asset management and the unique approach taken by CMO property development. I'll discuss the importance of adding long-term value through active redevelopment and ongoing refurbishment of neglected buildings, urging you to consider the long-term implications of certain buy and hold investment strategies and highlight the importance of actively driving value creation. 

KEY TAKEAWAYS

• Value Addition Over Asset Management: Add value through redevelopment and repositioning rather than just managing existing assets.
• Active vs. Passive Investment: This stresses the choice between actively managing the property post-redevelopment or passing it on to an agent for management.
• Resilience and Confidence: Develop resilience and confidence in their investment strategies despite industry norms.
• Control Over Market: It's vital to be in control of the value of the property rather than relying on market growth.
• CMO Strategy for Growth: CMO strategy allows investors with smaller pools of money to grow their asset base and leverage for future investments.

BEST MOMENTS

"Asset management is the normal approach to investment properties. But some of the stuff we're buying is not graded as an investment property, investment stock." 

"I'm sick of reading and hearing about asset management, or worse still, the suggestion of speculatively investing in assets that maybe in an up and coming area." 

"The real business is finding older buildings that don't suit modern requirements, reconfiguring them, repositioning them for modern demand. That's the adding value bit." 

"CMO for me is a fantastic strategy and it allows investors with smaller pools of money to grow up their asset base and to use leverage to then buy the next one." 

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/
Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

I am joined by Michael Crookson to delve into the world of tech solutions for commercial properties. With over 20 years of experience, Michael shares insights on managed data, voice, and cabling solutions offered by Datel Solutions. The conversation covers the evolution of telephone systems from traditional lines to cloud-based solutions, emphasising the importance of infrastructure planning and integration for seamless operations.

We give practical advice on optimising connectivity, future-proofing buildings with Cat6 cabling, and the benefits of embracing AI and automation in property management. 

KEY TAKEAWAYS

• Proper planning and consideration of connectivity options are crucial before investing in a property to avoid costly infrastructure challenges later on.
• Emphasise the importance of future-proofing buildings by installing Cat6 cabling and structured infrastructure to support evolving technology needs.
• Highlight the significance of early engagement with telecom experts to streamline operations and enhance tenant experiences.
• Encourage developers to prioritise maintenance and refurbishment planning to avoid costly and disruptive issues in the future.

BEST MOMENTS

"Technology has evolved. Back in those times, a telephone system was there to simply make and take calls. But now we're speaking to businesses about integration with third-party solutions."

"We still provide what are called SIP channels for on-premise solutions, but a SIP channel is essentially using the internet to deliver voice."

"Businesses don't pay for calls any longer. That's a thing of the past. So essentially, what we provide is a cloud license with a minutes bundle attached to it and a handset."

"I think a real buzzword at the moment is automation. It's integrating systems so that businesses can simplify operations and really enhance a customer, a client experience."

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/
Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

The real cost of looking after properties long term is so overlooked. It's a crucial yet often overlooked aspect of long-term property investment and it frustrates me to see investors who fail to properly consider the inevitable need for property refurbishment over time. Some base their numbers on the initial purchase and some refurbishment but no follow up costs for the medium to long term.

KEY TAKEAWAYS

• Consider long-term maintenance and refurbishment costs: Investors should factor in the inevitable need for property refurbishment over time, including major expenses like boiler replacements and roof repairs.
• Mitigate costs through dilapidations clauses: Landlords can protect themselves by including strong dilapidations clauses in leases, ensuring tenants are responsible for maintaining the property's condition.
• Take deposits and set expectations: Collecting deposits from tenants and setting clear expectations for property upkeep can help cover wear and tear costs when tenants vacate the space.
• Establish a sink fund for maintenance: Setting aside a portion of rental income for a sink fund can help cover big-ticket maintenance items like full property refurbishments in the future.
• Stay proactive with maintenance: Regularly maintaining the property, addressing issues like water damage promptly, and keeping communal areas in good condition can help prolong the need for major refurbishments and preserve rental income.

BEST MOMENTS

"It just frustrates me a little bit that people don't really think properly about long-term investment."

"There's some really cast iron dilapidation clauses."

"At some point you're going to need a chunk of change for a full refurb."

JOIN THE NETWORK

If you want to learn more about investing in Commercial Property why not consider joining the CPI Network? A community of active investors who collaborate, share experiences and empower each other in their Commercial Property endeavours.

Useful Links:

CPI Website - https://commercialpropertyinvestor.co.uk/
Our Sponsors -  https://commercialpropertyinvestor.co.uk/podcast-sponsors/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

This time I'm joined by my CPI co-conspirator Megan Brown. We talk through the lessons we have learned from operating shared coworking spaces over the last 5 years and share some of the customer facing stories that have stuck with us. We discuss the membership models we offer and how we have responded to customer demand.

Our offer has evolved over time as we have learnt what works and what hasn’t worked for us. If you are starting out on a coworking journey then this episode should give you lots to think about. If you are already operating in this space then this episode will either have you laughing and nodding along to our trials and tribulations or at least laughing at our progress  😀

KEY TAKEAWAYS

• Co-working and shared space can be a valuable addition to a building, offering a mix of memberships and types of customers.
• Different membership options, such as part-time and full-time, cater to varying needs and preferences of individuals and businesses.
• Creating a sense of community within the shared space can enhance the overall experience for members and encourage retention.
• Offering additional amenities like meeting rooms, phone booths, and events can increase the value proposition for members.
• Leveraging day passes and partnerships with local businesses can attract new customers and enhance the overall offering of the shared space.

BEST MOMENTS

"It's like having a bar that has a membership. You're not just expecting people to walk in off the street."

"I mean, work is such a big part of everyone's life. They always say that you see your work colleagues just as much as you see your family."

"It's amazing that you can come in at half eight in the morning or something and there's an email saying, oh, by the way, there's another two people joining you today."

"I think that's the thing, customers generally know what they want at the end of the day."

VALUABLE RESOURCES

If you want to learn more about investing in Commercial Property why not consider joining the CPI-Network of commercial property investors, who are working, learning and supporting each other on the Get in The Swim Membership

https://commercialpropertyinvestor.co.uk/get-in-the-swim/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

I discuss the importance of optimising space in commercial properties, specifically focusing on the layout and placement of toilets. I look at the value of windows in office spaces and suggest considering the relocation of toilets to free up window space, as rooms with windows can be rented out at higher rates.

I also highlight the practical considerations involved in moving toilets, such as plumbing and drainage, and share my experiences and strategies for successfully reconfiguring spaces to maximise their potential.

KEY TAKEAWAYS

• Optimising space in commercial properties is crucial for maximising value and attracting higher rental rates.
• Toilets with windows can be a wasted opportunity for valuable office space, so consider relocating toilets to free up window space.
• Plumbing and drainage considerations are important when moving toilets, as gravity and proper connections are necessary for effective waste management.
• Partitioning and designing toilets with multiple doors can help alleviate awkwardness and improve privacy for users.
• Utilising windows for offices can provide natural light and ventilation, reducing the need for additional ventilation systems and enhancing the overall quality of the space.

BEST MOMENTS

"But the more you go through the numbers and the longer you hold on to this building, the more important it becomes that you optimise your space as best as possible." 

"So, one of the things I try and do is stack the toilets, not on top of each other but per floor, so that you've got this service void that you can put your new plumbing in." 

"I would really, really encourage you to try and do that because it's so important." 

"When we reorganised everything, put the toilet core into a different area, opened up all those windows, changed the whole feel of that space, we're getting five times that amount."

VALUABLE RESOURCES

If you want to learn more about investing in Commercial Property why not consider joining the CPI-Network of commercial property investors, who are working, learning and supporting each other on the Get in The Swim Membership

https://commercialpropertyinvestor.co.uk/get-in-the-swim/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

This time, I talk about the importance of market research and due diligence when entering a new market location. I'll share six vital numbers that investors should know, including local area square foot rates, competitor occupancy levels, operating costs, build-out costs, market capital costs, and cap rates. I also provide methods for gathering this information, such as online searches, talking to agents, reviewing competition, checking out developments, and networking. 

KEY TAKEAWAYS

• It is important to gather information about the local area, including the square foot rate or desk rate, competitor occupancy levels, operating cost per square foot, build-out costs, market capital costs, and cap rates or yields investors are seeking.
• Methods to gather this information include online research, talking to agents, reviewing competition, checking out developments in the area, looking at the requirement list, placing ads, and networking.
• It is crucial to physically visit the area and observe what is happening on the ground and where investments are going.
• Negative or positive findings about an area should not immediately rule it out, as problems may lead to better opportunities.
• Ultimately, it is up to the individual to gather and analyse the information to make informed decisions about investing in a new market location.

BEST MOMENTS

"What are the steps to ascertaining market demand in a new market location that you haven't owned anything in before?" 

"Nothing beats getting in the car or on your bike if you're that way inclined, and taking a look about on the streets. Only then do you see what sidenof the tracks are better and where the investments are going." 

"If an area is up and coming, there are developments going on, but maybe not too much, then you know those are some big ticks ✅ in the boxes." 

VALUABLE RESOURCES

If you want to learn more about investing in Commercial Property why not consider joining the CPI-Network of commercial property investors, who are working, learning and supporting each other on the Get in The Swim Membership

https://commercialpropertyinvestor.co.uk/get-in-the-swim/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

I talk about the various costs involved in buying a commercial building, highlighting the importance of considering VAT, land and buildings tax, lawyer fees, title searches, finance fees, and accountant projections.

I also look at the need for surveys, feasibility studies, and insurance, and tell you why you need to be aware of ongoing costs such as utilities, fibre installation, and business rates. 

KEY TAKEAWAYS

• VAT (Value Added Tax) is a significant cost to consider when buying a commercial building, as it can add an additional 20% to the purchase price.
• Land and buildings tax, or stamp duty, is another cost to factor in when buying a commercial property. It is a progressive tax that increases with the price of the building.
• Lawyer fees, both for the buyer and the bank, are necessary expenses when purchasing a commercial building. Additionally, if the building costs over a certain amount, separate legal firms may be required.
• Accountant projections may be needed when seeking bank financing for a commercial property. These projections provide a professional assessment of the financial viability of the project.
• Ongoing costs to consider after purchasing a commercial building include utilities, insurance, business rates, and water charges. These costs can vary depending on the size and usage of the property.

BEST MOMENTS

"One of the key ones that a lot of people actually forget about, and if they're working with the same advisors they do with residential, their advisors may not necessarily bring this up until the last minute, when they remember, it's actually the big one: VAT." 

"Land and buildings tax could be less than RESI, might be slightly more depending on what the size is, but VAT does need to be included in that." 

VALUABLE RESOURCES

If you want to learn more about investing in Commercial Property why not consider joining the CPI-Network of commercial property investors, who are working, learning and supporting each other on the Get in The Swim Membership

https://commercialpropertyinvestor.co.uk/get-in-the-swim/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/

I explore the importance of trusting your gut as a savvy investor, emphasising the need to pay attention to signals and cues from potential clients, particularly in terms of communication and decision-making. 

I highlight the significance of clear vision and business acumen in successful deals, urging you to trust your instincts when something doesn't feel right. I also discuss the importance of mutual respect in professional relationships and the value of saying no when necessary. 

KEY TAKEAWAYS

• Trust your gut. Your gut can pick up on signals and red flags that may indicate potential issues with clients or deals.
• Pay attention to the consistency and clarity of communication from potential clients. Smooth and transparent communication is a positive sign, while sporadic and vague communication may be a cause for caution.
• Clients who constantly change their minds or can't settle on what they want can be a red flag. A clear vision is important for a successful deal, so if a potential client is indecisive, it may be time to reassess.
• Look for clarity in what potential clients do and their level of business acumen. While startups can be a good addition, it's important to assess if they have a clear plan and understanding of their business.

BEST MOMENTS

"Get through the pain of saying no as quickly as you can." 

"Your gut knows that that clear vision is really important for a successful deal." 

"And every no is a lesson, right? Every successful deal is a testament to your growing instincts." 

"Trust your instinct. In the business world, clarity is really important."

VALUABLE RESOURCES

If you want to learn more about investing in Commercial Property why not consider joining the CPI-Network of commercial property investors, who are working, learning and supporting each other on the Get in The Swim Membership

https://commercialpropertyinvestor.co.uk/get-in-the-swim/

Property Investing, Commercial Real Estate, Strategies, CMO, Lease, Licence Agreement, Cashflow, Vacancy rates, Agents, Best Commercial property podcast, how to buy, Valuations, ROI, residential, assets, Flexspace, office space, How to get started: https://www.commercialpropertyinvestor.co.uk/