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As the economic recovery lags, businesses realize they need to do even more to cut expenses, reduce payrolls, and find new sources of revenue. But what is left to cut? Where can they find new streams of revenue?
Real estate is often a company’s most valuable asset, and real-estate related moves can yield the biggest return on investment. In the July/August issue of CIRE magazine, Martin N. Burton shares 10 strategies that commercial real estate professionals and their clients can employ to find additional savings and new avenues for cash flow. Here are five highlights:
1. Divide and Prosper – If the time has come to sell off an asset, owners can maximize the chances of sale and total return by selling off smaller parcels instead of a single large one. Not only do smaller parcels typically sell for higher per-square-foot values, but their lower overall prices attract more potential buyers.
2. Embrace This Audit – Some companies have begun to adopt green practices, such as switching to fluorescent bulbs, or making sure employees turn off lights and computers regularly at the end of each day. But a comprehensive energy audit can help leverage the benefits of these improved practices to achieve even greater savings.
3. Bond with PACE – Property Assessed Clean Energy bonds can make green retrofitting even easier, allowing cities to finance a property owner’s green improvements. The owner repays the loan through tax assessments on that property over 20 years. In many cases, the money saved in reduced energy expenses is enough to cover the loan and bring in cash flow.
4. Increase Parking Revenues – Parking operation changes hold enormous upside potential for properties located in high parking demand areas. This is because the primary investment required to raise parking income is in management and not physical construction. A change in operations can unlock the hidden value in pricing for weekend, weekday, in-season, out-of-season, reserved, and valet parking, increasing parking “turns” and, consequently, revenues. Even changing the mix of just a portion of stalls from monthly reserved parking to daily or hourly parking can have a substantial impact on cash flow. Contact a parking professional for a look at just how much money can be made.
5. Get Paid for Rays – Until recently, electricity generated from solar panels on one’s property could only be used to offset the electricity used on that site. Now, feed-in tariffs allow property owners to sell excess solar power directly to a utility. The electricity generated on rooftops feeds into the utility’s power lines, for which the utility pays a tariff to the property owner.
Read more about these and other strategies for creating revenue streams.