FEATURE ARTICLE, SEPTEMBER 2008

THE ART OF REBRANDING:
How to make an older building marketable again.
Jo Heinz

Anyone in commercial real estate knows that staying competitive is the key to success. The question is: what is the best way to do that when it comes to older buildings? The cost of new construction oftentimes can be too cumbersome for any owner to handle, so demolishing and rebuilding the property is out of the question. How do owners manage to take that 10- to 25-year-old structure and make it attractive, marketable, desired and fresh in today’s marketplace?

Frequently, the first instinct for an owner is to look at low-cost solutions — finding an easy fix through new colors and furnishings. What these owners need, however, is a solution that can create a truly sustainable improvement. That is where interior architects come in to do more than flatly redesign the space. Interior architects rebrand the building and, in doing so, create a strategic plan for its repositioning.

What Is Rebranding?

To rebrand a building is to create a new image and breath renewed life into an older property by bringing in new activity and tenants. It is much more than a marketing pitch; it is a life-enabling recreation of space. As intellectual beings, people choose to visit and be a part of the spaces with which they connect. That is what rebranding is all about.

When an owner is looking into rebranding a property, there are several critical issues to consider. Speaking with an experienced interior architect and designer with a strong background in commercial real estate will bring forth a new insight and understanding of the framework that stands to be redirected.

If the building has a good location (an important component in any real estate market) and conveys a strong message in the marketplace, then a thorough look at the original architecture is warranted. During this due diligence period, an investigation is done on the state of the building’s infrastructure, its roof, its interior, its vertical movement systems and more. Beyond the site itself, it is important to have an understanding of the area’s leasing activity to be sure that the market is progressing at a desirable pace and that the territory will draw future activity.

This strategic, holistic plan that covers the complete rebranding of a property starts with the approach. Thinking like a current or prospective tenant may open a property owner’s eyes as to what truly makes a building a hot property for occupancy.

Who Rebrands?

Simply put, everyone rebrands — from individual owners to investment groups that want to add value to their properties. Typically, the structure to be rebranded is underutilized and has vacant and leasable space. There also are times when the space has been left completely vacant because an existing tenant has moved to a new location. No matter how the vacancies occur, the result is that there is space that needs to create revenue.

Additionally, there are owners that genuinely care about their tenants and their tenants’ needs and want to provide a quality experience for them. On any given workday, more than 50 percent of a person’s time awake is spent at work. Tenants are surrounded constantly by what an owner has offered them, so why not provide a space that makes them more efficient, effective and happy in their surroundings? Owners that recognize the needs of today’s corporate lifestyle inhabitants are the ones that will stay ahead of the competition curve.  These are the same owners that want to position their property for success. That success comes with having the right look, feel, technological infrastructure, eco-responsibility and building amenities.

How Does Rebranding Help?

First and foremost, rebranding attracts new leasing activity. To most effectively accomplish this, simply display the visualization images and renderings to showcase how the project will look once it is completed. When current and prospective tenants see these images, it creates a buzz, and new leasing numbers are born. Existing tenants have been known to take more space or, at least, renew their current leases when they see what they are going to be a part of in their office building. Additionally, prospective tenants immediately see the advantage of choosing this particular property with the knowledge that this new space is on the way.

In the assessment of the property, it is a due diligence and evaluation team, comprised of architectural and design professionals, that can re-asses the building’s rentable and usable factors. It is in this process where they can evaluate if common or core space in the building exists that might be re-captured and converted to lease space, which translates to increased revenue for the owner.  Beyond tenant numbers and lease times, the updated structure can increase rental rates as the value of the tenant dollar is greater. With that, owners elevate and enhance their tenant mix and, in the end, add to the investment.

Are We Right for Rebranding?

Each property is different, and a careful evaluation is required by an experienced team to understand the infrastructure and how best to address the opportunities at hand. Through the thorough investigational period, a project team can assist in determining if the numbers ultimately will work for those considering the rebranding process.

In the end, to reinvest, rebrand and restore a building to a higher rating is less expensive than new construction — meaning, it just makes sound financial sense.

Jo Heinz is president and CEO of Staffelbach in Dallas.

©2008 France Publications, Inc. Duplication or reproduction of this article not permitted without authorization from France Publications, Inc. For information on reprints of this article contact Barbara Sherer at (630) 554-6054.