Seeing Decline in CRE Value? Here's How to Stop It

The uncertain global economy is the sad reality of our lives. It’s not only affecting the quality of life but also commercial sectors including “commercial real estate”. In recent years, many businesses and investors like you have been concerned about the decline in Commercial Real Estate (CRE) values.

Workspace culture, economic uncertainty, and numerous other factors impact property valuations. So, if you’re dealing with this challenge in Atlanta, the good news is, there are strategic ways to keep your assets stable.

Let’s discuss 7 proven tips to protect your CRE value in Atlanta. With insights from Terra Alma, a trusted CRE advisory in Atlanta, you'll find actionable solutions to tackle this head-on.

1. Know Your Market Inside and Out

Nothing is more important than understanding your local market. Each neighborhood in Atlanta has a unique value and demand pattern. According to CBRE’s latest report, Atlanta’s office vacancy rates increased to 32.4% in Q1 2024, due to shifts in work-from-home and hybrid work models. This trend has pressured landlords and investors to adapt and re-strategize.

"Working with a CRE advisor in Atlanta is crucial in these situations,” said Anna Hunt, a seasoned commercial real estate advisor at Terra Alma. “They have up-to-date insights and can forecast which areas are rising or declining so, investors can make better choices."

Working with Terra Alma, a leading real estate advisory in Atlanta, can give you a valuable edge in making market-driven decisions.

2. Enhance Your Property with Modern Amenities

Modern amenities can significantly boost property appeal and, consequently, value. With tenants increasingly prioritizing quality and comfort, adding amenities like high-speed internet, energy-efficient systems, or coworking spaces can attract a higher class of tenants.

Research from JLL reveals that properties with energy-efficient designs have a higher occupancy rate and rent premium. A small investment in features that tenants need and value can yield notable returns in the long term.

"Tenants want a place that feels tailored to them," says Michaela Boone from Terra Alma. "Amenities that cater to today’s needs can make the difference between high vacancy and full occupancy."

3. Upgrade to Energy Efficiency Standards

Investing in energy-efficient features isn’t just an eco-friendly choice; it’s also a financial advantage. Studies from the U.S. Dept. Of Energy, show that buildings with energy certifications (like LEED) can save 20-30% on energy costs. Tenants, especially corporate ones, seek green buildings, and in competitive markets, a certified building might be the deciding factor.

"Energy-efficient properties attract high-value tenants who care about their carbon footprint," says Kanika B., a CRE expert at Terra Alma. "These tenants often pay premium rent, which can offset any upfront costs for upgrades."

Adding these features can attract long-term tenants and improve property value, setting your building apart from non-efficient competitors.

4. Adopt Flexible Leasing Models

The rise of hybrid work has reshaped tenant expectations. As a result, flexible leasing models have become an appealing option for many businesses. Data from Cushman & Wakefield indicates that demand for flexible workspaces grew by over 41% in the past two years (23% in 2022, and 18% in 2023), highlighting the need for shorter leases or customizable spaces.

"Offering flexibility is no longer optional," says Terra Alma’s CRE advisory team. "We encourage our clients in Atlanta to consider lease options that adapt to market demands. By meeting tenants halfway, you can improve occupancy rates and maintain steady cash flow."

This approach keeps your property competitive in a fluctuating market, minimizing the risk of long vacancies.

5. Use Data-Driven Property Management

Modern property management tools allow for efficient data tracking, enabling owners to monitor rent trends, vacancy rates, and tenant needs in real time. For instance, predictive analytics can highlight when maintenance will be needed, preventing costly repairs later. In a competitive CRE market like Atlanta, proactive management becomes a key selling point.

"Tech is your ally in this industry," says Bruce H. "With data-driven insights, you can keep an eye on tenant needs and market changes, adapting before issues become losses."

6. Regular Property Maintenance and Renovations

Regular maintenance is vital to maintaining value. Deferred maintenance can lower property appeal, leading to extended vacancies or reduced rents. The National Association of Realtors states small, consistent maintenance can significantly reduce large repair costs.

Additionally, light renovations like painting, landscaping, or updating the lobby area can offer high ROI without breaking the bank. These updates keep properties fresh, making tenants feel they’re getting value for their rent.

"Preventive maintenance is better than costly repairs," advises Kanika B. our CRE expert. "It’s a way to preserve and boost value rather than spend big later."

7. Leverage a Reliable CRE Advisory in Atlanta

A dependable real estate advisory team, like Terra Alma, can be invaluable when managing CRE properties in Atlanta. Our experts in the area can help you navigate complex market trends, tenant negotiations, and asset management to keep your properties competitive.

"The market can be unpredictable, but having Terra Alma’s experienced advisors on your side can make a world of difference," says Anna Hunt, a commercial real estate advisor in Atlanta. "We help investors in Atlanta maximize their property value, even during uncertain times."

FAQs

1. Why are CRE values declining in Atlanta?
CRE values have faced challenges from the rise of remote work, economic shifts, and changing tenant needs. Knowing the factors at play can help you make strategic choices.

2. What is a CRE advisory?
A CRE advisory, like Terra Alma, is a team of professionals specializing in market analysis, tenant negotiations, and value enhancement for commercial properties.

3. How do energy-efficient features boost property value?
Energy-efficient upgrades can save 20-30% on energy bills and attract tenants willing to pay premium rents, especially eco-conscious businesses.

4. What is flexible leasing, and why does it matter?
Flexible leasing allows tenants to adapt lease terms based on their business needs. It's essential in today’s evolving work environment and helps property owners maintain occupancy.

5. How can Terra Alma help with CRE investments in Atlanta?
Terra Alma provides comprehensive real estate advisory in Atlanta, guiding investors on market trends, tenant management, and maximizing property value.

Conclusion

Take these steps or work with Terra Alma, a leading commercial real estate advisory in Atlanta, to protect your assets from further decline. Our CRE experts have decades of local experience and we know Atlanta’s market like the back of our hand.

Trust us and we’ll guarantee your satisfaction.