What are the most common asset repositioning strategies?

1 Physical Repositioning

Physical repositioning involves renovating, upgrading, or expanding the existing structure, systems, amenities, or design of a property to make it more attractive, functional, and competitive in the market. It can range from cosmetic improvements, such as painting, landscaping, or lighting, to major overhauls, such as adding new floors, units, or facilities. Physical repositioning can increase the occupancy, rent, and tenant satisfaction of a property, as well as reduce maintenance costs and environmental impact.

2 Operational Repositioning

Operational repositioning involves changing the management, marketing, or leasing strategies of a property to improve its efficiency, profitability, and reputation. It can include hiring new staff, implementing new technologies, optimizing expenses, enhancing customer service, creating a unique brand identity, or targeting a different tenant mix or market segment. Operational repositioning can boost the cash flow, NOI, and cap rate of a property, as well as strengthen its market position and differentiation.

3 Financial Repositioning

Financial repositioning involves altering the capital structure, debt service, or ownership of a property to optimize its financial performance and risk profile. It can involve refinancing, restructuring, or recapitalizing the existing debt, securing new equity partners, or selling partial or full interests in the property. Financial repositioning can lower the cost of capital, increase the leverage, or unlock the equity of a property, as well as diversify the sources of funding and exit options.

4 Adaptive Reuse

Adaptive reuse is a special type of asset repositioning that involves converting a property from its original or obsolete use to a new and more profitable use that meets the current market demand and standards. It can involve transforming an industrial building into a residential loft, a retail store into an office space, or a hotel into a senior living facility. Adaptive reuse can revitalize a property, extend its life cycle, and create value for the community and the environment.

5 Mixed-Use Development

Mixed-use development is another special type of asset repositioning that involves combining different types of uses, such as residential, commercial, retail, or entertainment, within a single property or a master-planned project. It can involve adding new components, integrating existing ones, or reconfiguring the layout and design of a property. Mixed-use development can create synergies, diversification, and convenience for the tenants, owners, and visitors of a property, as well as enhance its vibrancy and sustainability.

6 Repurposing Surplus Space

Repurposing surplus space is a creative type of asset repositioning that involves finding new and alternative uses for the unused or underutilized space within a property. It can involve converting parking lots into outdoor dining areas, rooftops into gardens, or basements into storage units. Repurposing surplus space can generate additional income, reduce vacancy, and increase the utility and value of a property, as well as respond to the changing needs and preferences of the market.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?