Renovations: One Strategy Does Not Fit All

As an asset manager at huge Salt Lake City-based CRE investment firm our credo coming from on high was ‘curb appeal is everything.’ The former CEO used to say, when the firm’s strong focus was on multifamily, that curb appeal was absolutely critical such that potential residents would want to come on site to see the property vs. driving away. Another credo was to be hyper-critical in determining, defining  and financially quantifying the level of improvements or upgrades to the property for both common areas and units. We could not and would not ‘over improve’ the asset thereby creating a basis in the property that wasn’t supported by the market or submarket. I’ve seen countless cases in Utah where value-add properties were improved to a level that greatly exceeded the ability of the asset to generate a reasonable return on investment. I assume the owners may learn the hard way that recapturing those upgrade dollars may, and I stress ‘may,’ come at the time of sale. But even that, in our changing market, may be a momentous challenge.
Svikhart & Associates, a Salt Lake City-based real estate services company, focuses on asset management, brokerage listings and sales, and all aspects of a multifamily investment. Specific diligence regards property operations and strategies to maximize asset performance and value. Additionally, the firm assists owners regarding economic, financial and market factors that impact returns on investment. The firm targets ‘Mid-Tier’ assets which it defines generally as 10-to-60-unit properties.
Please find us at or contact us at 801-550-5684 to learn about the real estate services the firm provides. To subscribe to the firm’s newsletter addressing events of the day please follow this link Newsletters.

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