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May 27, 2017

Amping Up Suite-to-Street Appeal

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Amping Up Suite-to-Street Appeal

Commercial spaces are benefiting from homey staging touches that draw client interest and close deals.
staged office space

Commercial spaces are benefiting from homey staging touches that draw client interest and close deals.

When it comes to creating favorable first impressions during showings, commercial practitioners are starting to take a page out of the residential sales playbook. Professional stagers are reporting an uptick in interest from commercial brokers who recognize that an office suite, a retail space, or even a vacant warehouse can benefit from an appearance boost. While only about 5 percent of commercial brokers currently use professional stagers to help get a building or retail space leased or sold, according to Barb Schwarz, founder of Stagedhomes.com, she and other staging pros see enormous growth potential. In the commercial space, staging can help with your clients’ company branding while offering value for a transaction.

Residential Crossovers

Minneapolis-based stager Shar Sitter has a background in interior design and a strong portfolio of commercial clients. In her 11-year career, Sitter has staged a wine and liquor store, the entryway for General Electric’s Minneapolis headquarters, an 18,000-square-foot counseling and healing center, model units for assisted living centers, and even the entrance to a Keller Williams brokerage that sought to attract “high-ticket” agents. Her full-service business, Rooms With Style, includes a 3,000-square-foot warehouse stocked with residential furniture and accessories.

Her clientele was exclusively residential until a large apartment complex hired her to stage a model unit. “They liked it so much they said, ‘Will you do our common areas, offices, and entryways?’ [I found] it’s really not so different, because you’re still targeting an audience. Instead of targeting a buyer, you are targeting the client’s customers. It’s about conveying who they are and what they want to sell.”

If there is a key distinction between the goals of residential and commercial staging, Sitter observes, it’s that the commercial stager is more likely to be helping project a company’s brand rather than preparing a property for sale. Recently, she staged a construction company’s front entrance, which required her to create a space to reflect two distinct, and sometimes contrasting, needs: a professional space for client meetings and an environment filled with “men trouncing around in boots.”

The environment, she notes, had to be stylish, yet functional. The rough barn wood she selected fit the masculine environment of a construction company. But she also needed to appeal to homeowner clients who come in for consultations and need to see that the company is up on current home renovation trends. So Sitter staged the lobby with dark gray leather chairs and a soft rug, a large powerful horse as featured artwork, plus the company’s logo in metal hanging on the wall. The kicker: white shaker-style cabinets were added to the employee kitchen, demonstrating to visiting clients an awareness that “the number one kitchen color now is white.”

Staging commercial properties is often a balancing of interests, says Austin, Texas–based stager Richard Kline. Employers and stagers should be mindful of creating a comfortable space for workers while projecting the company’s brand. Kline recommends that stagers and commercial clients have conversations with human resources staff to set design expectations and for relevant insights about the company’s business practices. Kline recommends that brokers or business owners hire a stager who has experience working in an office environment.

Selecting a Stager

  • Visit the sites for the International Association of Home Staging Professionals or Real Estate Staging Association.
  • View candidates’ portfolios.
  • Interview a minimum of three stagers.
  • Compare costs. Stagers’ bids are based on the number and size of rooms or suites, accessories required, moving trucks, labor, and furniture rental costs (three to six months in advance). Stagers may charge a flat fee, hourly rate, or square footage rate. The average hourly rate is $100, according to Barb Schwarz.
  • Interior design degree: Not required. Stagers may or may not be interior designers.
  • Warehouse and inventory: Not all stagers carry inventory, and the overhead is not required; instead, stagers may create customized packages using furniture rental sources.

Kline, owner of the full-service staging company The Staging Guy, did not solicit commercial gigs; instead, he transitioned into commercial spaces via referrals. This is a common route for residential stagers who have reported staging yachts, medical offices, building exteriors, condominium and office common areas, office buildings, and model units. In Kline’s case, many of his luxury residential clients are business owners who sought his help for their work environments. For instance, after he staged a client’s home that was going on the market, the same client hired him to furnish a second home, and again to stage a 50,000-square-foot beverage distribution center.

Staging, Schwarz explains, can take the cold edges off of commercial spaces by adding sophisticated residential touches and creating a space that tenants can envision for their business. That was the goal when Bob Kenehan, owner of DBP-Chicago, a design and printing company, hired Schwarz to stage two floors of a downtown office building. Kenehan was leasing 8,000 square feet of loft space—2,000 square feet for his business—and wanted to sublease the remaining 6,000 square feet. As part of this project, Schwarz replaced the carpets and bathroom floors; repainted walls; added contemporary office furniture, paintings, standing mirrors, and conference tables; and hung attractive hand towels and a Marilyn Monroe portrait in the men’s restroom. When prospective tenants exited the elevators, they were greeted with music. “You get them with ‘hello,’ ” says Schwarz.

Within two weeks, the entire space was leased. “It was an amazing transformation,” says Kenehan, noting he was able to sublease without lowering square-footage rents because of the improved aesthetics. The staging fee was roughly 20 percent of one month’s $8,000 rent. “It was such an easy ROI decision.”

Staging Without Stagers

S2 Capital, an Addison, Texas–based multifamily investment firm with a portfolio of more than 5,000 apartments, has been staging its model units and common areas for five years, according to Scott Everett, principal of S2 Capital. Rather than hire professional stagers, his company uses a national marketing group that caters to the S2 target demographic of millennials and young professionals.

“We stage our models and mimic high-end properties,” says Everett, noting that S2 Capital will put down $10,000 to $12,000 to fully stage a model unit and $1,500 to stage a mini-unit model. Additional outlays cover pool furniture, outdoor televisions, and lobbies and common areas. “We want [the model unit] to feel flashy and people to think they could also have a cool, hip apartment. We spend money and we see it pay off.”

Joseph Wolff, senior vice president of CBRE, Philadelphia, says his firm, like many commercial brokerages, does not hire stagers on its own but rather encourages building owners to do so. Older buildings may undergo renovation from the street to the suite: lobbies, elevator cabs, common corridors, and bathrooms. “When someone walks through a brand-new lobby, rides the elevator, enters the common area lobby, and sees the new bathrooms and the spec suite—that’s the staging process,” Wolff says.

Some landlords build out spec suites, spending $50 to $60 per square foot to fully create 2,000- to 3,000-square-foot spec units. “People walk in and see this ‘wow’ space.” These units are loss leaders, but “it’s the difference between leasing and not leasing,” says Wolff.

Stager Sandra Holmes knows this difference first-hand. While completing several model units for a south Florida retirement community, Holmes voiced concerns about the common areas, which were not very welcoming. “This first impression is not going to work,” she advised her client—several times. After the client relented and Holmes refreshed the common areas, sales grew 25 percent that year over the prior year. Consequently, the same client hired Holmes’ company, Home Staging Concepts, to stage four buildings encompassing 16 floors.

As landlords and brokers continue to be on the lookout for smart ways to reduce vacancies, the idea of staging within a commercial property is not likely to remain a novelty much longer.

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