How Solar Adds Value to Real Estate Investment Trusts

by | Oct 13, 2022

As a commercial property owner you have a wide range of ways to ensure a successful property. 

Maybe you’re all about vacancy reductions. Or maybe you’re striving to retain the tenants you already have. Perhaps your tenant mix is in a good place and you’re looking to cut down on operating expenses. Regardless, all these goals add up to one objective in particular, and that’s to increase cash flow.

So what improvements equal more money? Aesthetic or practical improvements? Better marketing? Enhanced tenant services? When it comes to commercial properties, not every single improvement needs to be made–just the right improvements.  

Adding solar to multi-tenant commercial properties is one of the most effective upgrades for increasing cash flow–one that adds value to the property itself while increasing revenue along the way. Commercial solar installations come with a number of benefits, not the least of which is that they can help attract new tenants and offset your operational costs. Let’s take a look at some of the ways installing solar panels can improve commercial properties and help increase revenue.

 

Solar Increases the Value Of Your Commercial Property

The King Energy program is designed to generate financial value for property owners and tenants. The program involves no cost and minimal effort for property owners and creates a secure, long-term source of new rental income.

A typical King Energy commercial solar program increases the value of the underlying property by six to seven figures. This is one of the only ways that a property owner can increase their property value with no capital investment. 

 

Solar Will Increase Your Commercial Property’s Long-Term Rent Roll

Real estate investors use rent rolls to verify the current rental income, search for upside potential in the rental property, and to anticipate problems with future cash flow. And while the basic metric to calculate a rent roll is, well, rent, measuring something like the added value of solar installations isn’t always taken into account.

King Energy rents your roof space, plain and simple. Furthermore, the lease commitment can be up to 25 years, which increases the average remaining lease term of the rent roll. Therefore, a solar program increases the total rent roll and also enhances the financial attractiveness of the rent roll to a potential buyer.

King Energy’s lease is structured to ensure an optimized property valuation. Our solar projects provide verified rent, a highly valued metric for Real Estate Investment Trusts and property owners. A King Energy solar program provides verified rent that directly ties into a property’s rent roll and net operating income, which can add an exponential amount of value to your commercial property.

 

Solar Panels Make Your Commercial Property More Marketable

Upgrading your commercial property with solar makes it more appealing to tenants–and therefore more marketable.

With the average cost of living and rents going up across the board, many property owners are focusing on projects that increase revenue, such as paid-for-parking or leaving event space in their properties. But if you’re looking for ways to take a step further in increasing rent rolls, revenue, and sustainability, installing solar panels can be just the project you need. With more people taking steps to cut costs and limit their impact on the environment, a commercial solar system can make any property more attractive to potential tenants and investors.

 

Final Thoughts

Making your commercial property energy-efficient with solar can increase the value of the property, increase rent rolls, attract more tenants, and reduce your carbon footprint. King Energy provides solar energy solutions that tie directly into the rent roll and the net operating income of a commercial property. This unlocks the opportunity to earn more income by increasing rent rolls through verified rents.