Curb Appeal = Higher Value: Why Looks Matter in Commercial Real Estate

Curb Appeal Isn’t Cosmetic, It’s Profitable

When it comes to retail properties, first impressions matter more than most realize. For owners of small strip centers and neighborhood retail assets, the visual condition of a property, its curb appeal, is not just about aesthetics. It’s a key factor in tenant interest, leasing velocity, and long-term asset value.

A study published in the Journal of Property Research titled “Understanding the Contribution of Curb Appeal to Retail Real Estate Values” provides strong evidence to support this. The researchers found that certain elements of curb appeal had a statistically significant impact on the sale price of retail properties, especially restaurants.

What the Research Shows

The study evaluated nearly 200 restaurant property sales in Los Angeles and San Diego. Researchers analyzed photos of each property and had participants rate them across three categories:

• Atmosphere – Cleanliness, safety, vibrancy, and landscaping
• Architecture – Quality of materials, façade design, and structural aesthetics
• Authenticity – Uniqueness or character of the building

The results were clear: only the atmosphere and architectural dimensions contributed positively to sales price. Authenticity, while interesting from a design standpoint, had no measurable impact on value.

In other words, properties that looked safe, clean, and well-designed consistently sold for more money.

“The greater attractiveness of a store, based on architectural and atmospheric attributes, is likely to increase customer patronage and consequently its income potential… and subsequently sales price.” – Freybote, Simon, & Beitelspacher (2016), Journal of Property Research

Real-World Lessons from the Field

We’ve seen these principles in action firsthand. A recent property in Gardena underwent simple exterior upgrades – new paint, updated lighting, clean landscaping, and modern signage – and the transformation was dramatic. Foot traffic improved. So did tenant interest. The investment was modest, but the payoff was immediate.

Contrast that with another property recently added to our portfolio: years of neglect have led to $1.7 million in necessary repairs just to make the asset lease-ready. If sold in its current condition, the property might only fetch $2 million. That’s a tough financial pill to swallow, and one that could’ve been avoided with consistent curb appeal upkeep.

Invest Now or Pay Later

The takeaway is simple: deferred maintenance can become a serious liability, both operationally and financially. Meanwhile, modest investments in a property’s exterior – landscaping, repainting, lighting, and signage – can increase tenant retention, improve rental rates, and enhance resale value.

Curb appeal is not a last-minute fix before listing your property. It’s an ongoing strategy that protects your investment and positions your asset for long-term success.

Talk to a Property Management Expert

If you’re a property owner or investor looking to improve the performance and profitability of your retail asset, our Property Management team can help. We’ll walk your site, evaluate potential curb appeal improvements, and identify value-add strategies tailored to your goals.

Contact us today to schedule a no-obligation consultation.