Commercial Economics of Steller Floors

Steller Floors generate profits in commercially leased and rented properties.

Every landlord wants to provide beautiful and easy spaces for tenants to live and work. However, until recently, economics could get in the way.

Beating the “downward-spiral” of losses

When tenants might damage flooring in a space, some landlords use the lowest quality materials to reduce the effect of repairs on the bottom line. Then, a “downward-spiral” begins, where lower quality materials lead to low-quality tenants (and so on). This cycle ultimately leads to a decline in the value of the property for the landlord.

For this reason, many landlords think of flooring as a total loss. In a common but wasteful scenario, the flooring in question (usually LVP or carpet) must be torn up and thrown away between tenants. It would not be strange to question whether flooring could ever be more than a loss on a financial statement.

Taking out the trash

At Steller Floors, we are breaking this unhealthy loss-cycle by providing high-quality flooring products that are easy to repair and replace, and can turn these wasteful and expensive flooring practices into a profitable enterprise for landlords.

Commercial Value

Here are the steps:

1. Invest in flooring products that are truly beautiful

High quality tenants, like young professionals, are looking for spaces where they can relax, entertain, and do remote work. Our surveys show that tenants in competitive markets would pay more for a space with hardwood floors and the premium could be 5-10% over market value thanks to its highly desirable qualities.

2. Take the deduction at tax time

Steller Floors are designed to be moved and removed, which helps them qualify as Section 1245 personal property instead of real estate. This designation results in substantial benefits to the property owner in the form of accelerated depreciation. Ask your CPA for details about savings on both the materials and installation.

3. Fill your tenants in on the benefits

Communication is key! Tell tenants that the hardwood floor in their space will improve their daily lives. A Steller Floor will also have a lower impact on their deposits should a problem occur. Planks with scratches that reveal raw wood over more than an inch should replaced at their fair market value. This penalty on their deposit will ultimately be far cheaper than needing to refinish the whole floor–increasing their chances of getting a portion of their deposit back.

4. Repair and replace with the ultimate convenience

Traditional hardwood floors need to be refinished throughout their lives and then need to be torn up and thrown away. During refinishing, specialized labor can be difficult to find, book and pay for. Wouldn’t it be nice to skip this part of the process and use a simple suction cup to remove, replace and repair planks in seconds instead of weeks?

5. Benefit from low labor costs and fast install speeds

When repairs and replacements are undertaken in an instant by unspecialized labor, labor costs and rental downtime (when tenants aren’t paying rent) are heavily reduced which improves both cash-flow and margins. Why choose any other product?

Ready to talk numbers? Ask for our detailed price comparison by contacting us!