Recent trends in the commercial real estate world might make leasing seem less attractive. Low-interest rates have made purchasing more affordable, and skyrocketing property values make ownership appear enticing for those seeking appreciation. Additionally, changes in lease accounting standards are removing some financial benefits of leasing. However, despite these factors, leasing space can still be the best option for many businesses. Let’s explore why leasing might be the right choice for you.
Leasing is Often Less Expensive Than Buying
The first reason to lease space is that it is usually less costly than buying. While leasing requires some upfront costs like deposits and tenant improvements, these are much lower than the down payment and reconfiguring costs involved in buying a building. Finding small, high-quality standalone space is also difficult, especially if your company needs a specific type of space, like a Class A high-rise or an industrial building with unique features.
Leasing Offers More Options
Leasing often gives businesses more space options, especially in central business districts, where most office spaces are available for lease. While suburban markets may have more properties for sale, they often consist of large, vacant campuses or small neighborhood offices that may not meet your company’s needs.
Leasing Provides Flexibility
Leasing offers more flexibility than ownership. You can quickly adjust to your business’s changing needs when your lease expires. Selling a building can be time-consuming and costly, especially if you’re not willing to lower the price. Leasing allows you to move and adapt your space as your business evolves.
Leasing Means Fewer Maintenance Responsibilities
Another advantage of leasing is the ability to leave building problems behind. If a space needs major improvements, you can move to a new location and let the new landlord handle the repairs as part of the move-in concession package. If you own the building, you’re responsible for fixing its problems, which can be a significant financial burden.
Leasing Helps Build Community
Leasing space in a shared building also provides community benefits. You can connect with other businesses in the same building, building relationships that can simplify vendor networks and even reduce employee turnover. These locational benefits are harder to achieve when you own your building and are more isolated.
Even after outlining all the information above, writing a letter of intent (LOI) can still seem daunting. That’s why the Leveraged CRE Team at Commercial Properties, Inc. is here to help locate commercial space for lease and assist in using a letter of intent to land such space. Contact us at (480) 330-8897 or send us an email at request@leveragedcre.com.
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Meet The LeveragedCRE Investment Team
Phill Tomlinson and Eric Butler are seasoned commercial real estate brokers with over 44 years of combined experience. They lead the LeveragedCRE Investment Team at Commercial Properties, Inc. (CPI) in Scottsdale, Arizona, specializing in investment sales and tenant/landlord representation across the Phoenix and Scottsdale submarkets.
The team leverages their extensive knowledge and expertise to help investors and property owners maximize their returns and navigate complex real estate transactions with confidence.
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