Can’t Decide Whether to Lease or Buy a New Commercial Property? Let us Help!
If your business has seen enough growth to outgrow your current facility, you’ve probably started browsing available commercial properties for lease or sale throughout the Cincinnati-Dayton and Northern Kentucky region. And you’ve likely begun to realize that buying and leasing commercial properties is nothing like the same for residences. Between the zoning, codes, financing, market projections, and myriad other intricacies, the choice of buy vs rent often isn’t simple.
Acquiring and owning a new commercial property, when it starts as empty acreage or simply entails renovating an existing space, has all the perks that come with outright ownership of property of any kind. But in industrial and commercial real estate, you’re often working with many moving parts and a lot of capital. So for some growing businesses, leasing a commercial property makes more sense. The Schueler Group is the area’s foremost expert in negotiating the best leasing terms for your new venture.
Buying vs Leasing a Commercial Property: a Comparison
There are several ways in which purchasing a new business location differs from renting:
Commercial property transactions require hefty down payments, and then there are associated closing and broker costs to deal with, whereas commercial leases require less paperwork and less capital.
You could be looking at anywhere from 6 months to 2 years if you are purchasing a property. The purchase process itself takes a while. Then, empty land will need developed and constructed on. An existing building will need retrofitted as the business has the sufficient funds. All this before you even move in. With leasing, you are talking 30 to 90 days from the time you choose your new business location to the time you put the keys in the door for the very first time.
What if your business only wants to be in this location for a limited time? Maybe you’re not sure about this expansion, or you’re so sure about it you know you’ll also outgrow this space quickly, too. Leasing a space leaves you with much less problematic exit opportunities than does buying.
One thing you simply don’t get with leasing, financially, is that you don’t own the property. That statement may seem obvious, but the practical meaning is that this commercial space is not your asset; even though its value will appreciate over time, you’re not a part of that appreciation.
A huge benefit to leasing over purchasing when it comes to commercial and industrial buildings – which can be massive, multifaceted and complicated – is that maintenance and repairs are not your problem. Once again – this building isn’t yours. So, yes, you miss out on equity, but you also miss out on dealing with a mechanical failure or a nasty plumbing issue – that’s the site manager’s responsibility.
The Terms of Your Commercial Lease Can Make or Break Your Business’ Growth
The terms of a commercial leasing arrangement can be a significant factor in the success of a business. All kinds of conditions and details are specified in a business lease; including its term or length; as well as any provisions for transferring or assigning it to another tenant if you need to move out earlier than expected, or for subletting part of the space, among a host of other things.
A commercial lease will also lay out whether or not your rent payment includes operating expenses such as utilities, taxes, insurance and maintenance. In addition, the lease can state any “build-out” provisions allowing for improvements to the space; and even whether a competing business can rent a space near yours.
The lease is also where you set out clearly tenant and landlord commitments and responsibilities. This is when your commercial broker shines; they have the knowledge and experience to think of all the nitty-gritty details – things that could go wrong, relationships that could go sour, issues that could arise with the business or the location. Your lease should be optimized with contingencies for every potentially financially-devastating situation that might arise over the course of your time there. Your commercial real estate agent will be able to deftly guide you through this integral part of the commercial lease process.
We Provide Ongoing Assistance With all Aspects of Renting
The right commercial real estate broker can provide assistance in not only finding the right business space to lease, but also in working through the details of a lease, and weighing the pluses and minuses of the particular rental agreement you are considering. Our brokers and agents work closely with clients to make sure they get them a lease tailored to their business’ needs.
But we don’t stop there. Our in-house commercial construction and development firms can perform any renovations you need in your new space, and our property management firm can provide ongoing site management for the term of the lease.
Whether you’re in the market to lease office, retail, mixed-use or industrial space, Schueler Group can help you find the best location to meet your business growth needs. We list commercial properties available to lease in all property categories. We can also help you analyze the benefits of leasing versus buying, and provide tenant/landlord representation.
The Schueler Group can find you the right space to rent for your business needs. Please contact us with any questions, and set up a consultation with one of our top agents and brokers to get started on your next company expansion.