Our society has historically tried to answer this question for us by assigning certain connotations to each term. Flexibility provided by renting has now tipped the scales a bit as our society has become more mobile and maybe a bit more easily bored with things that stick around too long. Gone are the days where it applied primarily to homes; now you see rental options in wedding dresses, pogo sticks, and even caskets!
In the commercial real estate world, one of the big decisions that faces most companies at one time or another is “Should we lease or purchase our office space?” At CTR, we regularly work with clients to walk through this decision, and below are some questions to think through with your team:
- Is the size of my workforce static?
- When I look 10 years ahead, can I see us still being comfortable in the same building?
- Do I have capacity to manage and operate a building in addition to running my business (whether or not I have other tenants)?
- Is the geographic area I’m in trending in a positive direction as it relates to recruiting employees?
- Do the numbers work on a cash-flow basis without expecting a large appreciation in the building/space itself upon exit?
- Is the overall commercial real estate market providing good value on purchases at the moment?
If you answer ‘yes’ to at least 3 of the above questions, it makes sense to compare the purchase alternatives to the lease market. The answer is that both leasing and purchasing are good options. The right answer for you depends on your current situation and plan for the future.
Please contact us if you want to have chat about your situation!