COM­MER­CIAL CO­NUN­DRUM Whether to buy or lease of­fice space is a ma­jor de­ci­sion for any busi­ness

StarMetro Calgary - - SPORTS - MARIO TONEGUZZI

To buy or to lease? That is the ques­tion for busi­ness own­ers to­day.

When it comes to find­ing a home for a busi­ness, the op­tion of buy­ing the space rather than leas­ing it is one that many are tak­ing more se­ri­ously th­ese days.

A re­port by com­mer­cial real es­tate firm Bar­clay Street Real Es­tate says the of­fice-condo con­cept has cre­ated an op­por­tu­nity for oc­cu­piers to own their of­fice space with the ad­van­tages of hav­ing fixed and clear costs, full con­trol over the de­sign within the premises, and tax ben­e­fits not avail­able to leas­ing ten­ants.

“The de­mand for of­fice con­dos is typ­i­cally driven by pro­fes­sional ser­vice firms – small to mid-sized busi­nesses such as engi­neer­ing, law, con­sult­ing, ac­count­ing or con­tract­ing firms look­ing to build eq­uity, as well as lo­cal and in­ter­na­tional in­vestors seek­ing pre­dictable cash flow,” the re­port reads.

Yan Gong, a REALTOR® with RE/MAX House of Real Es­tate, said a buy­ing or leas­ing de­ci­sion is very much the same as what peo­ple en­counter when de­cid­ing whether to pur­chase or rent a home.

“Usu­ally, the com­mer­cial peo­ple are look­ing for a long-run busi­ness op­er­at­ing in that prop­erty,” he said. “I would say if you have the cap­i­tal, if you have the money, of course buy­ing is bet­ter than leas­ing in the long run. If you de­cide to stay in that busi­ness, stay in that area, stay in that prop­erty for a very long time, then of course you should buy.”

Gong said buy­ing a com­mer­cial prop­erty has the ben­e­fit of a siz­able por­tion of a mort­gage pay­ment go­ing to­wards the prin­ci­pal.

“If you are a ten­ant, you’re just los­ing all the rent,” he said. “A to­tal loss.”

From a com­mer­cial real es­tate per­spec­tive, buy­ing a prop­erty to house your busi­ness is some­thing that can be at­trac­tive for any type and size of busi­ness.

“The res­i­den­tial mar­ket has slowed down over the last 12 months, but I haven’t seen the same pat­tern re­flected in the com­mer­cial mar­ket,” said Gong. “I’m al­ways busy for com­mer­cial.

“All types of busi­nesses need some sort of di­ver­si­fi­ca­tion.”

Buy­ing a com­mer­cial prop­erty can be a worth­while in­vest­ment and a way to build up wealth. It is also a way to be free of land­lords.

A well-fi­nanced prop­erty ac­qui­si­tion can free up work­ing cap­i­tal for busi­ness own­ers. One thing to con­sider, how­ever, is that if you buy a prop­erty, then you take care of its op­er­at­ing and main­te­nance costs.

Leas­ing is a bet­ter op­tion for com­pa­nies that don’t have the cap­i­tal to buy, com­pa­nies with an un­sta­ble fi­nan­cial po­si­tion and uncer­tain fu­ture, and com­pa­nies that sim­ply don’t want the re­spon­si­bil­ity that goes along with own­er­ship.

‘‘

IF YOU ARE A TEN­ANT, YOU’RE JUST LOS­ING ALL THE RENT. A TO­TAL LOSS.”

YAN GONG RE/MAX HOUSE OF REAL ES­TATE

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.