Since COVID-19, the commercial real estate market has floundered leading to mass layoffs and vacancies. What’s worse is that even when COVID is in the review mirror, several companies will continue letting their employees work from home given how well they’ve proven they can operate remotely.
What does that mean for you as someone that’s looking to move into a business building? It means you have options.
Prices on commercial real estate are low as are development costs if you’re looking to build rather than buy. So, should you build or buy your commercial building? Keep reading to understand the pros and cons of your choices!
The Pros of Building
Building commercial real estate can seem like a prohibitively costly venture. When you consider tax benefits some localities grant developers though, costs are more manageable than you think.
Even if costs are higher with building vs buying, building gives your company the ability to bake design components like a seamless commercial roof or updated earthquake protections into your property.
That flexibility may be a necessity depending on what you do and where you work.
The Cons of Building
Tax benefits and customization are great motivators for developing a commercial building. Getting permits and dealing with construction costs are huge drawbacks though that could outweigh the good.
Building, particularity in impacted cities, can be nearly impossible due to red tape around development. That means needing to hire attorneys, real estate experts, and other partners before you can break ground. Then, you’ve got an active construction site to pay for.
It could take years for you to be able to actually move into your building.
The Pros of Buying
Buying a business building that’s ready to be moved into usually means lower upfront costs. It also means being able to get your company situated immediately.
Furthermore, with the commercial real estate market in shambles, you can find extraordinary deals on building purchases. These deals may far outweigh any tax incentives you’d get by constructing your own space.
The Cons of Buying
Buying an office building means taking it as-is without tax advantage guarantees. That can create issues, particularly if you have special floor plan requirements to accommodate your unique line of business.
Modifications can usually be made to existing buildings to satisfy what you’d like to accomplish. Understand though that infrastructure choices made in your building’s original design may prevent you from making certain changes.
No Matter What, It’s a Great Time to Invest in a Business Building
If you’re in the market for a business building, whether you choose to construct or buy, you’re going to get better rates than you would have in 2019. Hopefully, that emboldens you on your path to securing the perfect space for your company.
Finding the perfect office space can be hard, even when exercising the guidance we’ve shared. If you find yourself in need of more advice, know that we publish excellent content on commercial real estate regularly.
You can find that content by diving deeper into our blog!
