Decide to buy or lease
Before you go running into the marketplace, take time to analyze your current needs and future projections. There are deals for buyers and tenants, and a seasoned real estate expert can help you weigh your options.
If your company is changing — either growing or downsizing — a lease offers valuable flexibility.
“It’s a tenant’s market,” says Andrew Kahn, a senior office associate at NAI Bergman, a Cincinnati-based real estate firm. “You can get very favorable lease terms right now if you have a good track record as an existing company that doesn’t late-pay, stays on top of their bills and is managing their business well.”
Conversely, if you are well established, now may be the time to buy — provided you have a large amount of capital.
“This market is an opportunity for those companies, people or organizations that have cash,” says Albert Bolter, real estate market analyst at Colliers Abood Wood-Fay in Miami. “They’re king because they can come in and get these properties and assets at reduced prices or markdowns.”
Even if you aren’t sitting on a mattress stuffed with cash, you may still find a deal. Subleases are flooding the market, and they offer a unique opportunity for the right kind of operation. Subleasing may benefit a younger company or one with less-than-stellar credit. However, the perks aren’t without risks. Keep in mind that subleasing could mean taking on someone else’s problems, such as a shaky landlord or hidden costs.
If you find yourself with extra space that you’re thinking of subleasing for additional income, keep in mind that you will likely suffer the wrath of the market and may have to accept rates that are lower than your own rent. Still, in a pinch, many CEOs may decide that some rental income is better than none.
Every market is unique, and cost can vary significantly between downtown and suburban locations. You may find an urban steal, but be mindful of other aspects, such as parking and access to transportation.