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Friday, Jun 9, 2023

Business Relocation

BUSINESS RELOCATION: BUY OR LEASE? By Rob Fullarton Before you make any final decisions about leasing or buying a new commercial property you should consider the following: 1. Start your decision making process up to one year before you have to move. By allowing yourself this time you can explore the marketplace and find out what sales prices are for your type of property needed and learn to compare these prices with the rental market. 2. What are my space requirements for the next 5-10 years? Many businesses move into new facilities that meet their requirements for today but find themselves out of room within 12-24 months. This can be a problem if you have signed a 5 year lease and find yourself with no room to hire new employees. When buying, it can be lucrative to purchase a building a slightly larger building than needed, with built in tenants. This allows future growth potential and generates income to offset your monthly mortgage. 3. Consider the location of your office carefully. There can be large differences in values between the sub-markets in the San Fernando Valley. For instance, North Hollywood prices can be 10-20% lower than Burbank. What will re-locating 2 miles north of Ventura Boulevard do to your business. Mortgage payments or rent payments can be quite different by moving from one neighborhood to another in the Valley. 4. Talk to a qualified commercial real estate agent about values and opportunities available. Many businesses looking to lease never consider buying. However, by searching all possible alternatives many companies can afford to buy a property and spend no more than if they lease a similar property. 5. Talk to a commercial real estate loan agent to see how you business qualifies . Many businesses are taking advantage of today’s low interest rates and small down payment requirements of the SBA loan to buy rather than lease. By being pre-qualified and by working with a professional real estate agent you can act quickly when the right opportunity is found. In today’s active real estate market you must be ready to move when the right property is found. You can be ahead of the competition if you have a pre-qualification letter in hand and feel comfortable with your knowledge of the marketplace since you have spent the time to research all of the opportunities available for your company. Rob Fullarton is with Gribin Properties. Gribin Properties specializes in sales and leasing of office, retail and industrial properties in the San Fernando Valley.

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