Lease vs. Purchase #2

Background

We represented a local flooring retailer who was leasing a warehouse showroom and was ready to own a building of his own. Two options. Buy an existing building or buy a piece of land and build his own. Building on your own with little to no commercial development experience is a tremendous risk. Unexpected expenses can pop up anytime. Trying to “learn on the job” can create delays and also create undo expenses. Time was on our client’s side as his current lease had plenty of term left to accomplish either.

Challenge

Our client had a small geographical area they wanted to be in and there were not many available parcels properly zoned. In addition, there were very few existing buildings that would suit our client’s needs even if it were made available. If we did find a property to develop for them, we need to be sure it is possible to extend their lease for a short time given the uncertain time frame.

Solution

We did a pro forma for our client for them to see what the cost of new construction to suit their requirements would be. This ended up being more than they wanted to invest. So we located every property in the market that would be suitable to our client. We reached out to owners to see if any were interested in selling, and to brokers to see if any of their clients had anything to offer. In addition, we used a proprietary listing system to track each property should it become available. One Saturday I received an email that a property we were tracking had become available for sale. We visited on Monday and it was just about perfect. After some negotiations, we had it under contract in several days.