Don’t rent it, sell it

Converting for-rent space to for-sale space can benefit owners and buyers.

Taking a page from residential properties, commercial owners are applying the condominium-conversion model to their vacant, multi-tenant buildings. Investors and building owners, looking to secure some cash in the uncertain economy, are selling the units in their properties to small businesses.

The conversions offer pluses to both owners and buyers. Building owners and investors recoup their expenses much faster through unit sales than waiting for a property to fill with tenants. Also, the sales eliminate the risk of tenants moving around, disrupting owners’ income streams.

Small-business owners can shop for the space that best suits their needs, and favorable interest rates make their purchase more attractive than ever. But businesses that own their space lose the flexibility of renting. If their office suddenly expands, small-business owners are faced with selling the space rather than simply renegotiating a lease.

However, the conversions still entice small businesses that can’t afford whole buildings but want the security of owning their space. And, unless commercial office buildings run at 100% occupancy in your market, property owners will continue to see conversions as a viable alternative.

Photo © BrandX Pictures.

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