Should You Buy or Rent an Office in Manhattan?

buy-or-lease-commercial-nyc-office-space-info-01Deciding whether to buy or rent an office in Manhattan is not made by a “one-size-fits-all” perspective. You have to determine square footage, cost, future growth, space for employees, and industry needs. Also, you have to know your position and if you have the capital to buy a place of your own.
Location is crucial. Know your target market, demographics, and their locations. Geographic needs may limit your options for buying or leasing commercial real estate.

Lastly, you will ultimately have to face legal issues during the process, such as negotiations, paperwork, and contracts. Working with a real estate attorney for office purchases in Manhattan will make the process a lot less confusing and leave you feeling like you made the right choice to buy or rent.

Pros and Cons of Leasing or Buying Office Real Estate

Over the next few sections, take a look at some key differences in buying or renting an office space, as well as the benefits and drawbacks of each element.

Leasing Comparison

better-value-buy-lease-manhattan-office-top-nyc-real-estate-attorney-02When leasing or buying an office in Manhattan, you’ll have to negotiate and sign a contract. Being really specific about your needs will give you less negotiating room with the property owner. Leases can range from 1 to 5 years, and the majority of them are renewable.

Pros of Leasing:

  • Paying on a monthly lease has less financial exposure than buying
  • It gives you increased flexibility to change locations later
  • The property owner deals with most of the maintenance concerns.
  • Smaller spaces are readily available to rent, whereas office space for purchase tends to be large

Cons of Leasing:

  • Leasing someone else’s real estate suggests you’ll be limited in exactly what you can do
  • Some leases can last for 5 years or more
  • There are usually hidden costs that reveal themselves later
  • Leasing doesn’t allow for much customization for your business

Purchasing Comparison

top-lawyer-for-commercial-real-estate-transactions-nyc-03When purchasing an office in Manhattan you’ll most likely want to have a Special Warranty Deed issued. It protects you against liability for debts or damages caused by the previous owner.

Pros of Buying:

  • Your personal property can be used as collateral
  • You’ll have a fixed overhead with your commercial loan
  • You can get revenue from subletting
  • You have the flexibility to manage the home, and use the area how you desire

Cons of Buying:

  • Capital requirements are usually pretty high
  • There’s no guarantee that the property’s value will appreciate over time
  • You’ll have greater upkeep responsibilities
  • You’ll have to ensure your office is properly zoned if you plan to build on it

Work with a Professional You Can Trust

As with any major decision, hiring a professional that is looking out for your best interests can save you money, time, and future stress. A real estate attorney for office purchases in Manhattan can share his or her knowledge about the local neighborhoods that will be right for your business.

Give us a call at (646) 759-0400 or send us a message at the law offices of David J. Aronstam. We can arrange for a free, no-obligation consultation to help you gain clarity during the decision-making process.

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