NOT TO LEASE or
Is it better to own or lease in Wichita?
W ith the recent number of significant developments and growth in differing sectors of the Wichita mar- ket, an important question arises: whether to own or lease your commercial property. Do you want office space downtown, where new investment has created significant changes, with lower rates in some areas? Do you want your industrial operation near the airport where there is high traffic due to the recent expansion? Or does being in the industrial sector near similar business operations inter- est you? Do you want to be northeast with other significant office users? Would the northwest retail support another big box operation? All of these are imperative consider- ations and all extremely financially significant. Leasing provides agility to businesses, especially busi- nesses in growth stages that can merely assess their current space needs on a short-term basis. According to Mike DeHass, MAI, an appraiser with Martens Appraisal, the decision to buy or lease could differ depending on the company.
“The question may best be answered by where a particular company is in their life cycle,” DeHass said. “New, rap- idly growing companies would best be served by leasing where a stable business should consider ownership. If the business is very volatile and only a 2 to 3-year projection on buildings needs are possible, leasing may be the best solution.” Leasing also provides the opportunity to make capital in- vestments in areas beyond commercial real estate. Patrick Ahern, SIOR, CCIM, Vice President of Office Services with NAI Martens, says taxes are important to take into consid- eration. “A huge benefit of leasing commercial real estate is that rent is tax deductible,” Ahern said. “In ownership, mort- gage interest, property taxes, maintenance costs and de- preciation are all deductible but no equity built on the prop- erty can be deducted.” Ownership encompasses the idea of “instead of paying
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