Ownership vs Leasing

rent, I can pay down a mortgage each month,” and if a company buys a building that it outgrows, there is the op- tion to move and lease out the space. Martens Appraisal’s LeAnn Adams, MAI reiterates the point that leasing gives the tenant more adaptability depending on the business’s needs. “Leasing versus buying would allow a tenant greater flex-

ibility in relocation,” Adams said, “as well as provide more options in downsizing or expanding their space needs.” The bottom line is that real estate is an extremely com- petitive business, influenced by area users and specific markets in the Wichita metropolitan area. For instance, de- mand for industrial space is particularly high in the Wichita market and is met with a low supply. Office space is in high supply with relatively stagnant demand, yet the mar- Owning • Building equity in investment • More control over costs / expenses • Any remodeling needs of suites benefits the owners vs. someone else’s property • Could buy or build larger than needed and rent excess space • Tax advantages to ownership: Property tax deductions, Mortgage interest deductions, Depreciation deduction, maintenance change deductions • Possibility to turn investment into a retirement vehicle ket continues to see new developments. There have been new developments in the multifamily market where occu- pancy rates remain high. “An interesting long-term trend has been in the Wichita market where a business owner has owner occupied a space, then sells the business and uses the leasing of the space as a retirement vehicle, an extreme positive of own- ership in those cases,” Ahern said. New and innovative developments are changing commer- cial real estate in downtown and suburban areas of the Wichita market. New demands on differing spaces and changing demands on amenities have raised the question of whether the benefits of leasing or owning have changed. Ultimately, it is up to the business to decide which route helps them grow at an ideal rate; whether that be leasing and investing that capital in other facets or purchasing to meet the current needs of a business.


Leasing • Greater ease in relocating

• More flexibility if space is outgrown or needs reduced • Landlord responsibilities with regards to building maintenance • Less risk during recessionary periods or market downturns – rent would still be due until the end of the lease term, but wouldn’t have to renew the lease if the market were to change


LeAnn Adams, MAI General Appraiser Martens Appraisal

Patrick Ahern, SIOR, CCIM VP - Office Services NAI Martens

Michael DeHass, MAI General Appraiser Martens Appraisal

Shane Pullman Commercial Advisor NAI Martens

By Shane Pullman, Commercial Advisor - NAI Martens spullman@naimartens.com | 316-262-4843


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