Own vs. lease: What's the best decision for your business?
Corporate real estate directors are constantly challenged to balance the opportunities in a dynamic capital markets environment with the operational and financial goals of their companies.
We encourage them to take an active role in collaborating with the
senior finance and operation teams within their organization to develop a
process for evaluating ownership versus leasing decisions. Some alternative
structuring opportunities exist and it is important to consider them as
well. A periodic review of the portfolio will help you keep up with current trends in the
real estate and capital markets, operating needs of the business units and the
financial position of the company. This will
result in optimal portfolio and individual property strategies.
Our paper, “A tenant’s guide to evaluating ownership versus lease decisions,” will help you better understand decision-making criteria when it comes to buying or leasing for your property or an entire portfolio. It also touches on alternative leasing structures and their potential benefits for your business.
Download your copy today, or take a look at our preview below.
- Significant cash reserves/liquidity- Investment grade profile- Interest property appreciation- Favor control of property- Decisions based on borrowing costs- Low opportunities cost for ownership- Established company with stable growth
- Lower than investment grade profile- Opposed to residual value risk- Operational/exit strategy flexibility, staffing and production volatility- Decisions based on WACC- High opportunity cost for ownership - Dynamic growth and acquisition orientation- Potential for future obsolescence
This presentation provides an overview of key buy-vs-lease decision-making criteria for commercial real estate.
Download our complete guide.