With historically low interest rates and steady economic growth, small businesses may want to consider the possibility of owning their warehouse and office space rather than leasing it. Calgary in particular seems to be one of the key cities driving the commercial ownership trend across Canada.
Business owners have always had the option to buy or lease, but the benefits of buying are now quite significant. Among them, the most important benefit is the growth of equity in their own business.
Over 10 years, the decision to own can result in as much as a million-dollar equity build. Owners also have greater control over their costs, with more flexibility in the long run. They can add value to their property by building out the space, and allow themselves, not a landlord, to reap the rewards of these investments.
Commercial condo ownership is a hot concept in Calgary, and it’s in high demand given the scarcity of functional single-tenant buildings for sale. Condo ownership can provide ownership at an attractive price point, while offering the benefits of joint management.
New condo developments offer state-of-the-art facilities that meet the needs of today’s businesses. A lot of the comparable condo product is quite dated, with limitations such as low ceiling heights, insufficient power or limited marshalling areas for loading. That’s why it’s important to have developers focus on building modern, class-A commercial space in well-located areas.
Conversely, there are other factors to consider that may limit businesses from taking on such a large investment, primarily the need for a down payment and finding access to capital. But with rising leasing costs, and Calgary’s entrepreneurial character, buying commercial warehouse space continues to be a popular choice among businesses.
According to Colliers International, there are very few large industrial condos for sale in Calgary. With low interest rates and a limited supply of quality industrial product, this makes owning property appealing for Calgary’s small business owners.
Michael Hungerford is a partner in Hungerford Properties, a Vancouver-based investment, development and management company specializing in Western Canadian residential, office, retail and industrial properties. Follow them on Twitter @hungerfordprop.
