More Developers Build Small-Business Space
Wall Street Journal: “While many larger corporations are trying to free up capital by selling real estate, many small businesses, which often lack leverage in negotiating favorable lease deals, even in this tenants’ market, are looking to own and control their own space — and profit from investing in real estate in the process. Also spurring small businesses: low interest rates; more than $4 billion is available in below-market, fixed-rate real-estate loans from the U.S. Small Business Administration that require only a 10% down payment; and tax benefits property owners get, including tax deductions for depreciation, mortgage interest, insurance and maintenance. Most small-business owners who purchase an office or industrial condo pay about the same or less in monthly mortgage payments than they would pay in rent on space of a similar size. Most buyers don’t anticipate growing out of their space anytime soon. But if they do, they’re convinced they’ll be able to sell the unit at a profit.”
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