Lease or Buy - Two great options! 

When faced with any major business decision it is always smart to look at both sides of the argument, office space is not different.

Buying Office Space

	Long Term Stability
	Fixed Costs: Locking in the commercial mortgage long term gives you clear fixed costs.
	Tax Deduction: The costs of ownership of a commercial space can provide expense deductions in the form of mortgage interest, property taxes and others. Depreciation can also be taken (consult tax professional).
	Equity Accumulation: Occurs through reduction of mortgage debt but also (hopefully) through property appreciation
	Additional Income: Owning your space can offer the advantage of leasing part or all of the space for additional income.
	Lack of Flexibility: Unknown future growth can cause issues with space constraints, although selling remains an option.
	Upfront Costs: Property improvements along with the costs associated with obtaining the loan.
	Upfit: Adds value to building and increases equity and depreciation amounts.

Leasing

	Flexibility: With 3 or 5 year terms owners can adjust space and location needs periodically.
	Variable Costs: Annual rent increases, raising market rates when your lease expires.
	Low Upfront Costs: Usually lower upfit costs and no mortgage to obtain keep the cash outlay to a minimum.
	Upfit: Upfits costs may be lost when relocating and upfit may not be moveable.

Example
Assuming a business need of 2,500 sq.ft of office space.

Purchase
2,500 sq.ft
$190 per sq.ft    purchase
$30 per sq.ft      upfit
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$550,000           total cost of office space

10% down= $55,000 upfront cost

$495,000 on 20 year mortgage 8%=
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TOTAL Monthly         $4,295
Total down= $55,000

Lease
2,500 sq.ft
$25 per sq.ft lease
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unknown cost of upfit

$62,500 lease per year

Monthly lease rate=         $5,208
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TOTAL Monthly         $5,208
Total Down= unknown