Over the long term, New York City real estate values have appreciated greatly. Unfortunately, business owners who lease their commercial spaces have not benefited from this valuation rise.
Business owners who anticipate stability in terms of the size and scope of their operations could profit from outright ownership of their commercial space. Whether they seek to purchase commercial cooperatives shares or a condominium, buying commercial real estate can offer stability, ease and financial incentives that aren’t available to commercial property lessees.
Commercial Cooperatives & Condominiums
Commercial cooperatives and condominiums are fairly rare; they’re only really available for sale in large, metropolitan cities such as Chicago, London and New York. Less than 5 percent of the Manhattan commercial real estate market consists of commercial cooperative and condominium properties.
Commercial coops and condominiums in Manhattan vary in size from as small as 500 square feet to as large as several contiguous full floor spaces. While buying Manhattan office space might not be a plausible option for most business owners who would rather invest available resources for business development, owners who foresee long term occupancy of the same space might want to explore the option of purchasing a commercial space in New York City.
The long term financial incentives are far greater for commercial property co-op shareholders and condominium owners than commercial property lessees. Owners of commercial real estate benefit not only from certain tax write offs for interest and depreciation, but also from long term appreciation. A property owner is not subject to rent increases from a landlord, and also builds substantial equity as the mortgage payments are made. Lessees, while enjoying the option of flexibility if he or she chooses to relocate at the end of a lease, do not have the long term security of property ownership, which, in today’s market, is one of the more stable investments a business owner can make.