We bought our office space! But why did we do it?
Running a business

We bought our office space! But why did we do it?

Buying decisions can sometimes be a mixed bag. From time to time, business clients ask us whether it’s better to buy a car versus leasing a car. While the answer is often based on an ROI and tax savings, there are often other non-business factors as well that lean to, for example, how emotionally you’re tied to a certain car.


How about buying your office space instead of leasing it? Now that we’re emerging from the pandemic, employees are returning to their offices, even if it’s on a hybrid schedule. Over the years, I’ve found that most clients who work in traditional office spaces in Charlotte’s Center City, for example, pay their rent each month and really don’t think what it would be like to own their space.


On the other hand, our clients in manufacturing and even some larger nonprofit associations do think about owning their facilities or offices, mostly because they are already in a building rather than an office suite.


How about the hundreds of thousands of other kinds of businesses, including managed services and professional services firms such as Certum Solutions? This leads me to telling you that we just bought the building we’ve been leasing.


We originally leased our office building because I am a bit contract/commitment phobic, and with a lot of us working from home—and my working from home for years—I wasn't sure we would want to be responsible for an office long term, and didn't want to have to worry about trying to sell it. Additionally, a lot of the loans on the market have pre-payment penalties, so there was that if we moved as well.


However, the benefits to ownership were promising. After we leased for about two years, my banker let me know of a women or minority-owned business grant offered by Bank by America, along with some purchase promotions for commercial real estate. Thanks to our long-term relationship with BOA, we felt certain we could qualify for the grant. I've been in the office long enough to be comfortable, and was more open to taking on the responsibility of an investment this size.


We were able to secure an SBA 7(a) loan, and the bank helped us with a very good rate. While it does have a three-year prepayment penalty, we have been here long enough to feel comfortable, and are happy and excited to stop paying rent and start building equity.


We did look at other properties, but our landlady mentioned she was interested in selling, so it worked out for us: no moving, we had time to acclimate and settle in, and now we can go in with open eyes.


Certum is open Monday-Friday, 9 am – 4 pm, and online on Fridays online only. While we don't get a ton of client visits yet, as we just started having regular manned hours, we have gotten to network with our neighbors, and when we need to meet up, we have a quiet location to sit and work. Plus, we are investing in the real estate market, which is exciting.


I feel like we got to take advantage of the best of both worlds. I wish I would have purchased when rates were lower, but I still feel like we got a great deal, and we’re working on a plan to pay off the loan early and will avoid the pre-payment penalty. We kept our purchase modest and well within something we could easily budget for, given the slight seasonality of our business.


So back to the original question: Should you lease your office space or buy it? The answer is the same as leasing or buying a car. Are you more comfortable with a long-term investment that could be tax-friendly, build equity, and be a place for community? Or do you rest easy with something more short-term that not necessarily be less money, but something you could get out of if you’re growing and need more space or want to move in the next few years?


The answer is ultimately up to you, of course, and there are dozens of scenarios to consider. Bottom line: Do what’s good for you and your business.


Come see us!


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