Michael Bull: Bullish On Owning

Michael Bull, Bull Realty. Twitter: @BullRealty

In a kind of perfect storm of commercial real estate media, this week found Michael Bull radio and web host of the nationally syndicated Commercial Real Estate Show a guest on NAR’s Commercial Connections Podcast hosted by Alex Ruggieri.  The topic: market conditions for office and industrial are pointing users more than ever toward buying and away from leasing.  The quick takeaways:

Buying Beats Rent Today Because…

  • Low replacement cost.  Especially in suburban office markets, properties priced at $50/sq. ft. below replacement cost are widely available
  • Low interest rates.  From federal programs providing 10% down terms and conventional loans with lockable rates, the credit picture is rosy, says Bull.
  • Also helping is the classic love lenders have for owner-occupiers.  Problem loans in CRE were usually to parties who had nothing to do with the business.  Beyond that, banks are angling for deposit and services business, and an owner-operator is more likely to be in the need for banking services.
  • Owners can borrow on equity down the road
  • Bull mentions that leases in some cases don’t look as attractive as they once might have.  Recent changes in lease accounting rules from FASB means that leases are no longer off a prospective renter’s balance sheet.  Buyers don’t face these new rules changes
  • Controlling occupation costs, the business environment and creating a great investment property are all common goals in buying
  • Bull tells a great story about education magnate Stanley Kaplan and listening to the business advice of accountants

Listen to the full Commercial Connections Podcast here

 

30. September 2013 by Wayne Grohl
Categories: Industrial, office | 8 comments

Comments (8)

  1. Great talking points here, thank you!

  2. How we come out of the government shutdown is critical. If we see a prolonged battle over the debt ceiling we could lose everything we gained in the last year.

  3. Good comments on the mortgage situation for owner operators.

  4. I agree with all the positive aspects of owning vs. renting. I’m trying to buy commercial space right now for my real estate company – but am finding the process somewhat challenging in negotiating with the owners.

  5. Interesting idea on how owners can borrow on future equity. Thanks

  6. Owning vs. renting is almost always the best choice — and now that prices are so attractive, it’s the route to go, provided you have the cash or the ability to get financed. Lenders are still giving the small to medium-sized companies a very tough time…

  7. Being able to borrow against equity in the future & lower interest rates make buying so much more favorable to clients.

  8. Pingback: Why Companies Should Buy Instead of Rent | Playa del Carmen Real Estate Sale Mexico

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