Black and Buono Blog

...by Anthony Buono

If you are looking to buy a home in Massachusetts, there are certainly some great deals out there. But businesses, can also capitalize on real estate deals during depressed markets. There are many advantages and opportunities for businesses in financing, leasing and ownership in today’s real estate market.

Renegotiate Existing of Future Lease
Businesses are often able to renegotiate more attractive lease terms. Businesses who have paid rent consistently and on time can often negotiate with landlords for better lease terms. Particularly in markets where landlords are having difficulty finding reliable tenants, and where there is a lot of commercial space available. Businesses that have a proven track record can be rewarded with lower rents and better benefits and concessions.

Lease or Own
A Depressed real estate market can help businesses that have been leasing properties. Business owners can take advantage of  market conditions and become property owners. As a business owner, you may be able to take advantage of the lower prices for commercial real estate and businesses can often secure loans with as little as 10% down. Owning real estate as a business asset can provide certain financial advantages, including financing options and tax incentives.

Commercial Leases
A percentage rent lease is where businesses share profits with the landlord. Generally, a base rent is set, and a percentage of the monthly or annual gross sales are added to the base. For example, a property may have a base rent of $25 per square foot, plus 5% of sales over $200 per square foot. Everyone benefits with a percentage rent lease; when sales are up, more rent is paid, and during slower periods, the rent is reduced. This helps businesses in new locations and helps them out in slow times without the burden of high rent. Landlords benefit as well, they can attract and keep tenants and receive greater returns as the business grows.

Loan Incentives
The U.S. SBA Loan Program is a long-term financing option designed to promote economic development within communities. The program provides businesses (with specific net worth and net income) with long-term, fixed-rate financing. The loans can be used to purchase land and existing buildings, or to finance the construction of new facilities.

Businesses can and should take advantage of real estate opportunities through special financing options, economic incentives and negotiating for more favorable lease terms. Contact Black and Buono for assistance for your commercial real estate needs in Massachusetts.

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