The vast majority of corporations require sizable properties to conduct their activities. Most of them are going to handle the issue of obtaining real estate either by becoming tenants or property owners. It's important to appreciate the legal implications of both arrangements before you choose one. Let's take a look at how a corporate real estate lawyer would approach the problem.
One major argument for being a tenant is the overall flexibility that it offers. This is especially useful if your corporation is still in the startup or growth phase. There's a lot to be said for being able to put one property in the rearview mirror and move on to another one.
An obvious downside is that a landlord will have some say in how you use the location. However, it's not uncommon for tenants and landlords to enter into agreements that permit extensive remodeling of the location. Similarly, a corporate real estate attorney can draw up a contract that will assign responsibility for handling certain costs, including insurance, utilities, taxes, and maintenance.
A major downside is that the landlord might sell the property before you plan to move. Notably, most buyers will be thrilled to learn a paying tenant is present, but that's not a guarantee.
The second approach is to purchase the land and the building outright. You'll still face some control issues in jurisdictions that aggressively enforce regulations so it won't be a magical opportunity to do anything and everything you want. Environmental, accessibility, and code enforcement issues will just become your problems.
From a legal viewpoint, the main benefit of ownership is cutting out the landlord's say in what you're doing. Also, if you plan to settle into a location for a few decades, this will allow you to tailor the structure to your corporate brand. You can set up a vanity address that corresponds with your brand, too.
Why Not Both?
Depending on what your company's corporate structure is, you might be able to set up ownership of the property within a holding company. Your main operation would lease the property from the other business. That property-holding company might be set up as a trust or a real estate group, and it would have to be independently governed.
Likewise, this structure would make it easier to lease unused space. If you don't want your company to act as a landlord, this can free you up to deal with your business while the real estate side of the operation does its thing.
For more information on the pros and cons of corporate real estate tenancy and ownership, talk to a corporate real estate lawyer near you.
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