Why do many large companies lease as opposed to buying their own building? Why do some buy their own building only to have a company like The Reinhart Group lease those same buildings back to them?
One reason is capital.
Most industrial companies are not in the business of owning buildings. They are in the trucking, pipe, oil, shipping, or manufacturing business. This means they can get an ROI ten times higher by investing available capital in trucks or other equipment rather than investing in ownership of a building, therefore many companies opt to lease.
Another reason is maintenance.
Having an outside party handle property upkeep is easier than doing it in house. Just imagine what would happen to a facility with no heat in the dead of winter. Serious production issues would result. With a property manager implementing a preventative maintenance plan, worry about plumbing, batteries, or a broken thermostat are eliminated. A systematic plan ensures routine battery changes, for instance, are done at regular intervals.
Here are some things to consider when leasing a steel building:
- Opportunity cost. It is important for a property management and development company to understand your business before designing a building. Design efficiencies ensure more work with less people. Therefore, if a building is properly laid out and set up for a company’s specific needs, savings can be huge.
- Generations of change. Looking back at the 50’s, there was a “garage mentality”. Anything would work—a dirt floor, partial pavement, or whatever was available. You could simply hand draw a sign and throw it on the front of a building. People and legislators were okay with that. Today however, we are noticing even guys in the oil field are looking for an inviting front entrance at their facility. Management and labourers alike want to drive up to a building and take pride in where they work. This has resulted in aesthetics becoming increasingly important.
- Things that are going to be in your yard. For years, people did dirt work without engineering. Today, we know to ask specific questions when it comes to keeping the grounds in good condition on a long term basis. For Example: What will be parked in the yard? How much will the equipment weigh?
The answers to these questions are important because they dictate soil compaction. They also help in choosing the type of gravel and/or soil cement needed. When considering a lease, it is important to be aware of the big picture. Design should translate into efficiencies, aesthetics should appeal to today’s workers, and engineering should account for the impact heavy duty structures and equipment will have on the yard over the long term. Remember, a well designed space at the outset will improve your bottom line with savings of time and money in the future.