When it comes to expanding or launching a business, one of the pivotal decisions to make is whether to buy an existing commercial property or build a new one from scratch. Both options have their own set of advantages and considerations. Below, we explore the key factors to help you make the right choice for your business.


Advantages of Buying

  • Speed to Occupy: Purchasing an existing property is typically faster, avoiding construction delays, extensive permit approvals, and zoning setbacks. For businesses that need to get up and running quickly, this can save valuable time.
  • Lower Costs and Risks: While buying may involve renovation expenses, it generally doesn’t require large-scale costs like developing land or hiring multiple contractors. Furthermore, the overall costs and risks associated with buying and renovating are generally more predictable compared to new construction.
  • Features and Location: Buying might give access to desirable locations with unique or historic features that would be expensive to replicate. Additionally, rare finds (like former food establishments with drive-thrus) can provide structures that would cost significantly more to build from scratch.

Other Considerations When Buying

  • Limited Customization: It may be difficult to find a ready-made property perfectly suited to your business. Additionally, your options for adjusting the design or layout may be constrained, which could impact future expansion.
  • Hidden Costs: Renovation expenses, zoning changes, and repair requirements can quickly add up, potentially pushing the total spending beyond initial expectations. 

Advantages of Building

  • Unmatched Customization: Building provides full control over the property design, ensuring it meets your specific needs now and in the future. A custom-built space allows your business to design its layout and functionality from scratch, ideal for operations with specific requirements such as manufacturing facilities or high-tech offices.
  • Future Expansion: Purchasing extra land during construction opens the door for scaling up operations later. Custom construction provides the flexibility to buy additional land or incorporate expansion into the design. This ensures the property can meet your evolving needs as your business grows.
  • Energy Efficiency: Modern building standards make it easier to create energy-efficient spaces, ultimately reducing future utility costs. Additionally, incorporating green building practices in new construction may offer tax benefits and energy-efficiency incentives.

Other Considerations When Building

  • Time Intensive: From design and zoning approvals to overall construction, building from scratch can take months (or longer) to complete. Additionally, weather, supply chain disruptions, and zoning approvals can slow down your timeline further.
  • Higher Upfront Costs: Land acquisition, architectural fees, and development costs can make building significantly more expensive initially.

Which Should You Choose?

Evaluate your business’s current and future needs. If time-to-market is critical or customization isn’t a priority, buying might be your best bet. However, if your business requires a tailored facility or you’re planning extensive future expansion, building could provide better long-term value. 

Whichever path you choose, thorough cost analysis and planning can help ensure the chosen option aligns with your business goals.

Want assistance? Our Business Bankers are ready to help! Contact a Business Banker at www.fnc.bank/meet-our-lenders/#business