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Business Location
Finding the Right Space
With Florida property taxes and insurance costs soaring, entrepreneurs have a lot to think about when choosing a business location. Many coastal businesses that own their buildings are facing tax and insurance costs that are double or triple what they paid only a few years ago. But businesses that lease space don't have it easy either. As of mid- 2006, office lease rates around the state were up from the beginning of the year.
To help decide where to locate a business, consider a few factors.
? Buy or lease. "More often than not, some of our tenants still look at moving to their own facility," says Adam Lutz, a principal with Lutz Real Estate Investments, owner of the 20-building Tri-County Business Park in northwest Hillsborough County. But often the tenants become disillusioned with buying, he says, when they look at the overall cost of ownership, including debt service, maintenance, property taxes and insurance. Still, if the monthly cost of ownership is close to the monthly cost of leasing, buying might be a better option given potential tax benefits and possible appreciation.
? Consider your profile in the community. When Pat Antonetti, senior vice president of Fort Pitt Capital Group in Naples, began looking for a new location, he wanted a high-profile site that would attract a wealthy clientele for his Pittsburgh-based money management firm. From the start, Antonetti says that buying space wasn't in the cards for the type of location he wanted. "The issue was all about supply. The good space was already taken in Naples," he says.
After looking for more than six months, Antonetti leased almost 2,000 square feet on the first floor of the Sun- Trust building in downtown Naples. The space had been the sales office of the high-profile WCI Communities' Pelican Bay residential development. The office has a separate entrance and is visible from U.S. 41.
? Analyze your situation. If the business is growing rapidly, leasing with the option to add space later might be a better choice than buying. There are tales in the 1990s of fast-growing businesses buying bigger buildings than they needed and then selling them at a loss when the business's direction changed.
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