Resource center
Guides for Companies Buying Their Own Building
Plain-English guides for owner-users: whether to buy, how to finance it, what to check and how to close.
Buying for your own company is a different decision.
An investor buys for the return. A company buying its own building also has to run a business in it, for years, with capital it could have used elsewhere. These guides cover the decision, the financing, the diligence and the deal from the owner-user side.
Start here
Buying a building, in plain English
Whether buying makes sense, the numbers that matter and how a purchase works.
Should you buy?
Buying a Building With Space to Lease Out
Tenants can help pay for the building and hold your future expansion space. They also bring a second job, and they can change how your loan works.
Read the guide →How to Buy a Commercial Building, Step by Step
A commercial purchase follows a fairly predictable order, and most costly mistakes come from doing a step too late or skipping it because the deal felt close.
Read the guide →Pros and Cons of Owning Your Business Property
Ownership solves real problems for some companies. It also creates a few that do not show up until the business changes.
Read the guide →Should Your Business Buy or Lease Its Building?
The answer depends less on rent versus mortgage than on how long you will stay, how much cash you can tie up, and how much of a building you want to run.
Read the guide →Leaving a Lease to Buy a Building
Closing on a building does not end your obligations to your landlord, so the lease exit needs as much planning as the purchase.
Read the guide →What Is Owner-Occupied Commercial Real Estate?
The label sounds like a technicality, but it changes who the lender underwrites, which loan programs are open to you, and how you should judge a building.
Read the guide →When Is Your Company Ready to Buy a Building?
Readiness has little to do with being tired of paying rent. It comes down to four things you can test before you look at a single property.
Read the guide →The numbers, in plain English
What Is a Cap Rate, and Does It Matter to an Owner-User?
It is the number investors quote constantly. If you are buying a building to occupy, you need to understand it, but you should not let it make the decision.
Read the guide →What Is a Debt Service Coverage Ratio?
It is the number that often decides how much a lender will advance, and for an owner-user it says more about your company than about your building.
Read the guide →How Is Commercial Property Valued?
An appraiser's number decides how much a lender will advance, so an owner-user should understand how that number is built.
Read the guide →Lease vs Buy: How to Run the Math
A monthly payment comparison answers the wrong question. The useful answer comes from total cost over the years you expect to stay.
Read the guide →The True Cost of Owning a Commercial Building
The mortgage is the cost you can see. The rest arrives in tax bills, roof reports and hours your team no longer spends on its real work.
Read the guide →What Is Net Operating Income?
NOI measures what a building earns on its own, before the loan and the tax return get involved. That makes it useful, and also easy to misread.
Read the guide →Compare and plan
Financing and due diligence
For companies preparing to buy: loan options, what to inspect, the contract and the tax questions for your CPA.
Financing the purchase
Commercial Mortgage Basics for Business Owners
A commercial mortgage is not a home loan with larger numbers. It often ends long before it is paid off, and the terms around the rate can matter as much as the rate.
Read the guide →How Much Down Payment Do You Need for a Commercial Building?
The percentage is only part of the answer. What you need is the total cash to close and enough left over to keep running the company.
Read the guide →SBA 504 Loans for Buying a Building
The program is built for small businesses buying fixed assets, and its structure, occupancy test and documentation differ from an ordinary bank loan.
Read the guide →SBA 504 vs 7(a) vs a Conventional Loan
Each of the three answers a different need, so the sensible comparison starts with your project and your company, not with a headline rate.
Read the guide →SBA 7(a) Loans for Commercial Real Estate
It is SBA's general-purpose loan, which makes it useful when a purchase comes with other needs, but its limit, cost and rate terms deserve a close read.
Read the guide →Due diligence
Commercial Property Due Diligence Checklist
Due diligence is the window in which you can still change the price or walk away, so it should be organized before the clock starts.
Read the guide →What Is a Phase I Environmental Site Assessment?
The report can look routine, yet its timing and scope affect a federal liability protection that depends on work done before you buy.
Read the guide →What Is a Property Condition Assessment?
It tells you what the roof, the mechanical systems and the rest of the building are likely to cost you, while you can still act on the answer.
Read the guide →The Commercial Purchase Agreement: Terms to Negotiate
The letter of intent sets the price. The purchase agreement decides who carries the risk when something goes wrong before closing and after it.
Read the guide →Title and Survey: What a Commercial Buyer Should Check
Two documents, read side by side, tell you what you are really buying and what other people can do on it after you own it.
Read the guide →Tax and ownership structure
What Is a Cost Segregation Study?
It is an engineering and tax analysis that asks which parts of your purchase price are really the 39-year building, and which are something else.
Read the guide →Depreciation When Your Company Owns Its Building
Owning your building replaces a rent deduction with several others. Depreciation is the largest non-cash one, and the land under the building does not qualify.
Read the guide →Should You Hold Your Building in a Separate Company?
Keeping the building and the business in separate companies is a common setup, but it comes with paperwork, tax rules and limits on the protection it offers.
Read the guide →Can You Use a 1031 Exchange to Buy Your Business Property?
An exchange can move tax-deferred value into the building your company will occupy, but only if you have qualifying real estate to give up and you meet deadlines that leave little room.
Read the guide →Choose and act
Making the deal
Ready to act? How to search, make an offer, choose representation and get to closing.
Making the deal
Buying Commercial Property in Chicago: What Owner-Users Should Know
The building decision is the same anywhere. In Chicago, the two local items that most often change the numbers are how Cook County taxes the property and what the transfer costs at closing.
Read the guide →Do You Need a Buyer's Broker for Commercial Property?
The listing broker represents the seller. The real question is whether your company wants someone whose duties run to you when price and terms get negotiated.
Read the guide →How to Make an Offer on a Commercial Building
The first document is usually short, but the positions you take in it are hard to walk back once the lawyers start drafting.
Read the guide →Questions
About this resource center
Who is this resource center for?
Owners and finance leaders of companies considering buying the building they will operate from, including medical and dental practices.
Where should I start?
If you are still deciding, begin with the lease-or-buy guides. If you have decided to buy, go to financing and due diligence.
Whom does Tenant Advisory Group represent?
The buyer. TAG represents the company buying the building, not the seller.
Is this legal or tax advice?
No. The guides explain concepts and point to their sources so you can have a better conversation with your attorney, CPA and lender, who should review any purchase before you commit.
Thinking about buying your building?
Tell us what your company needs. We represent buyers in Chicago and nationwide.