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R&D Property: Unique Ownership Opportunity with Long-term Payback Potential
Research and development buildings are generally classified as light industrial structures, and often referred to as ‘mid-tech’ properties. More than 50% of the space in an R&D building is attributed to general office or laboratory area.
The ABC’s of R&D
R&D properties or flex space can range from small, 2,000 square foot, multi-tenant suites, to huge, campus-like compounds built to accommodate the expansive and complex activities of large, publicly traded organizations.
R&D building occupants can range from medical device manufacturers and software developers to architects, drug companies, semiconductor or microchip fabricators. The total base R&D inventory in Orange County today is approximately 69 million square feet.
How Owner/Users Can Benefit
Though mostly leased in decades past, R&D properties have more recently given smaller companies a unique investment opportunity: a chance to own the building they use for their business.
Today, ‘owner/users’ are able to buy and occupy commercial buildings of almost any size, including smaller sized condos, which typically start around 2,500 square feet. Purchasing a building instead of leasing provides owner/users many advantages, including a proven, practical way to:
- Build Equity – Gain appreciation in value that’s not possible with leasing
- Reduce Operating Costs – Interest rates are at or near historic lows, which can mean lower costs associated with buying and running an owner/user property
- Minimal Initial Investment – SBA lending/financing available with down payments as low as 10%
- Pay Down Mortgage – Reduce your loan balance with every monthly payment
- Improve Forecasting – Protect against the economic impact of annual rent increases
- Lower Tax Burden – Additional tax benefits and depreciation deductions
- Create Leverage – Use your property’s equity to help finance business machinery or equipment
- Stimulate Cash Flow – Create additional monthly revenue to aid in retirement planning
No Obligation Consultation or Needs Assessment
To learn more about purchasing or leasing commercial property in today’s market, contact one of our brokers at 949.625.6400.