§ 19.09 Owning vs. Leasing—Factors to Consider

• Jurisdiction: United States
• Publication year: 2022

§ 19.09 Owning vs. Leasing—Factors to Consider

It is important for the tenant to ensure a careful analysis and clear understanding of what exactly it is undertaking in terms of risks and costs. For some companies that are assuming most of the risks and costs of owning real estate and now have to account leases as balance sheet assets, it might be more sensible to own rather than lease. Of course, other factors such as cash flow, credit rating, and flexibility requirements must be considered in the analysis. Even if ownership is not an option, corporate real estate professionals should negotiate carefully around the various lease expenses that tenants are obliged to pay. Tenants should also scrutinize each operating expense reconciliation...