I set the ball rolling years ago. “We’ll need to buy a building eventually,” I had said, almost absentmindedly. It seemed like it was forever away.
A few days into May it was time to tackle that very difficult question: How do we address our long-term need for space? With our lease expiration looming about a year off, we needed to decide if we wanted to continue leasing, buy an existing building or build something new. The math was fairly simple: If we were going to be around for another ten years then owning a building was the right financial call. Many businesses don’t realize that the amount they are paying in rent may be equal to (or even more than) a monthly payment on a mortgage, assuming a down payment is viable.
After looking around, the BHQ team concluded there wasn’t really an existing structure that was suitable for our needs (at least not something cost effective). The most logical way to proceed was to buy land and build. After conversations with numerous builders an alluring Pleasant Grove project presented itself. The BHQ team felt that it would meet our needs and then some. With a larger subdivided structure we could potentially even lease out some of our unused space allowing us to subsidize our building payments. Thus began our negotiations….
At first things didn’t go smoothly. The upfront costs were onerous and the timeline was too hurried. At one point we even decided to back off completely. Part of me was relived. Even though I was the one that had pushed for building ownership in the past, I freely admit that I became one of the partners that felt leery at the prospect of owning a building and the financial obligations it brought. I felt that renting, while not as generous to our asset sheet, gave us more flexibility and, in the short-term, more on-hand cash. However, a new offer that everyone one felt good about was presented. My position was swayed and we decided to move forward with the project. Since the papers are now signed and construction has begun I think it’s safe to announce that BHQ is moving to PG in 2018.
I’m pretty excited about the new building. We’ll build it to suit our ever expanding needs and we should have plenty of room for the foreseeable future. It’s also an opportunity for us to venture into the world of commercial real estate rental. There’s still a lot of work left to do, obviously, but I believe this was the right call and it will be worth the effort. More to come!
Update: October 1, 2017:
Update: November 9, 2017: