Why I Didn’t Buy a Commercial BuildingBack to home
I recently spoke with a friend who happens to be an entrepreneur. One of his businesses is in commercial real estate. We talked about my journey with CCAW and how my real estate needs evolved. When I started CCAW, it was a small desk in the corner of my apartment. I worked from home for about three years. When I expanded the team, I sublet space from a much larger company for a few years. Next we moved to coworking space at Atlanta Tech Village.
My friend thought about all the rent I’d paid over the years and couldn’t understand why I hadn’t bought a building. In fact, I considered purchasing a commercial space and drove around many times looking for the perfect place. Each time I decided against pulling the trigger. Here’s some my reasoning:
- Community – We had a very small team, so creating a sense of community was difficult. Subleased and coworking space provided instant community, which was a huge plus in recruiting. Learning events, socials, friend groups, etc. boosted team morale. People liked coming to work.
- Flexibility – I couldn’t predict the future. Being in a space that could accommodate change was appealing. We grew and contracted many times over the years. Not owning space helped minimize the stress of those periods.
- Location – I couldn’t afford a building in a nice part of town. Subleasing and coworking allowed CCAW to be located in a desirable, walkable area. This was a huge plus during recruiting and visits from vendors.
- Amenities – Being in a space used by many companies allowed for amenities we could never have afforded if I had bought a building. A gym, a rooftop deck: density made them possible.
- Facilities – We didn’t have to worry about maintenance or upkeep because building management handled everything. Owning a space would have introduced a set of issues that I wasn’t interested in.
- Serendipity – Working alongside other companies made regular chance encounters possible. This may seem insignificant, but some of our luckiest breaks came from those encounters. Owning would have eliminated any chance of such luck.
- Founder relationships – I built solid relationships with other founders who worked in the same space, often through random interactions. Over the years, these relationships have helped me navigate challenging times and have turned into friendships. Owning would have made this many times more difficult.
Could I have paid a lot less per square foot by owning? Yup. Could I have built equity in a real estate asset? Absolutely. Looking back, do I wish I’d bought? Not a chance.
My criteria weren’t based on cost. They were based on value. I regularly asked myself if the value CCAW received from not owning exceeded the cost. The answer was always yes. In the end, the way most things are priced ensures that you get what you pay for.
Next time you’re considering a purchase, ask yourself if the value will exceed the cost.