Benefits and risks of owning versus leasing

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Reference no: EM133642485

Question

You are the Head of Real Estate at a company and are presented with two opportunities to house its current operations. You have engaged a space-planner who has concluded that the company currently needs 65,000 SF; however, the company continues to grow. The CFO has tasked you to analyze the two following options with a focus on achieving no less than a 25% pre-tax IRR benefit when compared to a given lease structure. You engage a brokerage firm to search for potential sites, all of which are across the street from one another. The following opportunities are available for your consideration (Tenant has to fully build out its space in both scenarios- No Tenant Improvements from Landlord). Which Option would you pick? What are some of the benefits/risks of owning versus leasing?

Reference no: EM133642485

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