Hannah Skidmore, MBA
Lease a Space or Buy a Facility
Updated: Mar 27
Should I lease a space or buy a facility
Have you ever wondered whether it is a better idea to lease a space or buy a facility for your animal care needs? Our clients often ask the DLI experts this question. The short answer is that there is not a "one size fits all" option that's true of all animal shelters, vet clinics, or animal hospitals. Below are a few considerations for decision-makers looking to lease a space or buy a facility.
Engineered Systems Required in Animal Care Facility
When working with clients interested in leasing a space, we almost never see the engineered systems required for an effective animal care facility. Standard mechanical, electrical, plumbing, and noise control systems of typical buildings are sub-par for the requirements for animal care facilities.
For instance, the mechanical HVAC units installed in an existing building may be too small for animal care applications.
Or the electrical service to the building may not as robust as it needs to be for all of the animal care equipment that clients may install in the facility.
Or, even, the existing building may have minimal plumbing or no sub-slab plumbing at all.
When the DLI experts work with clients, we ensure that the building designs allow for the appropriate animal care needs. When buying a building, clients can make any of the improvements they'd like. However, if leasing a space, clients must keep their lease in mind. It's important to consider the actually lease and if the landlord permits the necessary improvements needed to the space for the animal shelters, vet clinics, or animal hospitals.
Length of Stay in the Space
We often invite our clients who are considering a lease to consider their length of stay. Before committing to a lease, we ask them to consider if the necessary improvements are worth if for the length of the lease. Sometimes our clients realize that by the time they pay for the required improvements in the space, there lease is up, and they've invested money improving the landlord's property.
For example, if the landlord will only allow a lease of five years
An organization must determine if the improvements they must make in the space will be paid off by the lease's end and if it is financially smart for their business to do so.
An organization must determine if they want the landlord to be the beneficiary of their financial investment in the property.
With these considerations in my mind, our DLI experts often recommend getting as long of a lease as possible.
In contrast, when a client is buying a facility the length of stay is as long, or short, as the organization would like. When buying a facility, clients don't have to worry about being removed from the space. Further, any facility improvements and financial improvements remain within the organization.
Cost is critical
Cost is a very important piece of deciding whether to lease a space or buy a facility. Leasing often requires less upfront costs in terms of building acquisition. Most frequently, our clients simply start paying their rent and investing in required improvement.
When buying an existing space, clients must factor in the purchase as well as necessary improvements the animal care facility requires. Regardless, determining the appropriate budget for your animal shelter, vet clinic, or animal hospital is key.
We advise our clients to also determine the level of maintenance responsibility they would like to have with the facility.
Leasing a space requires the landlord to handle a lot of the infrastructure maintenance requirements of the building in most cases.
Buying requires the building owner to take on the responsibility of maintaining the building and handling any issues that may arise.
Ultimately, each of our clients must select the appropriate option. There are advantages and disadvantages to buying and leasing existing properties. The DLI engineering and design experts are here to work with clients to decide whether leasing or buying is the answer for their project.
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