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Multi Tenant vs Owner Occupied


Multi-tenant commercial office buildings are host to unique relationships between ownership, management, and tenants. A typical owner-occupied property benefits from a streamlined process of conceptualizing, implementing, and continuously managing operational changes. Multi-tenant buildings, on the other hand, must proceed with operational improvements with careful consideration of the various parties involved

A multi-tenant property has lower probability of defaults than owner occupied properties. The diversification of leases helps offset some of the risk of having a strong owner operator of the property. The extent to which this is true is not only dependent on the average credit of the multi-tenant property compared to the single owner-occupier, but also the lease structure. In fact, the lease structure composes approximately 20% of the risk in a multi-tenant property. Staggered leases present less risk than leases that mature within 18 months of each other.

To determine if Owner Occupied Commercial Real Estate is the right choice for your business, consider the following questions:

• Do my short term goals include rapid expansion?
• When is my commercial lease coming up for renewal?
• Is it important for my company to be in control of long term occupancy costs?
• Will the real estate return on capital enhance my business return on capital?

The owner occupied property allows for full control of your occupancy costs including who will be a tenant in our building, the lease terms, expansions and parking rights, building maintenance decisions and absolute control over building operations and management