Real estate decision for small business

[Robert Siverd]

This is a situation that is not typically seen on BP.  I am a partner in a small business.  We have three locations currently and we rent all three spaces.  We are considering opening a fourth location by constructing a building.  We do not plan to have any tenants in the building other than our own company.  We would plan to take our current main location which is the largest and downsize in the same business park.  The building that we have built would become our new main office.  The new building budget to complete it is about 2.5M.  We have been all set to move forward with this plan until today when our current landlord brought up the possibility of us moving to another building in the same office park as our current main office.  We would be able to rent that location for about 10k a month.  This would cause us to not build the new building and only put a satellite office where we were going to build the new building.

There are two scenarios that we see.

1. Build new building for 2.5M that we own and open a smaller office where our current main location is that would cost about 2k a month.  The building would cost about 17k a month for 25 years.

2. Rent a small space in the area where we currently plan to build our building.  That rent would be 2k a month.  We would then rent a new space in the same park as our current main office for about 10k a month and have that be our main office.

Assuming both situations work just as well for the company as far as patient treatment and meet all other needs, which would be the best move financially moving forward for my partner and I?  I know that there are many things to consider.  I am looking for feedback from anyone that thinks they can help.  I invest in residential real estate as well and know that is what BP is for, but I thought there may be members with expertise to weigh in on this issue as well.

I look forward to the discussion and if a moderator feels that this discussion would fit better in another area of the forums, please feel free to move it.