Your business needs space. Maybe you are opening your first location, outgrowing your current building, or approaching the end of a lease.
You start looking, and a question comes up: Should you lease your next space or buy it?
Both can be good decisions. Both can also tie your business to a property that no longer works.
The answer depends on your cash, growth plans, timeline, and the properties available. For business owners in Snohomish County and North King County, here is how I suggest approaching the decision.
The Pros of Leasing
You preserve capital. Leasing generally requires less cash upfront than purchasing. That leaves more money available for equipment, inventory, employees, and the unexpected expenses that come with running a business.
You may still need deposits and improvements, but you are usually avoiding a substantial down payment.
You have more flexibility. If you are unsure how much space you will need in five years, leasing can give you time to figure that out. When the lease ends, you can evaluate whether to stay, expand, or relocate.
That flexibility depends on the term you negotiate. A long lease with a personal guarantee is still a significant commitment.
You may have more locations to choose from. A space that fits your business may be available for lease even though the owner has no interest in selling.
Some building responsibilities may stay with the landlord. Depending on the lease, the landlord may handle major repairs or contribute toward improvements. Read those provisions carefully. Commercial leases can also place substantial responsibilities on the tenant.
The Cons of Leasing
Your future at the property depends on your agreement. Without a renewal option, you cannot assume the landlord will offer another term. Even with an option, notice deadlines and other conditions matter.
For a business with expensive improvements or customers tied to its location, a forced move can be costly.
Rent increases need to be part of your budget. Many leases include scheduled increases during the term. At renewal, your rent may also be adjusted to market conditions.
The advertised rent may be only part of the bill. Under a triple net, or NNN, lease, tenants typically pay a share of property taxes, insurance, and common area maintenance in addition to base rent.
Those costs can change. Before signing, review the expense history, budget, reconciliation process, and responsibility for major repairs.
You are improving someone else’s property. Money spent on a specialized layout may help your business, but you may recover little of it when you leave. Alterations, signage, and changes in use may also require landlord approval.
The Pros of Buying
You gain greater control over your location. Ownership removes the uncertainty of a landlord deciding whether to renew your lease. You also have more freedom to improve the property, subject to zoning, permits, financing restrictions, and any association rules.
That control can be valuable when relocating would disrupt your operation.
You can build equity. Principal payments reduce your loan balance. Appreciation may add value over time, although property values can also fall.
You may eventually sell the business while keeping the building as a rental property, giving you another option for future income.
Other tenants may help offset costs. If you purchase more space than you need, renting the remaining area can help cover expenses. Existing leases and any lender occupancy requirements need to fit your plans.
Business ownership can open financing options. Programs such as SBA 504 financing may be available to qualifying businesses purchasing property for their operations. A qualified lender can explain eligibility and compare available programs.
Buying does not necessarily mean you can move in sooner. Closing, existing tenants, permits, and improvements all affect occupancy timing.
The Cons of Buying
Your cash becomes tied up in real estate. The down payment is only the beginning. Closing costs, inspections, improvements, and reserves require additional money.
That capital might produce a better return inside your business. Buying a building should not leave a healthy company short of operating cash.
Financing terms affect the outcome. Interest rates, fees, amortization, and the loan’s maturity date all matter. A payment calculated over 25 years does not necessarily mean you have 25 years before the balance comes due.
Seller financing may offer another path when available, but its terms still need careful review.
You own the repair bills. Roofs, pavement, heating systems, and other building components eventually need attention. Ownership gives you more control over those decisions, along with responsibility for funding them.
You may become a landlord. Tenant income comes with vacancy risk, repairs, collections, and management. Consider whether you want those responsibilities alongside your existing business.
Changing course is harder. If you outgrow the property or need to relocate, selling or leasing it takes time and money.
A Local Example: Compare More Than Rent and a Mortgage
Market information reviewed October 30, 2026.
Consider a hypothetical business needing 10,000 square feet of industrial space.
For local pricing context, an Everett industrial listing for lease was recently advertised at approximately $1.14 per square foot per month, plus NNN expenses. An Arlington industrial property was recently offered for sale at $228.90 per square foot. These are asking prices for different properties, not completed transactions or directly comparable buildings.
For this illustration, round those figures to $1.15 per month for leasing and $230 per square foot for purchasing.
The financing assumption is 7.25%, matching Select Commercial’s published starting rate for retail, office, and industrial financing dated October 29, 2026. Its published maximum loan to value was 75%. These are advertised starting terms, subject to underwriting, rather than a quote for this hypothetical buyer.
| First year comparison | Lease | Buy |
|---|---|---|
| Space | 10,000 square feet | 10,000 square feet |
| Base rent or purchase price | $11,500 monthly | $2,300,000 |
| Down payment/move-in money | $23,000–$35,000 | $575,000 |
| Loan amount | Not applicable | $1,725,000 |
| Monthly principal and interest, using 25 year amortization | Not applicable | $12,468 |
| Monthly operating expense allowance | $3,333 | $3,333 |
| Estimated monthly occupancy outlay | $14,833 | $15,802 |
The operating expense allowance of $4 per square foot annually is an assumption, not a verified budget. It is held equal to isolate the financing difference. The $23,000-$35,000 lease move-in estimate is also an assumption and allows roughly two to three months of base rent for initial rent and deposits; actual requirements vary by lease. Utilities, improvements, purchase closing costs, and major capital projects are excluded and need separate estimates.
Buying requires about $969 more each month in this example, plus $575,000 down and additional acquisition costs. Approximately $25,400 of the first year’s loan payments would reduce principal.
That principal reduction matters. So does having approximately $550,000 available to operate and grow your business. Knowing your business's weighted average cost of capital is very helpful when considering these two options.
A complete comparison should also consider future rent changes, repairs, taxes, potential appreciation or depreciation, selling costs, and how long you expect to stay.
Making the Decision for Your Business
Start with the properties that actually fit your operation. Zoning, parking, access, power, layout, and room to grow matter whether you lease or buy.
Then compare the cash flows and the capital required. What does each option leave available for the business? What happens if growth is faster or slower than expected? What return could that down payment earn elsewhere?
At Serviss Commercial, we help business owners evaluate properties, compare occupancy costs, and understand those tradeoffs. We work alongside your lender and CPA so the real estate decision supports your business plans.
If you need space in Snohomish County or North King County, let’s talk through both options before you commit.
