Small Business Owners Ditch Rent and Get a Place of Their Own

A new trend in construction is allowing small business owners to leave the land of the lease. In markets across the nation, particularly California, construction companies are venturing into building commercial condominiums, which are multi-user developments that are divided into smaller units that occupants buy, rather than rent. Developers are finding that everyone from lawyers to architects to plumbing suppliers is interested in commercial condominiums. One corporation in the forefront of this construction is Mill Valley, Calif.-based Venture Commerce. The company recently broke ground on its 11th commercial condominium project and has a portfolio of roughly 2.5 million square feet of completed or approved projects in eight northern California and three southern California communities. Venture Commerce's chief executive, Robert Eves, recently told the The New York Times that this area of construction has a lot of potential. “There is a wave out there, but we don't know how big it is,” Eves says. “Small businesses have always wanted to own, but nobody knew it. Now that a product is available, interest is high.” These units can range anywhere from 300 square feet to 3,000 square feet and cost anywhere from $40 per square foot to $475 per square foot. James Manley, a broker with the Keegan and Coppin Co., a real estate firm in Santa Rosa, Calif., told The New York Times that the market may be too narrow and that rising interest rates may slow the development of commercial condominiums. Eves disputes that by referencing Small Business Administration figures that say 78% of businesses in the United States have fewer than 20 employees, which makes them ideal for these types of projects. “There are tens of thousands of small businesses near our sites,” Eves says. “Even if only a small percentage want to own, that's a lot of buyers.”