Investment

Why pay Rent?
In addition to providing an outstanding place to conduct business, Piilani Place is an attractive investment opportunity. You will be able to direct cash flow -that would have been otherwise spent on rent- into property investment in a fast growing area. This is an opportunity to build equity, and enjoy the appreciation and tax benefits of real estate ownership.

For some business owners, space ownership means freedom from future lease cost increases, and the ability to invest in interior improvements without concern about losing them at the end of the lease.

Condominium units also present a flexible investment opportunity for owners who will not occupy their space. A single unit can be acquired with funds substantially smaller than those required to purchase a whole building in a typical commercial real estate transaction. Also capital gain deferral via 1031 exchange is frequently easier.

For many commercial condominium owners, the total cost of ownership is well below the cost of leasing a similar space. Some of the advantages of an ownership structure are:

• Equity buildup (loan principal reduction)
  
• Loan interest tax deduction
  
• Building depreciation tax deduction
  
• Tenant improvements depreciation tax deduction (faster)
  
• Uncertainty of future rent escalations is eliminated
  
• Appreciation in property value

The effect of any of these on your specific situation will vary – please consult your accountant and tax advisor.

Various loan programs are available from local banks for condominium unit purchases as well as financing of tenant improvements build-out. Most small businesses that purchase their space will also be eligible for 90% financing with the Small Business Administration (SBA) 504 Program. Your real estate broker or Piilani Place sales team can refer you to lenders who are well familiar with the project.