There’s a growing trend of small businesses that have seen revenues climb and are confident enough to make the financial commitment of buying factory, warehouse, retail or office space, according to a story in the San Diego Daily Transcript.
“Our business has grown steadily since 2010. This year through April sales are up 40 percent compared to last year…,” said Jeff Partrick of fitness equipment manufacturer Hoist Fitness Systems. Steve Phillips, CEO of Punch Visual Concepts, echoed the same optimism when he decided to buy a 30,000 square-foot building: “As it turns out, the rent we’re paying now and the amount we’ll pay on the (SBA-504 loan) mortgage is pretty close, and we’ll wind up with more usable space.”
Kurt Chilcott, CEO of CDC, thinks the uptick in purchases by small businesses is driven by a combination of factors: businesses have weathered the storm and are emerging stronger as revenues bounce back; they recognize that with current interest rates, their loan payments are not going to be much more than their rents; they are comfortable getting back in the market.
“We’re never going to see interest rates like this again. I think they’ll be around a lot longer, but it’s doubtful that we’d see real estate rates so low,” Chilcott said.