Why do companies that own a building sell the building and lease a space in it? Ex: CBS with television city
In: 9
Companies usually buy bigger spaces than they need. They anticipate growth, so you buy bigger. It would be common to rent the extra space out, as this is only going to be temporary– you’re not in the business of being a landlord, so temporary before you move yourself in there.
But what if you end up not needing the space? Well, again you’re not in the business of being a landlord, you’re better off just selling the building and renting only exactly what you need. This allows you more flexibility.
Lastly, in the US there are some often significant tax benefits of leasing vs. owning (less than ELI5: It actually common for some business to have someone, like a owner buy the building and rent it back to the company, or have a shell company buy the building and lease it back)
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