For most of the past decade, the default answer for East Bay businesses looking for commercial space was simple: lease. Buying felt like something larger companies or institutional investors did. The down payment was too big, the process too complicated, and the market was moving too fast to justify the commitment.
That calculus has shifted. Here's why ownership deserves a serious look for qualifying East Bay businesses in 2026 — and how to think through whether it makes sense for you.
The Core Math Has Changed
Three things have converged to make owner-user acquisitions more compelling right now than at any point in the past decade.
First, pricing. Class B commercial buildings in Oakland and the broader East Bay have come down significantly from their 2019 peaks. Buildings that would have required $300+ per square foot two years ago are trading at $150–200/SF today. For a business that needs 5,000–15,000 SF, that's a meaningful difference in the acquisition cost — and in the monthly payment.
Second, SBA financing. The SBA 504 and SBA 7(a) loan programs allow qualifying owner-users to acquire commercial property with as little as 10% down. The federal government is essentially subsidizing commercial ownership for small businesses, and not enough business owners know it.
Third, lease costs haven't fallen proportionally to purchase prices. Even with the concessions I described in my recent Oakland market update, quality East Bay office space still commands real rent. The gap between what you'd pay to lease and what you'd pay to own has compressed in ownership's favor.
"Every lease payment is gone. Every mortgage payment builds equity. For businesses with stable occupancy needs, the comparison often surprises people."
What SBA Financing Actually Looks Like
The SBA 504 program is specifically designed for owner-user commercial real estate and is the most common financing vehicle I see used in these transactions. Here's how it typically works:
- 10% down from the borrower (you)
- 40% from a Certified Development Company (CDC) backed by the SBA
- 50% from a conventional lender
On a $1.5M acquisition, that means roughly $150,000 down to own your building. The monthly payment on the combined financing at current rates is often comparable to — and sometimes less than — what you'd pay in rent for the same space.
The SBA 7(a) program offers more flexibility but typically requires 20–25% down and works better for businesses that need more working capital flexibility alongside the real estate financing.
Who This Works For
Owner-user acquisitions aren't right for every business. They work best when:
- You have 2+ years of stable operating history and qualifying financials
- You occupy at least 51% of the building (SBA requirement)
- Your space needs are relatively stable — you're not expecting to triple in size in the next 3 years
- You have the down payment available without compromising working capital
Healthcare practices, professional services firms, non-profits with stable funding, and established businesses in the 10–100 employee range are often ideal candidates.
What I Tell Clients Before They Decide
I always run the comparison honestly. I model out the total cost of leasing over a 7–10 year period — including rent increases, lease renewal risk, and TI contributions — against the total cost of ownership including financing, taxes, insurance, and maintenance. In most cases I've run in 2025 and 2026, ownership comes out ahead on a 7+ year horizon.
But the comparison isn't purely financial. Ownership ties up capital, requires property management attention, and reduces flexibility if your business needs change dramatically. Those are real considerations.
The point isn't that buying is always better. The point is that it deserves a serious look right now in a way it didn't two or three years ago — and that most business owners haven't run the numbers recently.
Neil Cowperthwaite is a Principal at Lee & Associates Oakland. He has helped numerous East Bay businesses acquire owner-user commercial properties, including multiple SBA-financed transactions. DRE# 01912683. Interested in running the buy vs. lease comparison for your business? Schedule a free consultation.