Photo courtesy of TMC Financing
While headlines continue to focus on office vacancies and an uncertain commercial real estate market, another story is quietly unfolding across Arizona. Many small and midsize businesses are choosing to purchase commercial property rather than renew leases, investing in long-term stability while giving underutilized buildings a new purpose.
These owner-users aren’t necessarily looking for brand-new construction. Instead, they’re finding opportunity in existing properties that can be reimagined for modern business needs through adaptive reuse.
It’s a trend we’re continuing to see among healthy small businesses. Owners are looking beyond today’s market conditions and focusing on the long-term value of controlling their occupancy costs, building equity and creating a permanent home for their business. When the right property becomes available, many are willing to invest.
Phoenix law firm Withey Morris Baugh recently joined that trend by transforming a vacant former restaurant near the Arizona Biltmore into its new headquarters. For founding partner Jason Morris, the decision had been years in the making. “It was our goal to secure our own office near the Arizona Biltmore,” he says. “It took more than a decade because property in that area rarely becomes available.”
When the firm learned a former restaurant was available, it saw potential despite the building’s unconventional layout. Working with Phoenix architect Hayes McNeil of Plus Minus Studio, the team converted the approximately 8,000-square-foot structure into a custom-designed office tailored to the firm’s long-term needs. “It was hard to envision what it could become,” Morris says. “But we worked with an amazing architect who helped transform the space into exactly what we wanted.”
Projects like this reflect a growing interest in adaptive reuse — repurposing existing commercial buildings instead of developing new ones. Rather than constructing from the ground up, businesses are finding opportunities to breathe new life into existing properties in established neighborhoods. For communities, these projects can return vacant buildings to productive use while preserving the character of the surrounding area.
Ownership also offers financial advantages that leasing cannot. Businesses gain greater control over occupancy costs, build equity over time and create an asset that can appreciate alongside the company’s growth.
For Withey Morris Baugh, those long-term benefits outweighed the familiarity of remaining in leased office space. “We’re building equity with a property in a premium location that will increase in value,” Morris says. “Those things are important for long-term security. But really, it’s the pride of ownership — knowing that we’ve created something amazing — that makes it all worthwhile.”
Financing was a key component of the project. Working with TMC Financing and its lending partner, the firm used an SBA 504 loan to fund both the acquisition and renovation. This program has become an important tool for owner-users because it pairs long-term, fixed-rate financing with lower down-payment requirements than many conventional commercial loans, allowing businesses to preserve working capital while investing in real estate.
The firm’s nearly $4-million acquisition and renovation demonstrates how the right financing can help businesses capitalize on opportunities when unique properties become available.
As Arizona companies continue evaluating their long-term real estate strategies, projects like Withey Morris Baugh’s suggest that demand for owner-occupied commercial property remains resilient — particularly when businesses can acquire well-located buildings with redevelopment potential.
While office market conditions continue to evolve, adaptive reuse and owner occupancy are proving that many commercial properties still have a promising second chapter. Sometimes the best office isn’t a new building at all — it’s an existing one waiting for a new purpose.
Chris Bane is senior vice president at TMC Financing, a nonprofit 501(c)(4) Certified Development Company with a mission to promote economic development and job creation by helping small businesses access affordable financing. Since its founding in 1981, TMC has provided approximately $16 billion in SBA 504 commercial real estate financing to more than 8,000 small businesses across Arizona, California, Hawaii, Nevada and Oregon. These efforts have helped create more than 63,000 jobs. TMC is recognized as the No. 1 SBA 504 lender in the nation, offering long-term, fixed-rate financing that empowers small business owners to purchase, construct or refinance real estate and major fixed assets to grow their operations.
