The faster you put up your prefab office buildings, the faster you can start renting your office units out. The faster building units are leased, the faster you recover your investment. Moreover, lower costs mean faster capital recovery and a faster track to profit. Depending on your local lease rates, you can enjoy tremendous ROI benefits on a per square foot basis with prefab office buildings due to their low cost. Instead of waiting possibly decades to fully recover your sunk building costs, you only need to wait a much shorter time.
Commercial rental property involves a fine balance between the underlying per square area lease rate of your property and the quality of your building. When the underlying real estate value of your property increases, you can opt to raise your rents as a fraction of the underlying land value. The only obstacle? The value of your building must be high enough to justify the increased lease rate. Or else, you would be at a competitive disadvantage compared to other nearby lessors. When you use prefabricated office buildings using a quonset model, it is much easier to tear down your quonset building and put up a higher-cost building to capture higher lease rates. Why? Since you have less sunk building costs with steel building pricing, it makes more financial sense, on an ROI basis, to tear down a quonset rather than a traditionally constructed building. This is how powerful quonset prefab buildings’ flexibility is.