If an older building has become physically obsolete (i.e., the space is poorly laid out for contemporary purposes), it will devalue the building’s worth. If that building is laid out perfectly for your business and you plan on keeping the building forever, that is excellent.
The perfect example of this is when I was working with an art dealer. The odder the building the better it worked for showing off the art works. When we found a former racquetball court that had been listed for a long time, we found perfection! The racquetball courts with the original wood flooring were the perfect space to show off the art.
Another client I worked with put an offer on a 25-year-old building. The building appeared to be in decent condition. However, when we completed the inspection, we found that it required over $100,000 of repairs. The client decided to walk away from the building, as the seller wouldn’t budge on the price. A few months later a building less than 10 years old came up for sale. The price was higher, but the repairs were almost nothing. That was an easy transaction to complete.
Oftentimes, a building’s value is subjective and depends on your perspective and your needs. If you don’t want to buy a building that needs updates right away, find a newer one.