Final answer:
Owners prefer longer commercial property leases primarily for the stability of operating income, saving on costs associated with re-leasing, and delaying tenant improvements. These long-term agreements provide financial predictability and lower operational burdens. Option B is correct.
Step-by-step explanation:
Owners often prefer longer leases for commercial property for a variety of reasons, all aiming towards the general financial and operational stability that such leases afford. One significant advantage of longer lease terms is the stability of operating income.
With a long-term lease, landlords have a predictable stream of income over a longer period, which can be crucial for financial planning and managing expenses associated with the property. Longer leases also mean a delay of releasing costs, as the property won't need to be marketed and leased again for an extended period, saving on brokerage fees, advertising, and potential vacancy losses.
Another important factor is the delay of tenant improvement allowances, which refers to the postponement of having to pay for customizations that new tenants often require.
The notion of 'the long run is the period of time during which all factors are variable' is applicable to commercial leases since it allows for future adjustments when the lease expires; for example, a pizza shop owner might choose to move to a more suitable location. Price ceilings and their effects on the housing market, though relevant for broader economic discussions, do not directly explain why owners prefer long lease terms.