Office Condo Market Cooling Off
Monday, October 11th, 2010First off, heres an article published recently at www.realtor.org:
“A poll of more than 100 office appraisers, developers, and brokers found that 54 percent believe office condominiums are a trend that will come to an end once interest rates go up.
The poll was conducted by Grubb & Ellis and PNC Real Estate Finance. The typical scenario finds businesses buying the condos so they no longer have to pay rent, giving them greater control over space and occupancy costs. More and more office condos have been purchased as investments lately. Phoenix is one of the largest markets in this niche, with 189 office-condo properties in place and more than 100 others in various stages of development. However, other markets, such as Houston, with only three office-condo properties, barely register, even though that Texas city’s office sector is three times the size as Phoenix’s. ”
Source: Wall Street Journal (121405); Corkery, Michael; Forsyth, Jennifer S.; Haughney, Christine
Of particular note is in those office condos that are purchased as investments. Several real estate investors, myself included, have invested in these types of properties, only to find few if any potential tenants for the vacant space. In a market with the vacancy rate hovering between 15 & 20 %, I felt it was prudent to get out quickly. Im very glad I did.
Its not the quality of the space that is the issue, but the fact that any tenant that is a good candidate for this space will very often simply purchase their own office condo. Many of the prospects for open the office condo space are startups or small businesses that can only commit to a one- or two-year lease. These businesses will either make it and buy their own office condo or fold up shop and move back to the spare bedroom home office from where they came leaving the investor to try to find another tenant.
Make no mistake, these are great properties, well built, with excellent finishes, that are outstanding values for the owner user. As an investor, I would look to other areas, specifically industrial or warehouse properties, to spend my funds.
Good luck to you,
Marty Olson
Fox Real Estate Group
mo@foxreg.com
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www.mnspaceforlease.com
www.officespacemn.com
www.warehousespacemn.com
Loft Living in Saint Paul
Monday, August 23rd, 2010One of the most popular trends in the condo market is thriving in Saint Paul. Lofts have become a huge part of the condo industry. The renovation of old warehouses has brought forth some of the most beautiful and unique condo choices on today’s market. What is the attraction to these homes? Firstly, they come with all of the inherently desirable aspects of condo ownership. It is amenities such as fitness clubs, spas, group meeting facilities, and great location that have made condos a great choice for city dwellers all over the country. Now, with the loft option, a style of living that is truly artistic has become available and is truly selling like nothing before.
The loft originally became popular as a livework space or artistic workshop. Since that time lofts have evolved dramatically to become some of the most unique and popular condo choices on the real estate market in any city. Lofts offer an open floor plan that is highly utilitarian. True lofts feature no dividing walls and one large living space, usually featuring popular assets like concrete or wood floors, exposed brick walls and exposed ductwork.
Lofts have really caught on in many cities and this is especially true in Saint Paul. With an excellent selection of lofts spread throughout Saint Paul’s historic downtown area, buyers can pick and choose their new homes with ease. This is an excellent area to purchase condos in. The real estate market is in a state of growth and home owners and investors alike are realizing a huge profit on their homes and a big jump in their equity. With the excellent transportation and amenities offered by Saint Paul, this area is fast developing into one of the most intelligent real estate purchases available.