There’s a new trend in commercial space and the result may leave the traditional lease in the dust. According to a recent article from The Real Deal, office buildings are being marketed as condos, as more business owners opt to own their spaces as opposed to renting it. And developers are taking note with a plethora of sleek new office-condo towers on the horizon, selling entire floors in the pre-construction phase. While this practice may be relatively new in the United States, office markets abroad have previously seen this trend.
“A lof of our clients outside the United States do own their own office space,” said Alan A. Lips, partner at Miami Beach based accounting firm Gerson, Preston, Robinson & Co. “And I welcome the trend in Miami because this is such an international city, and the move toward office condos is moving in such a positive direction.”
Lips’ firm decided two years ago to relocate their offices, and after careful consideration, decided it made the most sense to buy.
“If you look out 15 or 20 years, I can tell you with confidence that our overall cost of owning will be less than the cost of rental under a normal commercial lease,” added Lips.
The 16-story proposed office-condo project, Ofizzina 1200 in Coral Gables, is attracting international buyers with a total of 96,767 square feet of office space and retail units on the ground level. Camilo Lopez, CEO of the Solution Group, developers of Ofizzina 1200 stated that when they purchased the property a couple of years ago, the buzz was that everyone was looking for boutique space, not in just the residential arena, but in commercial and office space too. Pre-construction sales in the condo have reached about 60% with dozens of buyers paying approximately $700-$850 a square foot. Investors are coming from all over the world, with buyers from Argentina, Brazil, Hong Kong, Mexico, Switzerland and the UK.
Other office condo projects in the area include Integra Investments’ Chase building at 150 Southeast Second Avenue in Miami, and Aventura ParkSquare, which is a mixed-use project with 100,000 square feet of Class A office space in Aventura. And just west of Aventura, partners CK Holding and Privé Group are planning Forum Aventura, a 12-story office condo in Ojus. The building will include 95,000 square feet with two retail condos on the ground floor.
“It’s a great local market and there are no vacancies in the area,” said Javier Rabinovich, CEO of Prive Group. “We believe we will have a lot of local end users in the building as well as investors.”