“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 (12/14/05); 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...
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