Things to Consider About Office Condos

If you’re the owner of a small company, finding adequate office space can be pretty daunting. There are so many factors to consider, such as size, location, and price. Office condos are a relatively new concept that’s growing in popularity. Just like a residential condo is a building with units people can purchase as living space, office condos are buildings with individual units that companies can purchase as office space. These buildings are becoming more common, especially in big cities where space is limited. The market for office condos is new, but fast-growing, as these lower-cost spaces fit the needs of so many.

How to know if an office condo is right for you

An office condo could be the perfect place to conduct your business, depending on what kind of company you have. In our rapidly digitizing society, companies with more of an online presence benefit greatly from office condos because they require less space to conduct business. As the more economical option for office space, they’re also perfect for newer companies who could use the extra savings. They even appeal to foreign businesses who are looking to expand their company overseas. Although office condos are growing in popularity, companies interested in purchasing an office condo should take into account their future expansion, as they are not ideal for companies that require a lot of area. Some sponsors place limitations on the kinds of companies that can purchase space in their building, and typically, office condos are off limits to manufacturing companies.

Buying vs leasing an office condo

If you’ve decided an office condo meets your company’s needs, the next step is to decide whether to buy or lease the space. Each option has advantages and disadvantages to be taken into consideration. Buying an office condo has the benefit of a fixed mortgage, tax deductions for owners of nonprofits, the opportunity to earn additional income by renting out any extra space, and appreciation over time that can contribute to your retirement fund. On the downside, they require more of an investment upfront, and quickly-growing businesses find it harder to expand. Foreign companies usually choose to buy because they find it to be the more economical option for the long term. If you choose to lease, it’s easier to find a prime location to establish your company and you save more money upfront. However, you are bound to the decisions of a landlord, and you forfeit equity that could help your business. New business owners tend to lease their commercial property until they can afford to buy it. When choosing whether to buy or lease your office condo, it’s important to think about what you have in mind for your company’s future, and which option better suits the interests of your company.

Final Steps

After you’ve made your decision on whether to buy or lease an office condo, assemble your team of accountants, lawyers, real estate agents, and mortgage brokers to help you find the perfect space, negotiate a contract, and assist in the financial details. Once all this is done, you can finally take the plunge, and enjoy conducting business in your new office condo.

Aurum & Sharpe is a full service commercial mortgage brokerage based in New York City. We can help you purchase and finance a commercial office condo. Contact us today.

More resources:

On what an office condo is

On the pros and cons

On how to purchase commercial real estate

On potential mistakes

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