FAQs
What is an office condominium?
Why buy?
Is there finiancing available?
Why Rudder Property Group
What is an office condominium?
An office condominium is a portion of an office building (referred to as a “Unit”) that can be purchased, rather than leased, from the owner/developer of the office building. The owner of the office condominium unit (the “Unit Owner”) holds title to the premises and has full control over any and all design elements within the premises. Office condominium units may also be purchased from another Unit Owner. The condominium unit may be as small as a single office suite among many suites on a floor of an office building, or it could consist of an entire floor of an office building, or even several combined floors. Any construction or other improvements made to the premises of the office condominium belong to the Unit Owner.
Manhattan’s office condominium market is a small but growing sector, with 76 office condominium buildings totaling 8,220,000 square feet. Office condominiums represent 1.61% of Manhattan’s 520 million square foot office market. Nine of the buildings are Class-A representing 30% of the office condominium market. 40 buildings are Class-B representing 45% of the market. 27 buildings are Class-C representing 25% of the market. 57% of office condominiums are located in Midtown, 31% are located in Midtown South and 12% are located Downtown.
Owning an office condominium allows tenants the ability to lock in their occupancy costs and insulate themselves from the ever-rising expense of office leasing in Manhattan. Controlling office occupancy costs provides a means for an office tenant to better control the future of their business. The benefits from an investment perspective include the ability to write off depreciation and interest expense, and profit from the long-term capital appreciation of such a valuable asset. Furthermore, owners who anticipate future expansion can purchase a larger unit and sublet the excess space to a third party until the owner is ready to expand. As a result, the owner with a growing business is not penalized by increased rental rates at the time of the expansion, and, in the interim, the sublet tenant subsidizes the costs of the future expansion space.
In addition to the long-term financial incentives, owners enjoy managing their own premises with the flexibility to control all aspects of design and function for their specialized use and occupancy. Meanwhile, the management of the property and its building systems are handled by the condominium’s management team, affording the owner the best of both worlds. Furthermore, a Unit Owner can feel good about investing in construction and improvement costs in an office condominium, knowing it is theirs to keep. Such an investment in improvements under an office lease would be lost by the tenant at lease expiration and become the property of the landlord. Finally, there is also an overall sense of personal satisfaction that comes from owning your own office.
There are many available means for financing an office condominium. Aside from the typical real estate mortgage division of a financial institution, loans for purchasing an office condominium may also be obtained (and at often more favorable terms) through the “business” sector of banks – the same banking division that handles a company’s business banking services. There are also small business administration (SBA) loans for small businesses as well as IDA financing for not-for-profit organizations. Rudder Property Group can provide you with a list of potential lenders for your office condominium purchase.
Rudder Property Group, Manhattan's premier experts in the office condominium market, was formed in 2010. A commercial real estate brokerage and advisory firm, Rudder Property Group represents purchasers, sellers, developers, owners and lenders in the acquisition, conversion and sale of office condominiums.
In the small, highly specialized field of office condo sales, we are the market leaders. In fact, we have closed more sales than all of our competition put together!
No other real estate service firm in New York City specializes in the office condominium market, and no other firm has our depth of experience.