By Chase Ferrell, Senior Associate, Indermuehle & Co.

 Office condominium projects have become a popular type of office development in Los Angeles, New York, Chicago, Miami, Boston, Phoenix, and yes, even Houston. An office condo allows an individual to own a unit in a multi-unit structure. This type of ownership includes an undivided interest in various common areas and in the underlying land.

 Recent development patterns for office condo projects in Houston focus on areas with increasing population growth which means new residential development like Sugar Land, Katy or southern Montgomery County. It has been said that retail development follows the rooftops. Well, it seems the same is true of office condos these days.

 Office condo developments are designed for small, professional service providers or local service companies whose space needs will remain the same for an extended period of time. These companies are accountants, attorneys, insurance companies, real estate firms, doctors, software developers, marketing firms, and companies with personal ties to their local community. Office condos are also extremely popular with family-owned companies that are tired of commuting to an in-town office building and want to work closer to home.

 A one-story, 5,000-10,000 square-foot building that offers units as small as 500 square feet is most popular in todays office condo market. However, some developers are also converting existing multi-story office buildings into condos as well.

 Most buyers of office condos take advantage of tax benefits associated with owning an office as opposed to leasing. Many small business owners think, If I can purchase for the same price of leasing, why not? Well, this is true for some, but not all. Some businesses lack the funds for a down payment, or feel that they will outgrow their space in 3-5 years. Every business is different and must consider all the options the marketplace has to offer before deciding to purchase.

 Although the early 1980s saw a few office condo projects, the concept is still relatively new so no track record exists to determine future resale values. But, we have observed strong demand for office condos in Houstons suburban markets.