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Rudder

NEW YORK CITY—In common with the investment sales market in general, office condominium sales activity for the first six months of this year tanked, according to a recent report from Time Equities Inc. The sector managed just seven sales totaling 46,159 square feet and totaling $35.2 million in the first half of 2009, compared with 45 sales totaling $144.2 million in the second half of 2008. However, a pair of office condo sales in the space of a few days at the end of October accounted for nearly one-third of the six-month dollar volume and more than half the square footage.

In late October, TEI announced that it had completed the $6.9-million sale of a 15,217-square-foot office condo at its 131 W. 33rd St. to Progressive Credit Union. “Progressive's purchase highlights the growing trend of stable New York businesses who wish to own their office space and benefit from appreciation as the market rebounds,” says Michael Rudder, director of office leasing and sales of TEI, who represented the seller along with Michael Heller. “This sale highlights the sentiment amongst buyers that the market is bottoming out and that now is the time to buy.” A.J. Camhi of Murray Hill Properties represented Progressive Credit Union, a cooperative financial institution that specializes in lending to New York City taxi medallions, in the transaction

Within that same time frame, Winoker Realty Co. represented the Elizabeth Foundation for the Arts in the $4.85-million sale of its 10,314-square-foot office condo at 323 W. 29th St. to Michael Brandon Enterprises, a menswear company. The space’s new owner will use its as a showroom and as its new corporate headquarters within the city.

Winoker EVP Jonata Dayan, who handled the sales transaction along with associates Adam Ben-Dayan and Jonathan Ben-Dayan, says in a release, “"In today's challenging economic environment, the commercial condo strategy yields many benefits. With an eye on long-term investment value, smart business owners view office condos much the same way individuals view a 401(k) account. Their equity investment in a condo shields them against rent increases. At the same time, sellers of condo space generate timely revenue."

The TEI report notes that office condo unit owners benefit from the ability to customize, design and construct office condos to meet their particular business needs. Other advantages of office condo ownership, according to the report, include stable monthly expenses, property appreciation, customizable space, tax exemptions, a permanent location and fixed costs with no rent increases. Office condos can range in size from a single office suite to several combined floors.

As of mid-October, Winoker, whioch launched its office condo division in 2004, was exclusively representing owners of more than 40,000 square feet of commercial condominium space in Manhattan. TEI offers five office comndo properties around Manhattan, including 131 W. 33rd. Built in 1959, the 16-story property currently has more than 208,805 of space for sale.

“There are several sales in the building that are expected to close soon, which represents a significant increase in activity from six months ago,” Rudder says. “As the market improves, more businesses are taking advantage of the soft market to lock in their real costs and realize long term gains as values rise.”