"This is the third real estate segment here to fall to condo conversion. Once unusual in the office market, this is now becoming common," he adds. Buyers of office condo units are typically smaller businesses, "such as accounting and legal firms and other service professionals. Usually about 50% of the buyers of units are already tenants in the buildings."
Condo-unit sales prices range anywhere from $250 per sf to $450 per sf, depending on the quality and location of the property, according to Sime. The rise in office condo conversions comes at a time when the office market "has turned from the tenants' favor to the landlords' favor," he says, predicting that office rental rates, "stagnant over the past five years, will command premiums of between 10% and 15% here in 2006."
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