Office condominium sales are on the rise in Manhattan, with particular appeal to foreign business owners, Crain’s reported.
Indeed, 80 percent of sales at Manhattan’s 88 office condos are to foreign buyers, according to Michael Rudder, a principal at Rudder Property Group, a brokerage that specializes in commercial condo sales. Office condo sales, which peaked at $235 million in 2008, and dropped to around $150 million in both 2009 and 2010, are on the rise as investors, particularly in Europe, look to stash their cash, according to Mr. Rudder.
The average asking price at a Manhattan office condo has rebounded to $531 per square foot, though before the recession, the average asking price was $879 per square foot, Crain’s said.
Some of the most active office condos include the Bar Building at 36th West 44th Street, and the International Gem Tower at 54 West 47th Street. New construction office condos include 98 East Broadway, which caters to foreign buyers, and there are has been a spate of conversions to condo, such as 125 Maiden Lane, 40 Rector Street and 156 William Street. Some speculate that older addresses in Lower Manhattan will be particularly ripe for conversion to condo as newer office stock coming online in the coming years displaces them.
Office condos insulate buyers from price fluctuations and allow them to potentially reap capital gains. Properties offering blocks of office space for sale are clustered in the the area around the U.N., Chinatown, the Garment District and Lower Manhattan.
“The Chinese intrinsically understand the long-term value of owning real estate,” said Brandon Medeiros, director of leasing at Time Equities. “The Chinese don’t just think of balance sheets; they buy because it creates wealth and value for the family and for the next three generations.” [Crain's]