"Office Condos" Coming To Seattle?

With the real estate craze that we've been living through these past few years, I'm surprised someone hasn't come along with this idea sooner—selling office space rather than renting it.

When businesses are looking for space, they usually either lease it or buy a building. But two local developers are backing a different idea: the office condominium.

Office condo buildings are rare in the Seattle area, but changing economic conditions may make them increasingly popular.

Partners Paul Etsekson and Stanley Piha plan to buy the five-story Third and Lenora Building in Belltown for $3.3 million, spend $1.5 million more on improvements, then sell each 6,000- square-foot floor for between $2.23 million and $2.4 million.
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"But if you want to be in the real estate market right now, you're going to have to do some different things. Our thought is this will catch hold, and we want to cookie-cut it, get a reputation as a quality provider."

The plan's rarity is making it harder for the partners to finance their purchase. Etsekson said lenders "have found difficulty in understanding this market, how to find comps," or comparable buildings by which to assess the purchase's value

Does this model have the ability to gain traction in a flattening or declining real estate market? Perhaps that sort of question is also causing potential financial backers to be more cautious with this "different" plan.

(Dan Richman, Seattle P-I, 02.02.2006)