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Sunday, February 05, 2006

"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.
"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)


S Crow said...

Tim - slightly sparse over here. Everyone must still be in therapy over the Seahawks loss. My brother still has yet to call me from Massachusetts regarding the game, but he's a little distracted with the housing problem there in New England. Say's it's ugly.

Lot's going on in Snohomish Co....

Dukes said...

If I were Paul or Stanley I wouldn't be throwing close to 5 mil for a "new idea" at this point in the game.

People will get burned, maybe these guys will, maybe they won't. But the question is: Is this worth the risk right now???