Commercial condominiums: Why and for whom?
Companies have multiple options when it comes to choosing their business spaces. Investing in a commercial condominium is a solution that delivers both security and comfort at a lower cost. At Growners, we offer buildings with shared business space, in other words, office condominiums providing optimised and customised layouts for businesses and as real estate investment opportunities.
Commercial condominiums – productive workspaces
Legally speaking, a commercial condominium is a commercial space that has been divided into multiple units. The individual businesses that occupy these units own their individual condominiums, i.e. the private units where they conduct their business. This model is very common in the residential real estate market, for example, in apartment buildings. Commercial condominiums work the same way and provide the same benefits.
The benefit offered by commercial condominiums to businesses is that the cost of acquiring the workspace is significantly less than purchasing a comparable independent commercial building. As the sole owner of a building, you are responsible for all the associated management and maintenance costs.
With a commercial condominium, certain significant costs are shared by the various businesses that own units in the building: parking, infrastructure, air conditioning, entrances/exits, elevators, stairs, toilets, etc. These common facilities and areas are managed by a property management firm, which specialises in the management of real estate and allocates costs among the owners of the units.
The property management firm manages the building and is very knowledgeable about and has extensive experience with safety standards, prices and suppliers. It carries out the right maintenance at the right time to ensure that the building remain in good condition. All this means much less work for the owners of the individual units.
The right approach for SME's
As mentioned above, unlike the building manager, most businesses have very little idea about what maintaining a building entails. Among the many benefits of commercial condominiums, the budget issue is particularly important for smaller businesses. The condominium's model and advantages are not exclusively reserved for bigger companies.
Since SMEs generally have fewer resources, they are less able to handle the significant costs involved in buying or renting spaces. However, in a commercial condominium system, the costs of running the building and of investments are divided among all the occupants. For example, if the boiler has to be replaced, no single business with a unit in the commercial condominium will have to bear the entire cost alone. Or if the businesses change their fleet of company cars to electric vehicles, the cost of installing charging stations in the car park could also be shared between the occupants.
On the other hand, the disadvantage of this system is the fact that you are not the only one deciding about changes or the maintenance of common areas. So if you want to install a heat pump in the building, you will have to get all the other unit owners to agree. The property manager organises general meetings for that purpose with all unit owners. The property management firm will then give its opinion, ask suppliers to submit quotes and use its expertise to inform the unit owners, but it has no decision-making power of its own.
Why invest in a commercial condominium?
Growners provides real estate investment for different types of players. Firstly, end users, which are businesses, buy a unit in the commercial condominium so they can work there. Secondly, investors, who see it as an opportunity to invest in a property that is fully managed by a property management firm.
For investors, it is attractive to invest in a commercial condominium because it is so hassle-free. While such investments are open to individuals, who can then lease the space to a third party, they are generally made by investment companies or family offices.
Growners' role is to buy existing buildings, renovate them and divide them into multiple units in order to give them a second life. These upgraded and newly optimised commercial ecosystems are then sold to businesses and investors so they can reap the benefits of having an appropriate workspace or a safe real estate investment.