The condominium ownership concept has now effectively moved beyond
residential. In Austin, business condominiums are part of the New Urbanism
movement, or projects that combine residential and business uses. The
condominium concept is being expanded into Austin's central core with the
advent of multistory high rises, layered with ground and second-story retail,
midlevel offices or hotel space, and top-level residential condominiums, some
that include penthouses.
These projects have the benefit of professional management and the common
business judgment and expertise of the owners of the condominiums inside the
project.
Business condominium users have ownership over their business' sales or
service space, and share ownership of common spaces, such as grounds, buildings
and parking, with other condo owners. Texas condominium law is very flexible,
allowing decision making, cost sharing and common area ownership to be
allocated all together or each in different ways. For example, in a 32-unit
project, each condominium owner can have one vote, but cost sharing is
allocated in by the ratio of the unit's square footage compared to the total
square footage of all units. Agreements can be crafted such that condo owners in
one building can be made solely responsible for improvements or amenities
unique to their building. For example, the cost of maintaining an elevator in a
multistory building located inside a project that has both multistory buildings
and single-story buildings can be the sole responsibility of the owners of
units in the building that contains the elevator.
Business condominiums, similar to leased office and retail space, are
marketed as unfinished shell space, with buyers hiring their own architect and
contractor to finish out the space or with a project developer providing
construction of the finish out. Components such as parking and storage spaces
can be set up for ownership and sale apart from the shared common areas.
Projects can also be restricted to certain business objectives of the owners,
such as limiting the use of the units to medical-related professions.
Office condominium owners can get higher quality construction and materials
then they would could in a small freestanding building. A buyer in an office
condominium project has the benefit of economies of scale. For example, one
developer reported that since it is completing 50,000 square feet at one time,
buyers save roughly $10 per square foot on their build-out costs. An owner of a
business completing a small freestanding building would spend nearly one year
obtaining site plan approval and may have difficulty assembling a development
team. New office condominium projects in the Austin area sell for $210 - $300
per square foot with annual unit share of operating costs for common areas,
such as building shell, landscaping, parking areas and gates, running around
$1.50 - $3 per square foot of a unit. Office unit owners are separately
responsible for their unit's utilities, cleaning and insurance of build-out
upgrades. Additionally, office condos typically look more residential by
incorporating stucco facades and tile roofs versus the more typical cold
technical feel of rental space.
blocke@gdhm.com