Industrial Condo's
Industrial Condo Ownership
Pro-Bono Info from Tucson, Arizona's Foremost Real Estate Broker
There are advantages and disadvantages to owning an Industrial condominium. In addition to the information I provide
on these pages, my 20 years of commercial real estate experience here in Tucson, Arizona is at your disposal. Whether your interested in investing in Industrial condo leasing, Industrial condominium owning, land development, or even 1031 Exchange, I look forward to working for your best interests. Your successful commercial real estate investment is my highest concern.
Commercial Condominiums: Owning vs. Leasing
Office and Industrial condos - also known as "commercial 
condominiums - operate like their private housing counterparts. Instead of renting a suite of offices, some companies purchase an individual unit in an office condominium complex. The common areas are co-owned by all of the tenants and a board usually oversees landscaping and other maintenance issues.
Office condominiums are ideal for professionals and companies that can safely predict their permanent space needs. An architectural firm or 
small advertising agency might do well in office condominiums, but a fledgling manufacturing company could find future expansion nearly impossible. There may also be restrictions on the type of business conducted in office condominiums. For instance, the facility may not be able to accommodate excessive customer parking.
When compared to renting equivalent space, one advantage of owning is the increased rights. Rental properties are always under the control of a landlord, 
which means that monthly rent could be raised or the lease terminated with short notice to the tenant. Renters face the real prospect that their rents will escalate in the future because of rising construction costs: land, steel and concrete have risen at least 25 percent in years. By owning the space, companies can avoid such surprises. And a mortgage should remain relatively stable over the life of a loan.
The commercial office or industrial condominium owner seeks to lock in occupancy costs and build real estate equity. Buying space insulates a company from rising base rents since mortgage payments are fixed by the terms of a loan, not the landlord's rising development costs, and the business owner builds equity with the principal portion of his mortgage payments. The owner has the opportunity for equity growth as the market value of the condominium appreciates - a phenomenon that no one can guarantee but few would deny occurs quite regularly.
During economic downturns, larger companies may invest in office/industrial condominiums in order to consolidate departments. Smaller companies may not see the benefits of condo ownership if their current rental arrangements appear beneficial.
Commercial condos function much the same as residential condominiums but with somewhat fewer legal complications. In these projects, individuals or small associations of business people separately own their own units but jointly own and share the expenses of maintaining common areas such as lobbies, parking and landscaping either as co-tenants or members of an owners' association. Unlike residential condos, which are usually available only in one-, two- or three-bedroom models with limited interior variations allowed, commercial office condominiums are unique in that well-planned, new construction projects permit the buyer to purchase one or more adjacent units whose sizes and interior improvements can be configured to meet the owner's precise needs.
Michael Coretz, Tucson, Arizona's Foremost Real Estate Broker.
As your commercial real estate broker, you can be assured that your concerns are my concerns. I use the most up-to-date analysis technology in the business. My clients, new and returning, receive clear, timely information enabling decisions that increase their bottom line.
the Arizona Department of Real Estate