When the word condominium is mentioned, do you always think of residential properties? Of course, most condominiums are ones that people live in. But, let’s consider the other condominiums. There are all kinds. Any type of rental real estate can be converted to a condo.
There are a growing number of commercial condos, many of them professional offices. The benefits are the same as owning a free standing building used as an office. A leading benefit is the security of having an owned unit free from any problem of having to move at the end of a lease period. Like owning any commercial property, interest on loans, taxes and expenses can be deductible.
There are all kinds of condominiums. We have heard of aircraft hangers, boat marinas, high-rise parking buildings, even medical office buildings.
For example, the typical new medical condominium complex could be like this. It would have 20 to 50 professional spaces (each with street-level entrances) ranging in size from 800 to 1600 square feet. The developer offers the spaces to health care providers, among them physicians specializing in internal medicine, cardiology, dermatology, pediatrics, plastic and reconstructive surgery, and psychiatry. Dentists, podiatrists, and ophthalmologists can also be among the owner-tenants. Some spaces are reserved for laboratories, pharmacies, bookkeepers and other medical-industry service firms.
Protective Aspects
Each owner of a professional space is permitted to share that space with partners. However, each space owner is bound by a “practice protection” clause that will prevent selling or leasing to a physician or service in a different specialty from his own without giving the condominium association the right of first refusal. This clause allows the complex operators to maintain a controlled mix of tenant owners.
A key attraction is that the physicians own their space, and thereby are protected from the rapidly rising rents in nearby vertical commercial buildings.
From the patients’ viewpoint, the availability of full medical services with shared resources is considered especially attractive.