WHITE TIGER CONDO CONVERSION
"Transforming buildings and cities to be more liveable, sustainable, resilient, and affordable."
— World Economic Forum
MIXED USE AND COMMERCIAL BUILDING OPPORTUNITIES
Markets are dynamic so the highest and best use — i.e., the greatest value — of a property today may not be the highest and best use tomorrow. Conversion can be an effective pathway to the highest and best use of a commercial property. Certain existing small to medium professional office and medical buildings, mixed-use and flex-warehouse buildings, and other types of buildings — are potential candidates for condo conversion as individual business condos, owners can optimize their value and cater to the changing needs of tenants and investors in the market.
Conversion of existing structures can offer numerous advantages over constructing new buildings from scratch. Not only is it often more cost-effective and profitable, but it also saves time that would otherwise be spent on acquiring land and undergoing lengthy public evaluations for new construction projects.
Building owners stand to benefit from conversion in several ways. Firstly, they can save on ongoing maintenance costs, as well as expenses related to upgrading and property taxes. Secondly, conversion presents an opportunity for owners to realize immediate profits and increase the overall value of their properties. Lastly, conversion relieves owners of the responsibilities associated with marketing, managing, and leasing properties, allowing them to focus on other aspects of their investments or business operations. Overall, conversion offers a compelling economic rationale for building owners seeking to optimize the value and utility of their assets.
Moreover, owning a converted unit allows occupants to fix the costs and terms of their occupancy, providing greater predictability and stability compared to leasing arrangements. Additionally, buyers of converted units often benefit from immediate built-in equity, as well as the potential for steady appreciation in property value over time. This appreciation can provide long-term capital growth and financial stability, making conversion an attractive option for individuals and businesses alike. Overall, conversion offers a compelling value proposition for both tenants and buyers seeking to secure their occupancy and investment in commercial real estate
CREATIVE ALTERNATIVES AND FLEXIBLE OPTIONS IN THE NEW PARADIGM
The COVID-19 pandemic has prompted building owners to explore more creative and flexible options for utilizing their commercial properties. Condo conversion has emerged as a compelling alternative, offering owners the opportunity to adapt their properties to meet changing market demands.
Rather than adhering to the traditional dichotomy of renting or selling, building owners are embracing the concept of lease-to-own agreements, providing tenants with the option to purchase their space at a later date. Short-term leases are also gaining popularity, allowing for greater agility and responsiveness to market dynamics. Additionally, owners are simplifying lease contracts and relaxing restrictions to offer tenants more flexibility in space usage, such as subletting arrangements.
Local governments are likewise facilitating adaptive reuse and modernization efforts by streamlining regulatory processes and updating building and zoning codes. Cities are easing restrictions on mixed-use developments to foster vibrant, diverse neighborhoods that support both commercial and residential uses.
Overall, these shifts reflect a growing recognition of the need for flexibility and innovation in the commercial real estate sector, with condo conversion serving as a strategic tool for revitalizing properties and adapting to evolving market conditions in the post-pandemic landscape.