While the marketing thrust in multi-family housing now is converting residential condos to rentals, one San Fernando Valley developer is taking a new path—transforming rentals to office condos.
NoHo Lofts, in North Hollywood’s Arts District—developed in 2006 as an apartment complex—is being converted into 68 office condos.
“This product is not only ideally designed to function as a live/work project but, equally important, in this chaotic financial climate it provides an ideal economic solution for start-up or small businesses, where the owner can live and/or work in the same space,” says Dan Markel, president of North Hollywood-based DT Group, the developer.
“Moreover, says the former Morgan Stanley broker, “if more than one-third of the unit is allocated to residential use, there are highly attractive tax benefits.
Markel also noted that the building, which originally served as the Adolph’s Meat Tenderizer testing facility, has the structural bones which make it ideal for commercial office use.
Also, when one compares the cost of renting an office in a Class A building, plus parking costs and pass-through expenses to NoHo Lofts, it’s no contest,” says Ramsey-Shilling principal Chris Baer, a former CPA and tax consultant as well as a broker. “And there are no rent increases to worry about.”
If, explains Baer, the buyer uses for business half of a 1,000 square-foot unit, priced around $450,000, assuming a 10% down payment, he/she saves about half of what leasing a similar space at $2.65 per square would cost.
In addition, notes Baer, financing at NoHo Lofts is arranged by the developer, thereby saving the buyer time and eliminating the travail of dealing with lenders during this credit-crunch period.
“There’s also another intriguing investment aspect provided by the project—buying one of the units and renting it to another party,” said Baer. “Besides cash flow, capital appreciation and tax benefits, there are 1031 property exchange possibilities.”
Some 40 floor plans, ranging from 520-1650 square feet, are priced from $243,000 to $890,000, according to the developer.
Available in one and two-story floor plans, the units are distinguished by exposed brick, wood beams, polished concrete flooring, operable windows and ceiling heights from 12-25 feet. Kitchen highlights include stainless steel appliances and recessed lighting.
Social amenities include business centers, fitness facilities and roof-top amenities for group entertaining. Additional recreational facilities are located in the nearby North Hollywood Park, and the MetroRail station and Hollywood Freeway are readily accessible.
Located at 5355 Cartwright Ave. in the NoHo Arts District, the neighborhood offers a wide range of entertainment, art and other leisure time activities.
For more informaiton: Ramsey-Shilling Commercial Real Estate Services, 323.851.6666