Boston Office Market Trends Toward Condos

BOSTON-Approaching 30 years in the business, NAI Hunneman Commercial Co. principal Jeffrey Becker has seen plenty of real estate formulas come and go, but the veteran broker considers a recent trend in office condominiums as an idea with lasting power. Becker is helping three property owners market condos in commercial buildings throughout the city, including a 30-unit asset at 185 Devonshire St. in the Financial District and a seven-unit building at the redeveloped Charlestown Navy Yard.

“It’s an opportunity to lock in your occupancy costs and enjoy the tax benefits that come from ownership,” Becker tells GlobeSt.com, in explaining why he believes locals are finally embracing a structure that has been largely missing from the commercial real estate landscape in Greater Boston. Becker offers a number of reasons why the format finally seems to be catching on, the most obvious being a record run-up of office rents during the past 18 months fueled by tight supply and new landlords who paid big prices for buildings and now need to pass on those costs.

“People are getting sticker shock in a big way,” relays Becker, who notes that buyers of the six units already trading at the Cooper Building in Charlestown all hailed from Boston. Hunneman was called in by owner Davis Marcus Partners last summer to determine what could be done with the three-story historic structure whose tenant had recently departed. “We felt the parts were more valuable than the whole, and were able to sell them on the (condo) concept,” says Becker, who was engaged at the time by Florida-based Bayview Financial to market 185 Devonshire St.’s units.