LeClaire: How did Bayview Financial position itself to cater to individual owners and renters?

Hurwitz: In last real estate boom, developers were converting rental buildings to office condos much like our peers did on the residential side. In this case, Bayview did a good job of developing a competitive product that wasn’t just a conversion—it was a ground-up building. A condo building can be set up so the tenants have control of their own electricity. In a conversion, especially older buildings, you can’t necessarily run each unit separately.

LeClaire: What was Bayview Financial’s goal in taking its time to find the right owners and renters, versus turning over the building to the condo association as soon as possible?

Hurwitz: The goal really was to get bodies in the seats. We entertained leasing space if people were more comfortable with that. We didn’t sell units to investors from other parts of the world that we’re buying to flip, or who didn’t intend to use it for their own purposes, or didn’t have someone to lease it to. We sold units to end users and we leased units to end users. Then later we sold those leased units to investors with real, live, reputable secure tenants in place.

LeClaire: How have investors and renters have responded to this strategy?
Hurwitz: Investors have responded well. We’re at almost 90% occupancy, which is strong even when compared to a stand alone rental, lease-only building. We leased space directly to Prudential, the BBC, WEA, and Bernier.

LeClaire: Why this approach is unique among office condos? And are other properties are following suit?

Hurwitz: Some of the competition waited too long to lease space to tenants. It was a reaction to not selling the units. Bayview was quicker to respond to the demand for leasing and got companies in the building as tenants, which was attractive to investors.

LeClaire: Where are the prospective condo buyers coming from? Is there movement among foreign investors?

Hurwitz: A lot of our buyers are foreign. But again they’re buying good income streams. They’re not buying empty units. We don’t have one unit in the building that was sold to an investor that is not occupied.
LeClaire: What types of tenants that are most desirable to an owner in the market for an occupied unit?

Hurwitz: We have some medical, real estate companies, several law firms and architects. So we have a pretty good mix and a classy rent roll.
LeClaire: Which industries or company types are best suited to lease space in an office condo like Merrick View? And why?

Hurwitz: Medical traditionally has always been a good user because they have to invest a lot of money into their space. It’s kind of like leasing versus buying a car. If you’re putting a lot of money into it, you’d rather own it than lease it. A law firm or an entrepreneurial firm or real estate firm that grows and contracts tends to want shorter term versus longer term arrangements.