It’s pretty common to see multi-use condos in Toronto in which the upper floors contain residential units, and commercial units occupying the first and/or second floor. But one Toronto developer is taking a concept that so far has only really gained popularity in Canada in Vancouver; and is very commonly used in the Far East. He’s building a condo in Toronto in which the units for sale will be units sold to businesses – 100% of them.

Developer Patrick Quigley, president of St. Thomas Developments, says that his concept is very simple. Just like people would rather make the investment to own their own house, rather than shelling out huge amounts of dollars every month to rent, so too is the case for commercial space.

“People sell their big homes, buy a condo and they still have business interests. They want an office and they don’t want to rent an office because they are throwing away the rent money,” he says. “The equation can be very simple, the difference between renting an apartment and owning a condominium. It’s the same.”

Mr. Quigley says that the cost of renting commercial space in Toronto is on average, $20 – $30 per square foot. But in his upscale condo suites, it would cost about $40 per square foot for the average unit. People simply need to compare that against the $830 per square foot that his commercial units are being sold for.

The building is currently about 25 per cent sold, and Mr. Quigley says that before they continue to go ahead with construction, he’d like to see the building at 50 per cent sold.

“It just hasn’t caught on in Toronto because the product has not really been available,” he says.

The first three floors are occupied with heritage houses – revamped, rebuilt, and redesigned so that they are now equipped for office space. The top six floors are really the creme de la creme, with modern glass-enclosed spaces that can be combined to make for one very large space. The smallest of these units are 600 square feet, with the largest three times that size, 1,800 square feet.

At the price Mr. Quigley quoted, that’s $1,503,000 for just one of the largest upper floor units.

But Ross Moore, head of research with CB Richard Ellis Canada, says maybe there’s a reason the trend hasn’t caught on yet. And that commercial buyers need to be very cautious, and consider all scenarios for their business before taking the plunge on using a condo unit as office space. Even really fancy glass-enclosed office space.

“People will look at what it costs to rent and what they can buy,” says Mr. Moore. “Industrial has become much more mainstream. Office is tough because the issue is you may need 3,000 square feet today but what happens if your business booms and you need 20,000. You can’t just go to your landlord and say I need another floor or leave when your lease expires, you have to sell the thing.”

What do you think? Would you buy a condo unit to run your business from? Or will you stick with more traditional, stand-alone buildings?


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