Office condos sprout up in Cy-Fair, allowing businesses to own rather than lease

For some business owners in the Cy-Fair area, owning office space makes more sense than leasing it. Developers behind a batch of new office condominium projects in the area said they are providing more business owners with that option.


At least seven office condo projects are under construction or opened within the past year in the Cy-Fair area. The projects span from Houston Office Condos near Willowbrook Mall to Cypress Crossing Office Condominiums, which is under construction at Fry and Longenbaugh roads in Cypress.


Darin Ward is a managing partner with HLBJ Development, the group behind an office condo called Offices on North Eldridge that broke ground in March. Ward said owning gives businesses more control over how their space is used. It also gives them a stake in the building, which gives them more of an incentive to help it appreciate in value.


Ward said many tenants that lease space from other HLBJ projects begin to express interest in office condos as they become more established.


“Many tenants and prospects along the way have expressed they would like to own rather than rent,” he said. “Most of the folks that are buying the buildings have leased for some time and have stabilized their business. They know what they need and might not plan to grow anymore.”


Offices on North Eldridge will ultimately be home to six office buildings ranging from 2,500-3,500 square feet and starting at $650,000—each built to suit the business that purchases, Ward said. He said the selling and build-out process would take one to three years.


Ward said office condos are ideal for smaller companies and can work for orthodontists, lawyers, oil and gas consultants, leasing firms, homebuilders, psychiatrists and insurance companies, among other types of businesses. They could also appeal to startup businesses or those who want to work in the same community where they live, he said.


“So many of our tenants don’t want to commute,” he said. “They want to own their own office in their own neighborhood—something a little newer, a little nicer and closer to home.” 


The cost associated with purchasing an office building can be similar to that of leasing one, Ward said. Once a down payment is factored in—which typically ranges from 10-20 percent—the monthly cost should actually be lower, Ward said.


As of Feb. 18, the average rate to lease office space in the Cy-Fair area was about $18.79 per square foot per year, according to data provided by Caldwell Companies from the commercial real estate firm CoStar Group Inc. A business leasing 3,000 square feet of space at that rate would pay about $56,000 annually.




“They want to own their own office in their own neighborhood—something a little newer, a little nicer and closer to home.”


— Darin Ward, HLBJ development managing partner



To help offset the cost of purchasing a building, businesses can also operate out of a portion of the space and lease the rest, Ward said.


Philip Hale, a partner with the Cypress Crossing Office Condominiums off Fry Road, said for many businesses, buying an office building is worth it in the long run.


“It’s the opportunity to invest in commercial real estate, and the barrier of entry in most aspects of commercial real estate is high,” he said.


Ultimately, the Fry Road project will consist of 13 total buildings, each with four 1,225-square-foot units that can be combined depending on tenants’ needs, Hale said.


Units include four offices, reception area, kitchen, bathroom and closet, but Hale said plans could be modified to accommodate various needs. Similar to the Offices on North Eldridge concept, a property management company picks up trash and maintains landscaping.


Hale said the units are designed for smaller professional firms. The development will not house retail or medical businesses, but Hale believes the location will appeal to local businesses.


“Looking at the demographics of the entire area, there’s a lot of activity going on and a lot of higher-income houses being constructed,” Hale said. “Fry Road is just a good booming area where our target market lies.”

By


MOST RECENT

Stein Mart stores, including those in the Houston region, may close as part of the company's liquidation process. (Valerie Wigglesworth/Community Impact Newspaper)
Stein Mart Inc. files for bankruptcy, launches store closing process

Stein Mart Inc. announced Aug. 12 that it had voluntarily filed for bankruptcy.

The facility in Tomball is being designed by Ziegler Cooper Architects. (Rendering courtesy Tomball Economic Development Corp.)
Karbach Brewing Co.'s Chris Juergen to offer brewery, restaurant in Tomball and more Houston-area news

Read the latest business and community news from the Greater Houston area.

County Judge Lina Hidalgo announced Aug. 12 a plan including best practices recommended for schools to open safely once the 2020-21 school year begins. (Courtesy Adobe Stock)
Harris County judge: Opening local schools will not be safe ‘anytime in the near future’

Judge Lina Hidalgo announced today a plan including best practices recommended for schools to open safely once the 2020-21 school year begins.

According to the report, 380,174 total COVID-19 cases have been reported in children nationwide as of Aug. 6, which accounts for approximately 9.1% of all confirmed COVID-19 cases in the U.S. (Courtesy Adobe Stock)
REPORT: COVID-19 cases in children increase by 90% nationwide in 1 month

As school district officials across the U.S. prepare for the start of the 2020-21 school year, 179,990 new COVID-19 cases were reported in children nationwide between July 9 and Aug. 6—an increase of 90%, according to a report compiled by The American Academy of Pediatrics and the Children's Hospital Association.

Houston-area home sales jump 23% year over year in July

July also set a record high median price for single-family homes, $271,830, a 8.7% year-over-year increase.

First Watch is coming soon to Towne Lake. (Courtesy First Watch)
First Watch coming soon to Cy-Fair area

The cafe offers classic breakfast items, such as omelets and pancakes, in addition to avocado toast, wraps, breakfast tacos, salads, sandwiches and fresh juices.

Harris County is exploring the creation of a new official in charge of elections, which would take effect Nov. 18, after the 2020 election cycle. (Graphic by Anya Gallant/Community Impact Newspaper)
Harris County moves forward with creation of elections administrator office

Harris County Commissioners Court is moving forward with the creation of an elections administrator office following the approval of a study Aug. 11.

The University of Texas will host football games at Darrell K. Royal Veterans Memorial Stadium this fall after an announcement from the Big 12 Conference on Aug. 12 that the fall sports season will continue. (Jack Flagler/Community Impact Newspaper)
After Big Ten and PAC-12 cancel, Big 12 announces fall sports season will roll on

The conference football season will begin Sept. 26, and fan capacity in stadiums will be up to each of the 10 member universities, according to the Big 12.

The facility in Tomball is being designed by Ziegler Cooper Architects. (Rendering courtesy Tomball Economic Development Corporation)
NEW: Karbach Brewing Co. brewmaster Chris Juergen to bring brewery, restaurant to Tomball

The facility will span 10,500 square feet and include a brewery, restaurant, and packaging and distribution space on 4.6 acres in the park with indoor and outdoor space for guests, according to the release.

With many school districts starting the school year remotely or offering remote instruction options for the 2020-21 school year, access to the internet and internet-accessible devices will be vital for educating amidst a global pandemic. (Courtesy Adobe Stock)
Harris County aims to end digital divide among students through new $32.1M program

More than 120,000 mobile hot spots and 250,000 devices will be distributed to students in need across Harris County due to a program unanimously approved by Harris County Commissioners Court on Aug. 11.

Aug. 11 was the second day in the row during which the total number of newly confirmed cases in Harris County was below 1,000. (Community Impact staff)
Harris County coronavirus count: 942 new cases, 20 deaths confirmed Aug. 11

As ICU occupancy has fallen, hospitals in the Texas Medical Center have been hovering around the threshold where surge capacity beds are needed.