Have you noticed how many office condo projects there are right now in or near The Woodlands?! It’s incredible:
– 1) Forest Ridge Office Condos (behind Hubble & Hudson Kitchen)
– 2) Brownstone Office Condos (on Budde road)
– 3) Woodlands Office Project (on Budde road right next to the Brownstone project)
– 4) Grogans Ridge Office Condos (on Sawdust)
– 5) Ashlane Condos (on Ashlane Way next to library & opposite YMCA)
– 6) Hannover Park Office Condos (on FM 2920 not far from ExxonMobil)
These are office condos that you could buy & either use it yourself or lease it out as an investment. Other smallish office projects are the office building they’re putting up close to Olive Garden on the West side feeder of I-45. Also, “Evergreen Suites” (now renamed to “The Woodlands Office Suites”) has decided to expand their offering by an additional 17 suites that will be available from January 2013.
Pricing for Office Condos in The Woodlands TX:
– Forest Ridge Office Condos: from $204.08 (website)
– Brownstone Office Condos : quoted $206.52 p/sf (Oct. 2012)
– Ashlane Condos (pricing coming soon)
– Grogans Ridge Office Condos: $203.18 to $208.08 p/sf
– Woodlands Office Project: (pricing coming soon)
– Hannover Park Office Condos: $200 p/sf (brochure)
The smallest condos are in Ashlane at around 1,000 sf. The Forest Ridge & Grogans Ridge condo projects have a 1,225 sf version which is a very nice size. But, if you want you could combine the units so you could get 2,450sf or 3,675 sf or even a complete stand-alone building with 4,900 sf!
So…. if you could still buy one, a Forest Ridge office condo would be roughly $250,000. But… they’re all sold out!
A good strategy
If you’re thinking of branching out on your own and getting an office, here’s a good strategy…. lease one from an investor (they go for about $2,500 per month) and then sub-lease the individual offices to your associates. I’ve heard that individual offices go for anywhere from $700 to $800 per month. Each 1,225 segment typically has four offices. So, if you lease out three of them for $700 per month for a total of $2,100 then your cost would be $400 per month + utilities which you would probably split as well.
For some professions (mostly sales people), they don’t really need an office all day long… they really just need it for a few hours a day, sometimes only a few days a week. So, if you had enough associates that could join you you could even have six or seven people working out of a four-office unit! With today’s wonderful technological solutions you simply have to get a good reservation system:
– Workspace Manager : web-based application to book desks, rooms, parking spaces
This would bring everybody’s cost down (or your cost down to $0.00!). To really make it attractive…. get a receptionist to answer everybody’s calls and take messages, handle the FEDEX packages & so on and set up one of the offices to double as a conference room. This would look very impressive for visitors and when nobody’s using the conference room simply use it as an office!
This is a Hot Market!
If you’re an investor, these properties can be good investments if you buy in the right development. The demand for this type of produce is really hot right now. I personally just tried leasing out a complete unit in the Forest Ridge Office Condo development and was competing for it against three or four other people!!! I lost the deal. The eventual winner put in a bid for a 5-year lease with rents increasing by $100 every single year. So… tough to compete against that!
Also, the Grogans Ridge Office Condo project (same developer as the Forest Ridge Office Condos) has not even started building yet (last time I looked a few months ago in September 2012) but today (30 November 2012) I hear that they’ve already pre-sold 18 units!!! That’s just amazing.
Also, Evergreen Suites (or The Woodlands Office Suites as they now like to be called) are building a great business leasing out office space / flex office space and various answering service / mail collection services and so on that they’ve decided to expand their offering by an additional 17 suites. This can be very good business. Small office space rents for quite a bit per square foot compared to leasing out to a single large client. Just ask Regus! This UK company would not otherwise have grown into $1.86B USD of (profitable) sales.
The Future of the Office Condo Business
I don’t think we’ve seen even close to the peak of this business yet. ExxonMobil with it’s 10,000 to 12,000 employees have not even started moving in yet and already The Woodlands is exploding with development. The Woodlands currently has five out of the top 15 “significant projects under construction in Houston with Energy Tenants” that are not completed yet (just notice all the cranes as you drive around The Woodlands). So, the demand is only going to increase. I think we could easily double the office condo projects that we have now and still be fully leased.
So…. if you’ve been thinking about getting yourself an office condo and you see something you like, don’t think about it too long… it might not be available the next time you check on it.
Lance Langenhoven, CCIM