With remote and hybrid work arrangements increasing for employees, some Texas employers are looking to or have already downsized their office space.
This scaling-back trend is happening at a time when the commercial real estate (CRE) market continues to be white hot in Texas as more companies relocate to the Lone Star State.
The transition to smaller working spaces may present an opportunity for business owners and CRE investors in the form of an Australian import, so-called commercial condos by XSpace.
Multi-functional professional and personal accommodations
XSpace, not to be confused with Elon Musk’s SpaceX, offers an updated version of the commercial condo concept that has been around for over two decades. The first Texas unit in downtown Austin is nearing completion, featuring office space, showrooms, personal living quarters and many other functions.
The Austin commercial condo has more than 100 units ranging from 300 to 2,500 square feet. The facility offers a commercial-grade community kitchen and a large lounge perched above Lake Travis. The property tries to appeal to buyers by providing both business and personal amenities.
Texas is the first U.S. stop for this renewed concept
XSpace is already poised to make inroads in Texas’ booming real estate market. Collier’s Global Investor Outlook ranks Dallas as the No. 1 CRE investment market for 2022, with San Antonio at No. 10. Houston is also high on the list after recording the largest volume of CRE sales in the U.S. during the third quarter of last year.
Commercial condos are an attractive option to some companies that would rather own office space and no longer rent. But experts say CRE investors are also showing keen interest. Some are avoiding capital gains taxes by doing 1031 exchanges using proceeds from the sales of other investment properties into these versatile and attractive spaces.