Commercial condos grab their moment in spotlight.

This time last year, broker, Louis Puopolo, was putting together deals for multi-million dollar luxury condos where high-end finishes and amenities are often what make a sale.

Today, Puopolo's product has all the bells and whistles of those sought-after exclusive homes--the only difference is, he's selling office space.

Puopolo was tapped by Equinet Properties earlier this year to oversee sales and marketing efforts for Greenpoint Lofts, the first exclusively business condominium development in Greenpoint, Brooklyn, where amenities such as a rooftop terrace, fitness center and even a meditation room are expected to attract a growing number of firms and organizations looking to invest in the real estate they occupy. With 68 units ranging from 600 to 1,150 s/f priced from $295,000 to $570,000, Equinet is primarily targeting two types of buyer, smaller medical, architectural and design-type firms, and larger Manhattan-based firms perhaps looking to create satellite offices for support staff, such as IT professionals.

"We are not looking for one type of company, but firms that are interested in being owner/ occupiers in Brooklyn," said Puopolo.

"Geographically, we are smack, dab in the center of Brooklyn and well positioned for future commercial and residential development here.

"We believe that the building will be an anchor in the community as a business center that attracts more professionals to the area, contributing to the positive growth of this emerging neighborhood." Over in Chelsea, the nearly completed Chelsea Arts Tower has already made something of a big splash in the commercial condo sales market.

Marlborough Gallery recently closed on a $9.15 million deal for the first and second floors, and Calvin Klein paid $4 million for his new office on the 18th floor of the 20-story building developed by Young Woo Associates and Jack Guttman.

Alan Weisman and Stuart Siegel of Grubb & Ellis are the exclusive sales representatives for the tower which, according to Siegel, has only seven floors left to close on, three of which are already out to contract.

"It has been terrific," Siegel said of the response to the building. "Chelsea is one of the hottest parts of the city right now, but for a user to buy there it is virtually impossible."

Like Greenpoint Lofts, much attention has been paid to the needs and wants of potential buyers--in this case, primarily galleries who seek good UV protection for their artwork, floor to ceiling windows, high ceilings, increased weight capacity for freight elevators and a building with aesthetic appeal.

With floor plates from 3,500 to 4,100 s/f and prices starting at $2.8 million, the deal is making sense to many buyers.

While initially sought after by galleries priced out of their Soho rentals, the building has recently seen a surge of interest from a variety of tenants. "From a financial standpoint," Siegel explained, "you get to deduct the interest on your mortgage payment, deduct real estate taxes and deduct depreciation of the cost of the unit. "Those are the more tangible benefits, but you also get the piece of mind of knowing your costs are going to be fixed indefinitely if you have a fixed rate mortgage and that your landlord can't kick you out when your lease is up or there's a change of use for the building."

While commercial condos are nothing new to the market, they have failed to take off in the city in the way that so many have predicted over the years.

"The trend never really took off in Manhattan because the primary tenant base is large space users who don't want to buy 10,000 s/f if they are going to be occupying 20,000 s/f in a few years," said Richard Baxter, executive director of the New York Capital Markets Group at Cushman & Wakefield.

He cited the Delmonico Plaza on East 59th Street as among the handful of commercial condos that have been successful, particularly with nonprofit groups and foreign governments who find ownership a more efficient form of occupancy because they don't have to pay real estate taxes.

Built by the Zeckendorfs in the 1980s, the 300,000 s/f Delmonico indeed broke new ground in the market and, Baxter concluded, could be a model that may see some resurgence in popularity if prices in the office rental market continue to increase as dramatically as they have over the next few years.

"It may become a more common form of ownership, particularly among medical professionals who have high installation costs and tend to stay in place," said Baxter. "And ownership is good for firms whose growth is predictable and is limited and for nonprofits and government entities not paying real estate taxes."

With rents exploding across the city, many developers believe the market is finally ripe for the commercial condo boom so-long promised.

The trend towards commercial office ownership by non-profits-many of whom have astute real estate investors sitting on their boards--is a national one. Locally, the migration of the arts community to supplement financial services and the revitalized residential development in lower Manhattan is also growing.

Time Equities, the privately held real estate firm that owns nearly 20 million square feet of office, industrial and retail property throughout the US and Canada, has just announced plans to convert its 17-story 125 Maiden Lane tower to a commercial condo--at least in part. "From our experience, in New York there is a very strong appetite to own commercial condos that is here to stay," said Michael Rudder, director of office leasing and sales at Time Equities.

"We see real value here because buying protects a company's future. Historically, space in Manhattan is one of the biggest issues firms face. A lot of companies have already suffered recently because of residential conversions--being able to secure your future by owning your *pace is a real asset, not just in monetary terms."

Time Equities had been operating 125 Maiden Lane as a traditional office rental since buying the building in 1999, when its main tenant was the legal behemoth, Cadwalader Wickersham & Taft. The law firm owned the neighboring 100 Maiden Lane and leased a further 100,000 s/f at 125. When they decided to sell their own building to a developer for residential conversion, Cadwalader also vacated their leased space to move to a new home at Brookfield's One Financial Center.

"Cadwalader vacating and a couple of other tenant leases ending put us in a good position," said Rudder. "Knowing we were getting half the building back, we were able to consider a lot of different options."

The firm went as far as having residential conversion plans drawn up for the building but, in the end, decided to go the route of office condo mainly, according to Rudder, because it saw an opportunity to tap into a highly under-served market.

"Time Equities is one of the bigger firms to now get involved in developing first class commercial condos that will overtake the primarily Class C offerings that proliferate the market right now," said Rudder.

Indeed, being able-to provide floor plates from 18-25,000 s/f at prices ranging from $350 to $425 psf, Time expects to have a tremendous advantage in attracting mid-size firms looking to own Class A office space.

The company is targeting larger firms that aren't quite big enough to own a building but are seeking an opportunity to buy into the city's real estate market.

Since gaining approval for their offering from the Attorney General's Office three months ago, Rudder said the offers have poured in for around 400,000 s/f of space at the asking price. The usual suspects cited by Richard Baxter, such as non-profits and government agencies, are showing high interest and, according to Rudder, several financial firms, lawyers and insurance companies have been intrigued by the economics of the deal.

According to Bruce Sinder, president of Sinvin Realty, a company that has built a track record for handling commercial condo sales in the downtown and midtown markets, commercial condo ownership is probably one of the best investments an entrepreneur can make in the Manhattan market right now.

"It makes sense from so many different aspects," said Sinder. "It has been a small market up to now because landlords haven't been offering their product in that form but, whenever there is a chance to purchase product, there are many buyers out there."

In the past two years, Sinvin sold out the mixed used 145 Hudson Street, where commercial units from 1,200 to 5,000 s/f in the lower floors were fetching up to $650 psf.

"When you do a side by side analysis of rent versus buy, it always seems more expensive to buy but, in the long run, owning a piece of real estate in Manhattan has always had long-term benefit."

The flexibility restrictions that may have been seen as a stumbling block to the sector in the past are also fast changing. "Renters that have been in the market for five or ten years are being told their rent has to double, or that they have to relocate because the building is being converted for residential use or another tenant needs to expand. All this is providing incentive for more people to buy," said Sinder.

"Contrary to common wisdom that there's less flexibility if you own rather than rent, all of those same restrictions can and do occur in a leasehold scenario and, in today's market, you often have less flexibility [if you rent]."

The Chelsea Arts Tower developers are already planning their second as-yet-unannounced commercial condo in the city and Time Equities is exploring opportunities to not only convert some of its existing assets, but to also purchase more properties for conversion. It already has 60,000 s/f of the available 170,000 s/f for sale at 125 Maiden Lane out to contract and, said Rudder, "We certainly don't think this is a one shot deal. We think it's a real trend here to stay.

"We have had such a tremendous response to our offering we are looking for more opportunities to purchase and covert properties to office condos."

Retaining ownership in half the building should give Time further credibility as, Rudder explained, "Since we purchased the building, we have added many amenities like a fully landscaped roof deck, fitness center, 24/7 lobby attendant, rotating lobby art exhibits and all of the floors have high-end installations

"We will continue to operate the building--we are not trying to convert it, sell it off and wipe our hands clean, we will be taking care of our investment while offering buyers a tremendous alternative to leasing in this rising market."

And, depending on the success of the venture, Rudder said Time will determine what do to with space that becomes available as the leases of sitting tenants expire.