Coral Gables, Fla.-based Bayview Financial purchased 185 Devonshire St. in Boston’s Financial District and converted it into 30 office and three retail condominiums. Thirty percent of the condos have been sold.

With office rents skyrocketing, vacancy rates declining and premium office property a scarce commodity, Boston is seeing a quiet resurgence of office condominiums. If current trends continue, many small-to-mid-size businesses may opt to buy their own office space and, for many of them, office condominiums in premier locations are the only way to go.

Coral Gables, Fla.-based Bayview Financial, one of the nation’s largest full-service real estate investment, finance and development companies, is the first developer to successfully test the office condo market in Boston since the 1980s. After purchasing 185 Devonshire St., an 80,000-square-foot office building in the heart of Boston’s Financial District in late 2005, Bayview recently completed conversion and renovation of the building into 30 office and three retail condominiums. This is the first office condominium project in Boston since the 1980s, and about 30 percent of the condo spaces have already been sold.

There are numerous advantages in owning an office condo versus leasing one. First, owning stabilizes expenses by locking in occupancy costs, provides financial freedom and has the potential to drastically increase one’s net worth through the appreciation of real estate. Second, there are tremendous tax advantages of owning real estate, instead of leasing and paying rent to a landlord. Lastly, buying a condo is less expensive and risky than buying an entire building.

Moreover, buyers of office condos are tenants who are looking to control their occupancy cost over the long term, rather than be caught in the unpredictable swings of the leasing cycles. In almost every case, the firms are closely held by a few individuals who are also looking to acquire an appreciable asset in downtown Boston Â… at an affordable price. Additionally, small investors interested in owning office space as a long-term investment and rental vehicle are showing interest in buying blocks of space.

Even though most of these prospects are occupying space in the downtown market, the property at 185 Devonshire is experiencing a surge of activity with firms from the suburbs. The Boston office market is heavily comprised of office-users, who typically occupy less than 8,000 square feet. The facility at 185 Devonshire speaks well to that audience by offering a variety of units ranging from 1,100 square feet to 6,300 square feet, and everything in between.

“We’re very excited to buy one of the first office condominiums at 185 Devonshire St. in Boston,” said Gerry D’Ambrosio, principal of the eight-attorney D’Ambrosio Law Offices. “It was a no-brainer when it came to buying our unit there. It’s located right in the heart of Boston and its proximity to the public transportation system and major Boston landmarks are an added bonus.”

D’Ambrosio, whose firm bought a 3,200-square-foot unit at 185 Devonshire St. in July for $1.1 million, said buying an office condominium provides more benefits than leasing one. “It made a lot of financial sense to us,” D’Ambrosio added. “Instead of paying rent, I will be paying the mortgage and after 15 years I will own it. This idea is wonderful.”

Rare Opportunity

Bayview Devonshire, a wholly owned subsidiary of Bayview Financial, purchased 185 Devonshire St. and has invested more than $3 million to turn it into as many as 30 office and three retail condo units, hoping to replicate earlier success it enjoyed with similar projects.

“We think the time for office condominiums has come for this market,” said Robbie Oppenheim, managing director of Bayview Financial. “Office ownership is a very attractive option for businesses that want a prominent Boston location but are weary of the already high and rising rental costs.”

The last office condo in Boston dates back to the 1980s, when a Federal Street building was divided up and sold to various tenants.

With premium commercial property already a scarce commodity in Boston, and with office condominiums virtually non-existent, Oppenheim is confident that potential buyers will see 185 Devonshire as a rare opportunity to own prime space in one of the city’s most coveted office locations, the Financial District.

“Besides offering businesses the unique chance to own a piece of Boston, we like the property’s proven location in the center of the Financial District, and think it will have great market appeal to businesses who want to control their own destiny through ownership,” said Oppenheim.

To turn their investment into sales, Bayview has retained NAI Hunneman Commercial, a Boston brokerage firm, as the exclusive sales agent. Together, they are marketing the office condos, known as 185 Devonshire, to small and mid-sized companies as an alternative to paying office rents that, according to many analysts, are set to soar as vacancy rates continue to fall in Boston. According to a recent NAI Hunneman market report, the downtown Boston office market has continued to tighten, with overall class A and B vacancy decreasing by 20 basis points to 9.1 percent, while rental rates have increased significantly to an average of $43 per square foot. Proposals for high class A space in the Financial District and Back Bay neighborhood are asking up to $75 per square foot. Considering those trends, downtown Boston has truly become a landlord’s market.

The property at 185 Devonshire offers an exciting opportunity for small and midsized firms to own space at a building that has a superior Boston location, turn-of-the-century charm and all the latest amenities. The location already has attracted great interest from privately held businesses in the legal, consulting and service-based sectors. The majority of users in the downtown market are small players who have been looking for an opportunity like this for some time.

According to Oppenheim, 185 Devonshire offers a lot more than just a prestigious address, pointing out that it is accessible to all MBTA subway lines, multiple public parking facilities and is within walking distance of Boston landmarks such as Faneuil Hall Marketplace, Downtown Crossing and Boston Common. He also added that the day-to-day operations and maintenance of the building will be provided by professional on-site management, allowing owners to focus on their business.