Sales close on two Hamilton office buildings
Two Hamilton office buildings have found buyers in recent weeks amid increasing activity in the commercial property market.
Sales have closed on Hemisphere House and Dorchester House, both on Church Street, said Penny MacIntyre, a partner with Rego Sotheby’s International Realty.
Ms MacIntyre attributed the pick-up in the market to prices coming down to levels that match today’s economic realities.
“We’ve seen a lot of interest from serious buyers,” Ms MacIntyre said. “Some properties have garnered a lot of attention over the last three months and we’ve been receiving offers or have closed on some of them.
“It’s partly because the prices of these properties are being adjusted to market conditions, as owners have been getting serious about disposing of their assets.
“It does not do any good for these properties to be vacant for a long time, because when they’re not in use, they tend to deteriorate.
“We have seen a good number of these buildings repriced in line with the market and whenever you have sensible pricing, it stimulates activity.”
Many buyers were owner-occupiers to some degree, who saw advantages in owning and controlling their own properties, as opposed to paying rent and funding upgrades of a landlord-owned building, she added.
Hemisphere House was on the market for at least five years before its sale closed last month.
Ms MacIntyre said she was not at liberty to state the sale price or the identity of the buyer.
A five-storey 1960s office building standing on 0.15 of an acre, with about 25,000 square feet of space, complete with a penthouse added in the 1990s, it was listed for sale at $8.5 million in January 2013.
The price has come down several times over the years and it was last listed at $3.75 million.
Hemisphere House looks over Par-la-Ville Park and Ms MacIntyre said one of its advantages was the potential for mixed use, for example residential and retail components as well as offices.
The Progressive Labour Party government, which took power last year, has signalled its support for residential development in Hamilton.
In its manifesto for last July’s election, the PLP said it would incentivise the development of studio and one-bedroom apartments in the city, to create affordable homes for young Bermudians, create jobs and “bring new life to the city”.
Ms MacIntyre said city living appealed to many people, particularly those who wanted to downsize and spend less time on the road.
However, potential challenges for residential developers included competition from the condominium segment of the market, which has seen valuations fall amid an abundance of inventory.
The lack of parking space in the city was another challenge to address, although there was potential for underground parking at some sites, she added.
Dorchester House, a five-floor building at the corner of Church Street and Trott Road, with a total rentable area of 42,000 square feet, was put on the market in September, ahead of the departure of its anchor tenant PwC Bermuda to a newer space in Washington House.
The sale of the 1980s structure has just closed, Ms MacIntyre said. It was originally listed for sale at $3.75 million.
Another building that has attracted much interest is 87 Reid Street, the former home of Tribe Road Kitchen, which is on the market for $925,000. The property, at the junction with King Street, comprises a 1,280-square-foot cottage and a spacious lawn area that was utilised by guests of the former restaurant. A “handful of prospective buyers” and some rental interest had emerged for the property, Ms MacIntyre said.
Nearby 91 Reid Street, a two-storey, 11,538-square-foot building, is also on the market for $1.85 million. It comes with established tenants, including Sunnyroad Designs and Abacus, an accounting services firm.
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