Stores and other commercial businesses on the ground floor of an apartment building are a tradition in big cities. By contrast, when one looks at the typical suburban condo development, one must go to another location to shop—maybe to the mini-mall down the road. But in many New England condos, stores may often be found on the ground floor—supermarkets, restaurants, drugstores, clothing stores and more. Sometimes you’ll also find doctor’s or dentist’s offices.
Why are businesses seeking out space in condo buildings? A report by Banker & Tradesman, a Boston-based financial newspaper, says that prices for condo sales in Massachusetts rose by 11 percent in the last year, with many industry pros speculating that a high demand for condominiums may be the driving factor of the price increase. With more residents moving into condominium communities, retailers are looking to attract and expand business.
Glenn Montgomery, vice president of Brownstone Insurance in Norwell, Massachusetts, whose company insures more than 3,000 condo associations, observes that many buildings are converting space for commercial usage, to accommodate this growth in demand.
The relationship between the condo and the ground-floor business tenant is a complicated one. Having these stores on the ground floor is often seen as a plus by unit owners. But for management, it can raise questions from legalities to liabilities.
Desirable and Undesirable
What kind of business is the ideal commercial tenant? Answers vary and can depend on the building structure as well as the demographics.