Both developers and investors have been hot to trot on the condo conversion trend. In fact, I probably hear from a new one at least once a month, or at least that's been the case since January of this year. The standard property sought is something with 200 or more units and that's easy to convert, or less if the property is waterfront or in a prime location. From Class A apartment complexes to Class C apartment complexes, investors and developers want to convert them. Everyone knows they're hot, including the Tampa Tribune:
Making The SwitchIn most cases, turning an apartment into a condo consists of installing new carpet and changing the sign out front. Some developers make cosmetic changes, such as upgrading appliances, replacing Formica counter tops with granite and trading in laminate cabinets for wood.
However, there are key differences between apartments and condominiums when it comes to original construction. Apartments typically have thinner walls, lower quality insulation and smaller separations between floors, builders say. Condominium builders typically cater to buyers who would turn up their noses at lower quality materials.
Some developers and engineers say such differences keep apartments from ever truly becoming condominiums.
Where the two kinds of units don't always differ significantly, though, is price.
``You don't want to pay premium for something that isn't premium,'' said condominium builder Brooks Byrd, of the St. Petersburg-based Byrd Corp. ``The apartment conversion is such a new phenomenon in our area that people don't really understand what they're buying.''
This year, more than a dozen apartment complexes in the Tampa Bay area have announced plans to convert, and many more owners say they are thinking about it.
Tom Senkbeit, chief investment officer of Post Properties, which is converting one of its Hyde Park complexes, said the market is right for conversions.
With interest rates low, many of Post's tenants are considering buying a home. Post saw an opportunity because many of its properties are located in high-demand, urban areas, Senkbeit said.
Apartments aren't built as well as condominiums, he admitted, but newer apartments are typically built well. And conversions provide housing in neighborhoods that would otherwise be unattainable to some buyers, he said. People who can't afford a home in Hyde Park, for example, might be interested in a Post apartment priced at $150,000 to $300,000.
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Article comments
1 - Scott Schrantz
There are no less than eight condo conversions happening in downtown Reno, Nevada right now. All the closed casinos are being bought, and their hotel towers turned into condos. Nobody's paid this much attention to downtown in 30 years!
Read about the condo rush here.