Converters Leaving Market Without Much Pain
Eighteen months ago, apartment complexes were being snapped up at record pace by condominium converters. But in less than two years, the news focuses on what local experts have dubbed “reversions”–condo conversion complexes being brought to the sales block as income-producing properties.
Unlike other markets experiencing condo retreats, local experts say Phoenix converters aren’t losing too much in the process. Just recently, the 272-unit Laguna Hills at 4800 S. Alma School Rd. in Chandler brought in $38.5 million or $2.6 million more than SunVest Communities LLC had paid in early 2006. The Hallandale, FL-based company had invested $1 million into conversion upgrades when it decided to back down on the plan.
“We haven’t seen one sale that has yet traded for less than what was paid for it,” says Brad Goff, principal with Apartment Realty Advisors’ Phoenix office, who partnered with colleague Bret Zinn to negotiate the Laguna Hills transaction. “The rental market is bailing out the condo converter.”