Tarragon Realty to Convert $64 million Ft. Lauderdale Apartments to Condo

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Tarragon Realty to Convert $64 million Ft. Lauderdale Apartments to Condo
March 08, 2006
By Hortense Leon, Southeast Correspondent

RAM Development Co. has sold apartment complex The Promenade at Reflection Lakes to Tarragon Realty Corp., a condominium converter, for $64 million. The four-year-old, 360-unit, luxury, garden apartment complex in Fort Myers, Fla., went for $177,778 per unit. The Florida office of Apartment Realty Advisors represented the owner.

The price per square foot that Tarragon paid for The Promenade was close to a record high, Apartment Realty Advisors senior vice president Kevin Judd told CPN.

Though Fort Myers, Naples and some parts of Jacksonville are still going strong, the number of sales to condo converters is not as strong as it was six months ago, he said, adding that Fort Myers was one of the last areas that converters looked to for condo conversion candidates.

One indication of a slowdown in the condo conversion market, Judd said, is that fewer people are buying the converted units. But the upside of that trend is the strong interest today among income buyers-those who want to operate the properties as rental apartments, he said.

"They've been there all along, but they couldn't pay the prices that condo converters were paying, so they had backed off," Judd said. Today, prices have come down slightly.

"Six months ago, there might have been a 30 percent difference between what income buyers paid (for apartment buildings) versus converters," Judd added. "But as the condo conversion markets have cooled and the rental market has become hot, that difference is minimal."