Rondos

A home that's not a house

Low interest rates have brought about a new species of living spaces: the rondo.

It's a special name for a rental apartment converted into a condo.

And, if you haven't noticed, they're everywhere.

With costs ranging from $130,000 to $210,000, these 700- to 1,300-square-foot domiciles are quickly becoming the home purchase of choice for today's young adult.

"The conversions for the past 24 to 36 months has been on an increase, as have the number of new condos," said Rudolph Prinz, with the state of Florida's Office of Land Sales. "You can pretty much link it to low interest rates."

In Hillsborough and Pinellas counties, some 2,600 apartment units became condos in the past year. Experts predict this year's conversions to figure in at 3,000. People buy these smaller homes because they don't want the suburban lifestyle, but also can't afford to buy a larger house within the city center, according to Realtors.

For developers, it's often cheaper to convert than to build new, said Rosalind Sedacca, with Audubon condos in Pinellas County's Feather Sound area.

"When a developer finds a community in a wonderful location, it really makes more sense to either convert and remodel or do a gut renovation and rebuild on the site," she said.

The 307-unit place sits near the bay, just seconds from Interstate 275, a Publix, a hospital and the Carillon office park. Developer Ceebraid-Signal Corp is even installing elevators for the three-storied property.

But that's nothing compared to the company's other rondo property, located in Tampa: Beachwalk.

Located near Rocky Point, Beachwalk plans a rock-climbing wall, free golf lessons, virtual golf, a boardwalk over a nature preserve and a community wine cellar. Prices range from $140,000 to $190,000.

The Fountains at Countryside in Clearwater, is also selling a complex amenities package that includes a butterfly garden. Atlantic American Realty is gutting every apartment and replacing the plumbing and air conditioning for homes ranging from $105,000 to $157,000.

The complex's construction includes sound-numbing firewalls between units, said Debra Koehler, president.

"Others are just slapping on paint and carpet and they're not replacing the air conditioning unit," said Koehler. "You get an old apartment. We're trying to set ourselves above everybody else."

When communities go rondo, developers must follow rules set by the Florida Statutes, including sending notice to current renters and allowing the renter to buy the unit at a regular market price.

Structurally, there isn't much difference between a rondo and a condo. Hearing your neighbor's television set is due to construction quality, said Marc Rosenwasser, vice president of Meadow Wood Property Company, who manages 10 central Florida apartment complexes.

The rondo market blew up in 2003, said Rosenwasser, who oversaw the sale of La Plaza del Sol, which was converted into the Sienna Villas off Kennedy Boulevard in Tampa.

"There are very few areas available for new construction ... the only possibilities are to buy apartments and convert them," he said.

Villa Sonoma, near Tampa's International Plaza, doesn't offer golf lessons or wine cellars. The location and construction is enough.

"We've sold 60 percent in just eight weeks," sales manager Michael Caggiano said.

Questions to keep in mind

Before you plunge into the new world of rondos, consider these:

- How much is the monthly maintenance fee? What does the fee cover?

- Will you stay longer than two years? (Stay less and you could face a penalty for selling)

- Will the homeowner's association allow you to rent out your new home?

- What amenities are available, and when are they available?

- Is it possible to add soundproofing to the walls and ceiling?

- What kind of insulation is being placed in the roof? (R-18 and higher is pretty good. Anything less and, if you're on the top floor, you might lose all of your air conditioning out through the roof.)

- Are there firewalls between each unit?

 Rondos rising throughout Tampa Bay

Land is scarce throughout Florida's Tampa Bay area, and that combined with it being a popular place to live during an era when owning your own home is popular, and fairly easy to do with interest rates at all-time lows are some of the reasons for the rising rondo, or condo-conversion trend. Rondos are created by converting an apartment into a condo, which is deeded then sold by a developer. Because the overall cost of converting an apartment building or apartment complex into condos is less expensive than developing fresh, new condos, condo-conversions have become both popular and profitable for developers. In fact, a developer contacted me just last week about doing a condo-conversion and an associate and I are currently working to secure a site for his project.

Five percent of Tampa's apartment stock and 11 percent of Pinellas' have or are expected to "go rondo." That's about 10,300 conversions since 2003.

Like a single family home, a rondo's pull comes down to location, price, amenities and quality. That's why Atlantic American Realty Group snagged the Cloisters apartments (now Fountains at Countryside), just north of Westfield Shoppingtown Countryside. Built in the 1980s, the 168-unit complex has concrete firewalls between some units.

Each unit is gutted. All pipes, flooring, air conditioning and kitchen equipment are replaced. A butterfly garden, Pilates room and 11-person jacuzzi are planned.

Prices range from $101,500 to $157,000 -- far lower than $167,000, the median single family home price for Tampa Bay. Forty-one units sold in three weeks.

Villa Sonoma, near Tampa's International Plaza, doesn't offer golf lessons or wine cellars. The location and construction is enough.

"We've sold 60 percent in just eight weeks," said Michael Caggiano, sales manager.



Yes, converting apartments into condos is both profitable and popular for developers, and in most cases it makes upscale living more easily attainable at lower prices. We're not making our developer-client's project public yet, as we have yet to secure the site for it, but you can still
contact me now to get more information on a luxurious new rondo at below luxury prices (usually under $200,000 - depending on location), or ask to receive information on our client-developer's project when information is available. Some of the nicer condo-conversion projects around Tampa Bay are Itopia, the Waterford, the Audubon at Feather Sound, the Fountains at Countryside and The Beacon in downtown St. Petersburg. For more condo-conversion news, check out this recent article from the Tampa Bay Business Journal. As more apartments are converted to condos, experts expect rents to rise. However, with apartments being sold to developers for condo-conversion purposes in large numbers and with apartment companies converting their own apartments into condos, you just have to wonder if the days of profitting from renting property to tenants are over here in Tampa Bay.

 

 Now he owns it.

Madio, who lives in the Audubon Condominiums in the Feather Sound, Fla., area, is one of thousands joining the nationwide trend of buying into "rondos," or rentals converted into condos.

Rondos are a cheaper and better located option than single-family homes in Pasco County, said the 72-year-old insurance agent.

"The only reason I was thinking about (buying) was because the interest rates were so doggone attractive," said Madio, a 15-year renter. "I have a garage, an end unit with a balcony and a fireplace, two beds, two full baths and my own private entrance overlooking the golf course."

He is seconds from Interstate 275, across the street from a Publix, near a hospital and in a community where the developer throws New Year's Eve parties for residents.

All for $169,000.

Five percent of Tampa's apartment stock and 11 percent of Pinellas' have or are expected to "go rondo." That's about 10,300 conversions since 2003.

Like a single family home, a rondo's pull comes down to location, price, amenities and quality. That's why Atlantic American Realty Group snagged the Cloisters apartments (now Fountains at Countryside), just north of Westfield Shoppingtown Countryside. Built in the 1980s, the 168-unit complex has concrete firewalls between some units.

Each unit is gutted. All pipes, flooring, air conditioning and kitchen equipment are replaced. A butterfly garden, Pilates room and 11-person jacuzzi are planned.

Prices range from $101,500 to $157,000 -- far lower than $167,000, the median single family home price for Tampa Bay. Forty-one units sold in three weeks.

Villa Sonoma, near Tampa's International Plaza, doesn't offer golf lessons or wine cellars. The location and construction is enough.

"We've sold 60 percent in just eight weeks," said Michael Caggiano, sales manager.

Some conversions are expensive, depending upon location. At the "15 minutes from downtown Tampa" Waterford Luxury Condominiums in Palm Harbor, 1,000-square-foot one-bedrooms start at $150,000. Other models cost up to $237,900.

Renovation and construction prices add to the cost of the home -- sometimes. Waterford, formerly the Essex Luxury Apartments, is two years old, so there is no need for new appliances or to upgrade anything, said Jon Preciado, sales manager. Eighty of the 170 "as is" units have been sold.

Still, not everyone is convinced rondos are a good investment. For one, the units might flood the market, causing a drop in prices and reverting unsold communities into half-rental/half-owner.

Others don't think it's wise to spend upward of $130,000 on a tiny apartment with no garage.

"The prices are insane," said John Boitano, 60, one of a handful of renters still living at the Cloisters/Fountains at Countryside. (Conversion developers are required by law to allow existing residents to live out their lease.) "If you're going into the $150,000 range, buy yourself a home and get the land."

Some buyers also worry about sounds traveling through walls, inefficient windows and roaches from neighbors.

Preciado suggests buyers get a home inspection and read the condo documents -- which include maintenance fee information.

"In every condo conversion I've seen, ultimately you're at the mercy of the original builder," said Preciado. "We have cinder block and some framing (but) unless you have separation between the walls, you're going to hear something."

GULFPORT - With an array of potted plants and white patio chairs, this pink porch is going to be missed.

Margaret Padula, 85 years old and a tenant of Pasadena Golf Club Apartments since 1974, said she planned to live the rest of her life lounging on the third-floor perch that overlooks the Pasadena Yacht and Country Club golf course.

But a change in the property's ownership has upset her plans.

The Winter Park developer who bought the apartment complex last month intends to transform the two pink buildings into condominiums.

Once home to retirees and Stetson University law students, the 140 units off Gulfport Boulevard are among a growing number of local apartments being converted to condos.

PAC Land Development bought the property for $10.8-million in early April, according to the Pinellas County Property Appraiser's Office, and renamed it Golfview Condominiums LLC.

 

"It's probably the best building I've looked at in Pinellas County," said Tom Settle, a partner at PAC Land Development. "It has a location that is desirable as any." The complex is on a golf course, across the street from a law school and within walking distance of several shopping centers.

The $5-million renovations began almost a month ago, as workers ripped up old carpets and knocked out kitchen cabinets, said Jim Zumwalt, owner of Rowe & Newberry Inc., the project's general contractor. Another subcontractor is treating the building for asbestos found in the ceiling.

After the rooms are gutted, plans call for new air conditioning units, tile flooring and carpet and kitchens with wooden cabinets and granite counters, Settle said.

The dimensions will remain about the same, from 715 to 1,200 square feet.

Additional landscaping and some masonry work are expected to spruce up the building's 1970s exterior and "give it some charisma," Settle added.

The units have not been priced yet, but the new owners expect them to be less than the new Sun Ketch Townhomes, just east of the apartments, which are selling for about $300,000.

Residents should be able to move in by Thanksgiving, PAC Land Development representatives said.

Zumwalt said this is one of many condo conversion projects he has overseen in the past year. "We've done a couple hundred units," he said. "Anywhere from Ocala to Cocoa Beach to St. Pete."

Local developers and real estate agents agree the condo conversion craze is a recent phenomenon, a result of historically low interest rates and a lack of land. The condos also profit the developers, with one-time sales in the hundreds of thousands, as opposed to a myriad of monthly rental fees.

This area is a good market for it, said Jack Powell, chief executive officer of Marie Powell and Company in South Pasadena. Developers are vying to bring more families and business into the community with these types of affordable housing.

Recent conversions include the Beacon on Third condo - formerly the Carlton Towers apartment building - and the Madison, both in downtown St. Petersburg.

Powell is also working on several condo conversion projects on Treasure Island.

While developers praise the conversion concept, apartment tenants such as Padula call it "greed."

Because of the renovations, she and a hundred others have to find new homes. None of the tenants have offered to buy the new units, Settle said.

Tenants were notified in letters on April 6 - two days before the property changed hands - and have at least six months to move out.

Dozens are already gone, she said, angered by the abrupt notice and noisy construction.

"They're doing everything they can to evict us without throwing our stuff out the window," said Adam Rubenfield, 26, a law student and three-year tenant of the complex.

Rubenfield - whose lease expires in August - wrote letters to the new owners requesting a reduction in his $725 monthly rent after he was awakened several times by jack hammering at 7:30 a.m., he said.

Settle said he has received noise complaints from tenants but said reduced rents have not been discussed.

Padula isn't asking for a reduction in rent; she just wants to move out.

"I'm looking forward to getting out of here," she said. She bought a two-bedroom condo at Town Shores of Gulfport, a few miles away.

"It won't be quite like this has been," she said. "But I won't be renting again."

 

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