A Condo Coversion Success Story in Orlando

There’s been a lot of news recently on the conversions of condominums to apartments and the affects this process has on affordable Florida home loans. More and more, Florida home loan lenders have grown cautious over the growing numbers of these projects.

Scott Podvin, however is an example of a real estate developer that gets it right.

His first condo conversion project in east Orlando was one that worried possible investors and lenders who didn’t know how the project would be received. But Podvin, a third-generation developer of condos and resort properties worldwide whose roots reach deep into the Florida condo-hotel business, saw an opportunity.

The 38-year-old bought the former Brittany at Waterford Lakes, a 276-unit apartment complex in Orlando, in June 2005.

“I saw a hot real estate market at its peak and wanted something pre-built that could start selling right away,” says Podvin, president of Podvin Development Group.

Now, Podvin has his eye on 10 other possible condo conversion projects, including another east Orlando project he hopes to secure by the end of this year. He says he’s also interested in entering MetroWest, Boca Raton, Palm Beach, Bonita Springs, Sarasota and Tampa.

A real estate development background

In 2005, the Podvin Development Group was formed. After landing a $28 million loan from Chorus Bank of Chicago, Podvin and three partners - including Ford Barton of Choice Hotels - bought the Brittany at Waterford Lakes complex for $32.5 million, renaming it The Crest at Waterford Lakes. Sales for the one-, two- and three-bedroom units began that July, and 256 reservations were taken in a month’s time.

While Podvin had faith in the viability of condo conversions, potential investors and insurance companies worried about whether or not the project would sell in east Orlando, which had not yet experienced the condo conversion boom taking place in downtown Orlando and other areas. The problem with these developments can be that they do not cater to those seeking an affordable, reasonable Florida home loan.

Thanks to price tweaking in a slowing sales market, however, and an aggressive pitch to attract working class buyers, today 52 percent of the east Orlando project is sold and more than $16 million worth of business has been achieved. In February, the project had its best month: 25 sales that totaled more than $4 million.

Rising popularity of condo conversions

Because the issue of affordable Florida housing is always at stake, developers have begun to account for this problem. That’s why the popularity of condo conversions can now be attributed to “a great lifestyle at a reasonable cost,” notes David Tufts, founder and executive vice president of Atlanta-based Coldwell Banker The Condo Store.For instance, The Crest at Waterford Lakes is offering a 20 percent sales discount to emergency medical technicians, members of the military, police officers, teachers and nurses. Those in need of a manageable Florida home loan are being accounted for through these incentives.

“The goal is to attract that segment with the discount, and we expect those numbers to rise,” Podvin says. “And having owners that include police officers and emergency medical technicians is an added bonus for our community.”

Tarragon Corp.’s Florida division, which had done condo conversions in South Florida for four years, entered the Orlando condo conversion market in 2004 with what is now called Water Street in Celebration, says Tony Martin, executive vice president.

“That was our first (Central Florida) buy and it was a phenomenal success,” he says. Units for Water Street sold in less than two weeks for $150,000-$300,000. Since then, Tarragon did another local condo conversion in 2005 in Celebration called Georgetown that sold out in four months.

Condo conversions are still popular because single-family homes now are priced out of the reach of most people, says Martin. However, condos are still attainable for $160,000-$200,000, depending on the condo’s location, he says.

Martin estimates there were more than 80 U.S. condo conversion companies in existence in 2003, and that number grew to more than 800 nationwide by 2005.