As Demand Cools, Condos Revert Back To Rentals

Due to a softening of the housing market and the increased demand in the rental market, many condo conversion projects across the nation are converting condos back to rental units.

"There was a huge craze," said Larry Leitzman, a Tampa-based researcher with Grubb & Ellis. "Everybody was taking apartment buildings and converting them to condo's. A lot of them are reeling them back in and taking the apartments that didn't sell and converting them back to rentals," he added.

The article notes that Miami, Fort Lauderdale, Orlando, Las Vegas, San Diego and Phoenix as markets seeing conversions of condos back into rental units. Estimates are that between 25 percent and 40 percent of all condos being developed or converted in those markets are likely to be offered as rentals instead.

Condo conversions peaked in September 2004 when nearly 28,000 units were converted. Levels fell back to 3,354 units in June 2005, and experts see further softening in the number of condo conversions for the remainder of 2006 and 2007. More...