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Apartments today, condos tomorrow, dwellers in limbo

With land costs rising, developers are buying apartments to convert. Some tenants will have find new homes.

By DEMORRIS LEE
Published August 7, 2005

TAMPA PALMS - It was about time for Christina Thomas and her fiance, Brent Volstad, to renew their lease, so two weeks ago they gave the rental office at the Hamptons at Tampa Palms a call.

"They told us that we could not renew our lease and that the complex was going to an ownership community," Thomas said outside her apartment. "We've lived here for four years and we really love this place. But we can't see buying it."

Like many other apartment complexes in recent years, the Hamptons, at the corner of Bruce B. Downs Boulevard and Amberly Drive, will convert to condominiums. Some of the apartments are as big as 1,532 square feet and have two-car attached garages.

"Tampa has a hot market for that right now," said Jeff Staley, owner of Atlantic Pacific, the Miami-based company that manages the Hamptons. "Because of the interest rates, people are trying to take advantage of home ownership. "That seems to be the wave right now," Staley said.

Chris McKinney, the chief financial officer of Baycom of Florida, the company that owns the Hamptons, declined to comment about the conversion.

Michael Slater of Triad Research and Consulting tracks apartment trends in Florida and throughout the country. He said land costs for new construction for condos and apartments have gotten so high that owners and investors have turned to the existing housing inventory.

"It's happening everywhere," Slater said.

In Sarasota, 40 percent of the apartment rental market has been converted, Slater said. In Pinellas, 20 percent has been converted; in Hillsborough, about 11 percent.

"But that will change dramatically by the end of the year," Slater said of Hillsborough County.

In the Tampa Bay area, there are some 80 properties being considered for conversion, Slater said.

The end effect of conversion is a shrinking market for rental apartments.

Volstad and Thomas said they will not buy at the Hamptons. They don't think they'd be able to afford it.

There are 315 units at the Hamptons. Conversion developers are required by law to allow existing apartment residents to live out their leases. Thomas said workers at the Hamptons told them that when their lease is up on Sept. 1, they will be able to go month to month with no increase in their rent. In addition, she said, they were told that they'll get a four- to five-month heads-up on when they have to be out.

"We really enjoyed living here," Volstad said, "but everything now is up in the air."

Demorris Lee can be reached at 813 269-5312 or dalee@sptimes.com

[Last modified August 6, 2005, 10:03:05]