By Dennis Quick
Senior Staff Writer

The apartment-to-condominium conversion trend, which began spreading throughout the Lowcountry about four years ago, continues with two recently converted Mount Pleasant apartment communities located roughly two miles from each other.

In November, Jacksonville, Fla.-based developer Montecito Property Co., which earlier this year converted the 300-unit Peninsula apartments on James Island to condos, converted the 256-unit Palmetto Plantation on U.S. Highway 17 North, near the Isle of Palms Connector, to a condo community renamed Meridian.

In October, Tarragon Development Corp. of Orlando, Fla., a regional office of the New York-based company, took the 240-unit Southampton Apartments on U.S. Highway 17 North near Interstate 526 and converted it to a condo enclave called Southampton Pointe. That same month Tarragon converted the Vintage at Fenwick, a 216-unit Johns Island apartment community, to condominiums and renamed the development Twelve Oaks at Fenwick Plantation.

When the Lowcountry’s condo conversions began in late 2001, developers chose older apartment communities with few recreational amenities, refurbished the units and sold them for about $70,000 to $90,000. It was a way to provide working-class wage earners a path from renting to owning their homes.

With many older apartment communities either already converted or considered “less desirable,” developers are now focusing on newer, class “A” apartment communities with swimming pools, tennis courts, fitness centers and other recreational attractions, said Ray Case, president and broker-in-charge of North Charleston-based commercial real estate firm Coldwell Banker Commercial.

Also, class “A” apartments in choice locations like Isle of Palms and Mount Pleasant have a higher chance of being converted to condos, Case said.

“Our customers want a lifestyle,” explains Chip Conk, Montecito Property Co.’s CEO. “They want pools, fitness centers, newer buildings and want to be near newer stores.”

Charleston remains ripe for apartment-to-condo conversions because “it’s a good second-home market, a good resort market and has good job growth,” Conk added.

Mount Pleasant, with a population of 60,000 and growing, now limits the number of homes that can be built each quarter. Developers see apartment-to-condo conversions as a means of providing homeownership opportunities for people who want to live in Mount Pleasant, said Michael Washburn, associate broker at Exit Realty, which this year handled the apartment-to-condo sales at Mount Pleasant’s East Bridge Town Lofts and at The Bay Club on Sullivans Island.

Even though apartment-to-condo conversions, which increase homeownership opportunities, are a minor factor in attracting companies to the Lowcountry, the conversions do have some value in corporate recruitment, according to David Ginn, president and CEO of the Charleston Regional Development Alliance.

“We find that most executives who relocate with a company are interested in purchasing a home at the onset rather than renting,” Ginn said. Although this trend doesn’t directly impact our business recruitment, it certainly seems to be a positive selling point for our market.”

The conversion trend is part of the nation’s overall flourishing condominium market, which feeds off the rising costs of single-family houses. Between 1995 and 2003, the number of occupied condos in the United States rose from 4.4 million to 5.4 million, according to the Harvard University Joint Center for Housing Studies’ “State of the Nation’s Housing 2005” report.

iDennis Quick is senior staff writer at the Business Journal. E-mail him at dquick@charlestonbusiness.com.

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