A Miami-based real estate company plans to convert a 236-unit Atlanta apartment building into condominiums, reviving a strategy developers employed more than two decades ago during the U.S. housing boom.
Crescent Heights is touting "Buckhead's Iconic Condo Transformation" at Panorama Buckhead Residences, located at 2460 Peachtree Road, as its website shows. The company paid $55.2 million for the 41-year-old property in November, according to CoStar, the commercial real estate data affiliate of Homes.com.
One-bedroom units at Panorama Buckhead range from $299,000 to $354,000, while two-bedroom units are priced from $365,000 to the $600,000s, David Tufts, co-founder of Ansley Developer Services, told Homes.com. Crescent Heights hired Ansley and Christie's International Real Estate to work on the conversion.
Crescent is renovating the 17-story building near the Peachtree Battle neighborhood and shopping center in south Buckhead. It quietly started selling units at the end of September but will not disclose sales figures, according to Tufts. He said a grand opening launch is set for January.
"This is like a jewel in the rough," Tufts told Homes.com. "Crescent is touching every piece of the building and bringing it back to life."
During the late 1990s and early 2000s, Crescent Heights and other developers converted apartment buildings to condos across the country to capitalize on demand for new homes. In South Florida and other destination markets, some buildings sold in days as investors clamored to buy units and resell them for big profits.
Market collapse ended practice
Dale Henson, a longtime Atlanta multifamily consultant who died in 2013, referred to the trend as "condomania." That frenzy led to a nationwide run-up in home prices and a bubble that burst in 2006, ushering in the Great Recession and the worst housing downturn since the Great Depression.
Many developers that converted apartments to condos before 2006 made millions on the deals, according to housing analyst Jack McCabe. Once the market collapsed, individual owners and entire buildings fell into foreclosure, and the condo conversion craze largely ended, said McCabe, who tracked the trend at the time.
While the market has slowed recently in Atlanta, home prices remain relatively stable after years of steady increases.
"Prices have gotten so high in recent years that it may look profitable now for developers to begin conversions again," McCabe told Homes.com. "I think you'll see far fewer of them, they'll be in well-located areas, and the prices will be lower than new construction."
Atlanta's tony Buckhead neighborhood is one of the city's districts that investors and developers covet the most, according to Madelyn Bearn, director of market analytics for Homes.com.
"Its deep base of office employers, robust transportation network and affluent residential profile create a strong foundation for growth," Bearn said. "Add in its proximity to the city’s wealthiest neighborhoods, and Buckhead becomes a prime choice for empty nesters looking to downsize without sacrificing access to luxury amenities and services."
Crescent Heights bought the Buckhead property from Liquid Capital, according to CoStar. It was built on a 2.99-acre site in the Peachtree Heights multifamily market.
The building has 201 two-bedroom/two-bathroom units and 35 one-bedroom/one-bath units, the data shows. Unit sizes range from 814 to 1,260 square feet, according to the Crescent Heights website. Amenities include a pet spa and Zen garden.
The developer also wants to convert the 40-story, 283-unit Ten Thousand apartment building in Los Angeles into condominiums, which would be that city’s largest condo conversion since the early 1970s, according to Commercial Observer.