Starting what experts say is a new trend in local real estate, Broadway Station Apartments in Myrtle Beach will become condominiums by next year.
Analysts say the apartment complex won't be the last to go condo, as skyrocketing home prices and a sizzling market make conversion attractive. The area's median home price - meaning half of the homes sold for more and half for less - jumped from $160,000 in 2004 to $178,900 in the second quarter.
Atlanta-based Lane Co. bought the complex near 38th Avenue North and Robert M. Grissom Parkway from Easlan Capital for $27.2 million and notified residents of the conversion when the deal was cut a month ago. Lane plans to spend $5 million on renovations and upgrades.
Condo prices are expected to start in the low $100,000s.
"It is an irreplaceable location in a very healthy condo market," said Scott Levitt, vice president of acquisitions for Lane Investment & Development Corp., a Lane Co. subsidiary.
If more apartment complexes follow suit, it will put a squeeze on the rental market and send the area's service work force looking farther away for housing, said Tom Maeser president of Fortune Academy of Real Estate.
The Grand Strand's 7,000 apartments were 96 percent full this summer, up from 93 percent last year, according to a survey by E.F. Hucks Consulting, a local market-research group.
And builders aren't putting up more apartments - they're building condos.
"The condo market is so strong that the land value has gotten to where it makes apartment construction not feasible, just like motel development is not feasible," said Buddy Hucks, president of E.F. Hucks.
Ivystone Apartments, near Socastee, is the only complex still building new apartments in the area, according to Charlotte-based Real Data.
Lane will honor residents' leases, and they will have the option to purchase the unit they live in, Levitt said.
Levitt said exact prices are not known because the company is selecting a brokerage to sell the units.
"The cost to rent is fairly comparable to the cost to own at Broadway Station. That's another factor that we considered," Levitt said.
Broadway Station is sending renters to Palmetto Pointe apartments, which expects to fill up because of the conversion.
Although some residents at Broadway Station may buy, the property will be attractive to investors who may rent the units as vacation rentals and change the face of the community, Maeser said.
Renter Ashley Yeager, 24, said she and her boyfriend might try to buy their one-bedroom unit.
"We'd like to unless the prices are too outrageous," Yeager said.
Name Lane Co.
Headquarters Atlanta
Business Real estate development. The company manages about 30,000 apartments in 11 states and has developed more than 13,000 condos.
(c) 2005 Associated Press
