By John Schaffner
Experiencing a dearth of sales in the economic downturn that has hit Atlanta and the nation, new condominium projects are at least temporarily switching to renting the units as apartments — attempting to generate some income from the units rather than languishing with them empty and a financial drain.
One of the latest to switch in Buckhead is eon at Lindbergh, a 352-unit high-rise adjacent to the Lindbergh MARTA station.
Eon joins Mezzo, a 94-unit new condo building on Peachtree Road south of Peachtree Battle Avenue that its developer, Tivoli Properties, also converted to apartment rentals during 2008.
Although no sales had been closed at eon, about one-third of the units were under contract, and those people received refunds, said Jerome Hagley, the executive vice president and chief operating officer at the Dawson Co., which developed the property with the Lane Co. The building was set to be converted to apartments at the beginning of this year.
The developers of eon tried financial incentives to spark interest, including a $10,000 offer in August, but to no avail. That incentive was offered in a development that was relatively affordable for Buckhead, with prices beginning in the $180,000s. But the sales center shut down in late September.
Just down the street from eon in the Lindbergh area is another reminder of the slumping housing market: a skeleton of a condo building with a few floors started before MCL Cos. of Chicago pulled the plug on construction.
That project, named Skyline, remains on hold.
But Buckhead is not the only area of metro Atlanta that is seeing the condominium-to-apartment conversion take place or at least has seen developers try to make the conversion.
The Lane Co. also is building the Serrano condominiums as part of a planned mixed-use development in Sandy Springs at the corner of Abernathy and Barfield roads, just off Ga. 400.
Because of slow sales, the developer has approached members of the Sandy Springs City Council to test the waters about converting Serrano, at least for now, into apartments.
The property was approved for condominiums, not for apartments, and council members reportedly are not looking favorably on altering that status, even if only as a temporary step until the sales market improves.
Another Sandy Springs condo development, Promenade at NorthPlace, just up Barfield Road from Serrano, late last year held an auction to sell off some units that were not moving in the depressed real estate market.
A number of developments simply are on hold at this point, although products such as the high-priced condominiums at the St. Regis on West Paces Ferry Road and the Mansion and Sovereign on Peachtree Road, all in Buckhead, are reportedly selling.
Seeing this market situation coming, Coro Realty Advisors changed its plans for developing a condo project at Peachtree and Piedmont roads into a high-end apartment building — leasing at about $20 a square foot — before construction began.
Wood Partners did the same thing with its planned residential/retail development as part of The Streets of Buckhead.
Word is, however, that projects being developed as high-end apartments today are being built out so that they can be easily converted to condominiums when sales become strong again and market absorption dictates the viability of conversions.
Some projects still are moving forward, and others simply are on hold, such as the 3,900 condo units planned for the City Place mixed-use development at Foxboro and Lenox roads in Buckhead.