It was a tough day for Seth Siegler when he realized he had made a $20,000 mistake by not buying the apartment he used to live in, especially since he is a trained professional real estate agent.
So when his current apartment complex started to be converted into condos, he was one of the first residents to sign up to buy his unit.
“Woo, I made a mistake at the Enclave,” says Siegler, referring to his former apartment complex on James Island that underwent a conversion to condo status last year, emerging as the pricey Peninsula. “When (as a resident) they wouldn’t let me write my own contract and collect a commission, I walked out.”
Unfortunately for Siegler, a realtor with Prudential, the few-thousand-dollar commission he would have collected on the deal, which included buying a second unit, was dwarfed by the $20,000 extra the two units finally sold for.
“All the units over there are going for, like, $350,000, and they were all gone by noon the next day,” says Siegler, who used to rent in the Merritt, but now owns in Mira Vista — the new Florida-esque name of the same development, located off Folly Road behind Publix. This time, Siegler didn’t hesitate when Montecito, the company that converted both apartment complexes, asked that he use Trademark Properties, its preferred real estate office.
Jacksonville, Fla.-based Montecito is one of many development companies around the country that buys rental apartment complexes, converts them into condos — which is more of a legal distinction than a cosmetic one — and then brings in another company to manage the property for them, depending on the variables of the deal.
This style of redevelopment has become increasingly popular across the country, and especially in the Lowcountry, as soaring housing prices have sent the middle class, small-time speculators, and the like scrambling to find something — anything — in their price range.
A non-inclusive list of apartment complexes that have “gone condo” recently, becoming “condo-ments,” includes Ashley Knoll, Carrington, Otranto Villas, Southampton, Midland Terrace, and The Meridian, with Lochaven Village’s conversion expected to be completed soon and new construction The Battery originally advertised in apartment finders, switching over to condos.
What hooked Siegler the first time was Montecito’s quick-profit approach to selling the units: give residents first crack at reduced prices, then sell to “VIPs” who’ve bought lifetime $1,000-licenses, and then offer them to the general public at different, usually higher amounts.
Montecito declined to release the prices offered to current renters. The general public may bid on the units beginning March 25.
As a realtor and a buyer, Siegler says there are some very clear reasons “lock and leave” condo-ment conversions are becoming so popular.
“First of all, there really were no condos on the market in Charleston a few years ago, compared to other ‘urban’ areas, if you would call Charleston truly urban,” says the Long Island native.
“Second, a lot more young professionals have decided to live in Charleston, and they do not want to be bogged down with actually taking care of a property.”
And the third variable, says Siegler, is price.
“The prices of houses have gone up, and to live this close to downtown in a condo on James Island is a lot less expensive than buying a house, in some cases. That being said, a three-bedroom unit at Merritt (Mira Vista) or the Enclave is the same price as a lot of James Island houses.”
According to a “general public” pricing sheet, the fully-furnished two-bedroom, two-bath “platinum” model at Mira Vista is going for $309,700. Of course, that’s the top model. Unfurnished one-bedrooms start at $150,900, with prices and sizes climbing through the numerous two-bedroom models which average just over $220,000, and three-bedroom models going for as much as $256,900.
Even at $256,900, a 1,416-square-foot “Stono” 3br/2ba is still $1,100 below the median price for a home in Charleston County — and try finding a home actually going for that amount on James Island.
Siegler counts himself as a speculator, saying he will probably choose to live in a home he recently purchased downtown on Bogard Street. “What can I say, I love the crime,” he says laughing.
Proximity to downtown is what also sold Siegler on Mira Vista, which has people coming in to look at them “in droves,” according to Lori Nolan, an agent with Trademark.
“If you catch the arrow at Harborview Road, it takes five minutes to get downtown to MUSC,” says Nolan, citing one of the reasons MUSC students and doctors have been touring the units at Mira Vista.
(Actually, if you catch the light, it can take as little as four minutes.)
Still, with a bevy of apparent upsides, Jason Keever, 27, is on the fence about buying his three-bedroom unit and running his home office from there, even though the medical items salesman has seen it all before.
“When I lived in Orlando, I saw the market explode there, too,” Keever says, worrying that he’s coming in at the top of the pricing cycle and that Charleston, heretofore immune to the nation’s cooling real estate market and rising mortgage rates, is ready for a mild correction.
When he rented a 980-square-foot apartment in Charlotte’s Fourth Ward neighborhood a few years ago, he saw it get sold out from under him for $345,000.
Keever says he will consider hedging his bets with an option he’s taken out on a N. Charleston townhouse.
Unlike Siegler, Autumn Sorrow bought her unit at what’s now known as the Enclave, and is now considering buying a smaller unit at Mira Vista.
Of course, Sorrow — whose “non-hippie” parents named her in honor of an adorable girl they fell in love with at a gymnastics center they own — has an interesting perspective, as she’s the head of marketing for the Mira Vista.
Sorrow is sold on Charleston as a market.
“As long as the demand is here, we’ll be here,” she says.
But how long the demand lasts may depend on how much apartment complex owners can charge for rent now that condo conversions are shrinking an already expensive and competitive rental market.
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