REITs Playing with Fire?
As if this is news, Investors.com is reporting that “condo conversions surge” in big boom markets like San Diego and New York. Making news however is the largest single residential building earmarked for condo conversion. The Manhattan House is a 583 unit apartment building currently being operated as a multi-family rental property. Soaring home prices are apparently too much of a draw for some investors.
According to Real CApital Analytics (RCA), condo conversions have accounted for 43% of the $62 billion in national apartment property transactions from the beginning of the year through September. While most of the money behind these speculative investments is private, REITs like Equity Residential, Post Properties and Colonial Properties Trust are getting into the game. It is a crazy world out there.