TAMPA, Fla. - Condominium owners and potential investors should pay particular attention to recent changes in Florida’s condominium law, as new options open doors to higher values in an otherwise bottoming market.
Kelly Oliver, investment advisor and multifamily property specialist at Grubb & EllisCommercial Florida, said two of the new changes can offer particularly beneficial opportunities for developers.
“Many condominium communities could fall under what is generally called ‘fractured condo’ status,” Oliver said.
A ‘fractured condo’ occurs when a rental apartment community is converted to condominium status, but too many units remain unsold.
“That’s happened all over Florida,” Oliver said. Recent changes in the condominium law allow 80 percent of unit owners in a community to restructure condominiums as fee-simple rental apartments, which could offer higher value and tax advantages too, Oliver explained.
But fractured condo status has several pitfalls, Oliver warned.
“Unit owners should be aware of all the requirements,” Oliver said. Control over the condominium association and qualification of owners as ‘developers’ under Florida law are crucial to reconverting condominiums into rental apartments, she explained.
“In some cases, it is advantageous to consider conversions to a rental community, but the process is complex and must be followed carefully so as not to jeopardize the interests of the unit owners,” Oliver said.
About Grubb & Ellis:
Grubb & Ellis Company (NYSE: GBE) is one of the largest and most respected commercial real estate services and investment companies. With more than 130 owned and affiliate offices worldwide, Grubb & Ellis offers property owners, corporate occupants and investors comprehensive integrated real estate solutions, including transaction, management, consulting and investment advisory services supported by proprietary market research and extensive local market expertise.
Grubb & Ellis and its subsidiaries are leading sponsors of real estate investment programs that provide individuals and institutions the opportunity to invest in a broad range of real estate investment vehicles, including tax-deferred 1031 tenant-in-common (TIC) exchanges; public non-traded real estate investment trusts (REITs) and real estate investment funds. As of September 30, 2008, more than $3.8 billion in investor equity has been raised for these investment programs. The company and its subsidiaries currently manage a growing portfolio of more than 225 million square feet of real estate. In 2007, Grubb & Ellis was selected from among 15,000 vendors as Microsoft Corporation's Vendor of the Year. For more information regarding Grubb & Ellis Company, please visit http://www.grubb-ellis.com/.
For more information, contact:
Kelly Oliver, Grubb & EllisCommercial Florida, 813-639-1111 Ext 262
Jeffrey Sweeney, Grubb & EllisCommercial Florida, 407-481-5387
Larry Vershel, Larry Vershel Communications, 407-644-4142
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