PONTE VEDRA BEACH -- Soleil, named in honor of the French word for sun, has had a dark experience as one of Ponte Vedra Beach's last condominium conversion projects. Owner Julian LeCraw & Co. is now in the process of reverting the property back to its original use as apartments.
The condominium conversion craze swept over Florida during the early part of this decade, taking more than 1,200 apartment units off the rental market in the Jacksonville metropolitan statistical area alone.
That's exactly why, four months after announcing the conversion, Julian LeCraw decided to stop the process on Soleil, said a spokeswoman from the company's apartment marketing division who asked not to be named.
"We realized that there wasn't anything really affordable," she said.
Conversions became a popular revenue stream when interest rates were low, economic growth brought new jobs and a need for more housing to the area and there was a need for condominiums in the first-time-homebuyer price range, said former Lifestyles Realtors vice president and Alliance Development Executive Director Kris Pederson.
South and Central Florida have already experienced a trend of failed conversions reverting back to apartments, but Soleil is among the first reversions in Northeast Florida, experts said.
"It's just showing a sign of the times," said Ray Rodriguez, president of the Real Estate Strategy Center of North Florida Inc. "You're going to hear more stories about projects being scrapped."
Julian LeCraw owns at least seven multifamily developments in Northeast Florida, including at least three completed condo conversions: Belleza at Ponte Vedra, the Palms at Marsh Landing and the Grand Reserve. A fourth conversion, Summer House in Old Ponte Vedra, still has units for sale and will not revert back to apartments, the spokeswoman said.
The Atlanta-based company bought Soleil, an 18-year-old property formerly known as the Palmetto Cove apartments on Great Harbor Way, in June 2006 for $30 million, according to the St. Johns County Property Appraiser's Office.
Although she did not know exactly how many, several of Soleil's condominium units were sold before the reversion, the Julian LeCraw spokeswoman said, but the contracts allowed the company to stop the sale before the closing date. Phone calls to officials at Julian LeCraw's real estate agent partner Lifestyles Realtors and e-mails to attorneys representing Julian LeCraw were not returned by press time.
According to an Aug. 30 press release announcing the conversion, the property's 30 two-story apartment buildings were undergoing a full floor-to-ceiling renovation and units were for sale starting in the mid-$100,000s. The Julian LeCraw spokeswoman said that although she did not know how much the renovations cost, only a portion of the units received luxury upgrades that will require a rental increase of about $75 to $150 per month.
All the residents will benefit from the upgraded amenities at Soleil, which include a poolside bar and kitchen, poolside cabanas with TVs, poolside Wi-Fi, a private 20-seat movie theater and Zen garden and fountain, the spokeswoman said.
There have been other failed condo conversions, Pederson said, including the 200-unit Southern Pines apartment complex on Southside Boulevard in early 2006.
Unlike the Soleil project, that conversion was still in its infancy when the owner aborted the plans, Pederson said. Phone calls to BH Management Services Inc., which bought the property in 2003, according to the Duval County Property Appraiser's Office, were not returned by press time.
By the time Julian LeCraw began its conversion plans for Soleil in the summer and fall of 2006, prices were at their highest, media accounts of bursting bubbles began to scare off prospective buyers and investors began to walk away from condo contracts, Pederson said.
"We have to keep in mind, though, in mid-2005 we had about 1,200 condos available and in the beginning of 2006 we had at one time 3,900 units available for sale in Jacksonville," Pederson said. "So the market slowed down because there was a lot of inventory for the buyer to choose from."
The Julian LeCraw spokeswoman said this is not the first time the company has reverted condos back to apartments, but no matter what type of multifamily project the property is, the company always has the same objective.
"They've always added value to the property," she said. "They're always looking to upgrade not only the appearance, but the service as well."