Orlando Business Journal - March 31, 2006
by Kurt D. Schultheis
Staff Writer
ORLANDO -- Scott Podvin's first condo conversion project in east Orlando was one that worried possible investors and lenders who didn't know how the project would be received.
But Podvin, a third-generation developer of condos and resort properties worldwide whose roots reach deep into the Florida condo-hotel business, saw an opportunity.
So the 38-year-old bought the former Brittany at Waterford Lakes, a 276-unit apartment complex in Orlando, in June 2005.
"I saw a hot real estate market at its peak and wanted something pre-built that could start selling right away," says Podvin, president of Podvin Development Group.
Now, Podvin has his eye on 10 other possible condo conversion projects, including another east Orlando project he hopes to secure by the end of this year. He says he's also interested in entering MetroWest, Boca Raton, Palm Beach, Bonita Springs, Sarasota and Tampa.
A background rich in development
Podvin first got his development feet wet as marketing director at a family-owned business, First Jefferson Corp., which built projects such as the Polynesian Isle Resort in Kissimmee and Fort Lauderdale Beach Club.
In 2005, he formed Podvin Development Group. After landing a $28 million loan from Chorus Bank of Chicago, Podvin and three partners -- including Ford Barton of Choice Hotels -- bought the Brittany at Waterford Lakes complex for $32.5 million, renaming it The Crest at Waterford Lakes. Sales for the one-, two- and three-bedroom units began that July, and 256 reservations were taken in a month's time.
While Podvin had faith in the viability of condo conversions, potential investors and insurance companies worried about whether or not the project would sell in east Orlando, which had not yet experienced the condo conversion boom taking place in downtown Orlando and other areas. "It was an uphill obstacle, because companies had no conversions to compare it to in this area," Podvin says.
Another challenge: The complex's site, on the corner of Alafaya Road and Lake Underhill Road, was a former apartment complex that catered mainly to University of Central Florida students.
Yet, thanks to price tweaking in a slowing sales market and an aggressive pitch to attract working class buyers, today 52 percent of the east Orlando project is sold and more than $16 million worth of business has been achieved. In February, the project had its best month: 25 sales that totaled more than $4 million.
'A great lifestyle'
The popularity of condo conversions can be attributed to "a great lifestyle at a reasonable cost," notes David Tufts, founder and executive vice president of Atlanta-based Coldwell Banker The Condo Store.
For instance, The Crest at Waterford Lakes is offering a 20 percent sales discount to emergency medical technicians, members of the military, police officers, teachers and nurses.
"The goal is to attract that segment with the discount, and we expect those numbers to rise," Podvin says. "And having owners that include police officers and emergency medical technicians is an added bonus for our community."
Tarragon Corp.'s Florida division, which had done condo conversions in South Florida for four years, entered the Orlando condo conversion market in 2004 with what is now called Water Street in Celebration, says Tony Martin, executive vice president.
"That was our first (Central Florida) buy and it was a phenomenal success," he says. Units for Water Street sold in less than two weeks for $150,000-$300,000. Since then, Tarragon did another local condo conversion in 2005 in Celebration called Georgetown that sold out in four months.
Condo conversions are still popular because single-family homes now are priced out of the reach of most people, says Martin. However, condos are still attainable for $160,000-$200,000, depending on the condo's location, he says.
Martin estimates there were more than 80 U.S. condo conversion companies in existence in 2003, and that number grew to more than 800 nationwide by 2005.
More than 6,000 units are undergoing some form of condo conversion in Central Florida right now, he says.
But while condo conversions are still hot, sales are slowing, he says. "It's still a very good business to be in -- we just have to work a little bit harder for our sales," Martin says.

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