Miami-based foursome Gold Krown Financial could be on the edge of a wave of condo conversions as it refits a residential tower in the heart of the group’s Midtown holdings from rental to condominium.
“As the market has increased, we were able to say, ‘okay, the time has come,’ because there’s a huge demand in Midtown for housing,” said Sam Beznos, the president of Michigan-based development and management company Beztak and Gold Krown partner.
“Because it’s a conversion, we think we can come in below replacement costs, below new construction, and that would be attractive to a lot of buyers.”
The 173-unit Midblock tower was part of developer Midtown Equities massive mixed-use project for the Miami area formerly known as the Buena Vista rail yard that stalled during the credit crunch.
Gold Krown, whose other partners are Ron Krongold, Bush family scion Jeb Bush Jr. and MG Investments principal Gary Goldboom, acquired the properties from HSBC for pennies on the dollar in 2011. HSBC took over the properties in a foreclosure earlier that year.
The move could precipitate a wave of conversions as investors who picked up distressed housing in South Florida’s real estate crash begin signaling a new chapter in the region’s recovery story, with brokers starting to market Miami buildings as conversion-ready.
Beznos’ company, Beztak, is charged with lining up buyers with lenders.
Beznos said his company has lured a handful of lenders to Midtown, making matches based on the demographic of the buyers.
“There are lenders only interested in foreign nationals or investors or whatever it may be,” he said.
Whether more owners of distressed residential assets in South Florida decide now’s the time to cash in their chips, a very different story is unfolding only a short jaunt from Midtown in Edgewater, an up-and-coming enclave on Biscayne Bay.
Developers there are targeting investors who want to become landlords, predicting that a short supply of affordable housing will keep those rent checks coming.