Invesca Development Group landed a $55.2 million loan for an apartment-to-condo conversion of a 214-unit complex in Pompano Beach.
The plan to switch the Envy complex, completed in 2021, at 425-475 East Atlantic Boulevard, comes amid continued demand for condos and a slowdown of the multifamily market in South Florida.
Invesca and Gold Coast Florida Regional Center scored the bridge loan from Palm Beach-based private lender Forman Capital, according to the lender’s news release.
Plantation-based Invesca was founded in 2001 by the late Christopher Longsworth, who died in 2020. The firm is now led by Michael and Bernard Hsiao.
Hollywood-based Gold Coast is a South Florida regional center that raises funds for real estate projects through the EB-5 investment visa program, its website says.
Jay Miller and Spencer Miller were part of BayBridge Real Estate Capital that represented the borrower in the financing.
Envy consists of a pair of 11-story buildings offering studios, as well as one-bedroom to three-bedroom apartments, according to the release. Unit sizes range from 703 square feet to 1,026 square feet. Monthly rents for available units start at $2,123 and go up to $4,470, Envy’s website shows.
Over the past two years, South Florida’s multifamily market has turned.
From late 2020 to late 2022, the tri-county region was a magnet for out-of-state transplants, creating unprecedented apartment demand and record rent hikes. As developers seized on the bonanza with plans for new projects, more than 42,400 units were under construction in 2022, the most since at least 2006, according to data from CoStar Group. This tempered demand and rent increases, with rates plateauing and declining in some submarkets. Some landlords have also started offering concessions to help fill buildings. Envy’s website advertises “2 months free” to prospective tenants on select apartments, according to the property’s website.
At the same time, condo demand has remained strong, including from buyers who want a home now and don’t want to wait a few years.
Ben Jacobson, partner at Forman, said the Envy is “well-leased” and the condo conversion is a “highest-and-best use play.” Pompano Beach is emerging as a condo market of its own, with several projects underway, Jacobson said. Switching Envy to for-sale units now allows the landlord to immediately offer units to potential buyers.
“It’s nice to have a for-sale product that you don’t have to wait two years to be delivered,” he said.
Also in Pompano Beach, Edgardo Defortuna’s Fortune International Group and Ricardo Dunin’s Oak Capital are developing the two-tower, 205-unit The Ritz-Carlton Residences, Pompano Beach condo project at at 1380 South Ocean Boulevard. The Pérez family’s Related Group and the Motwani family’s Merrimac Ventures plan a 28-story, 92-unit Waldorf Astoria-branded condo tower at 1350 South Ocean Boulevard in Pompano Beach.
In other rental-to-condo conversions, PMG in 2022 switched its 646-unit Society Biscayne tower that was under construction at 398 Northeast Fifth Street in Miami to a condo project called The Elser Hotel & Residences. This marked the first condo conversion in recent years.
Developer Chip Abele converted the 386-unit Circ Residences apartment tower, completed in 2019, at 1776 Polk Street in Hollywood, to condos. Last year, developer Henry Pino’s Alta Development opted to switch its 283-unit River District 14 apartment project to condos. The 16-story River District 14 is under construction at 1451 Northwest 14th Street in Miami.
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