A growing niche in the multi-family sector is bulk condo sales. Since the start of 2008, over $1.0b of significant bulk condo sales have closed, comprising close to 8,700 units across 70 properties.
Bulk sales are still only a tiny part of the market, accounting for just 5% of recent apartment sales. However, at least another 160 properties with a potential 29,000 units are known to be in default or have already been foreclosed.
Florida, the epicenter for the condo conversion boom, has also seen the most bulk condo sales. This is despite a law that designates bulk condo buyers who resell seven or more units in a calendar year as “successor developer,” which means they must assume construction warranties even for units they did not buy. A similar law is in effect in California. This has certainly put a damper on some investor interest. Still, buyers with long-term hold horizons or who have determined that their risk is limited are active in the state.
Phoenix, Manhattan and San Diego have also seen a number of bulk condo sales recently.
Even in failure, condo units appear to be worth substantially more than rental units. The average bulk condo price was $120,000 per unit nationally, compared to $85,000 per unit for rental units. The disparity in pricing seems to hold across almost all markets as well.
The 70 bulk sale transactions analyzed average almost 143 units each. Smaller packages of 30 units or less are often being auctioned to individuals. Bulk sales offer owners or creditors with large blocks a more efficient way to exit.
There have also been several bulk sales of bulk condos. Most recently, Colonial Properties REIT and its JV partner sold two condo developments in Florida on the same day, including 93 units at the 275-unit Murano at Delray Beach for over $90,000 a unit. The other asset, 118 units in the 385-unit Portofino in Jensen Beach, sold for about $57,000 per unit.
Download a list of Bulk Condo Apartment Sales 2008 to Present.
Bulk Condo Sales*
| | |
| |
|
avg $ /unit |
| Market |
$ mil |
# |
Units |
% of mkt |
Bulk |
Rental |
| Miami | $125.6 |
10 | 596 | 37.4% |
$210,805 | $76,623 |
| Tampa | $67.8 |
5 | 819 | 8.9% |
$82,737 | $65,676 |
| Phoenix | $58.3 |
5 | 404 | 5.9% |
$144,381 | $79,412 |
| Manhattan | $115.4 |
5 | 262 | 3.3% |
$440,456 | $310,648 |
| Broward | $116.3 |
4 | 1,161 | 48.6% |
$100,151 | $70,336 |
| San Diego | $51.5 |
4 | 337 | 4.1% |
$152,881 | $134,205 |
| Orlando | $49.7 |
3 | 817 | 6.8% |
$60,879 | $81,309 |
| Jacksonville | $19.2 |
3 | 364 | 6.6% |
$52,628 | $56,324 |
| Palm Beach | $39.2 |
3 | 337 |
13.4% | $116,320 | $97,752 |
| Seattle | $33.1 |
2 | 366 | 1.6% |
$90,336 | $127,457 |
| DC MD burbs | $66.7 |
2 | 304 | 5.6% |
$219,243 | $107,706 |
| Los Angeles | $55.0 |
2 | 181 | 2.2% |
$303,867 | $164,953 |
| Memphis | $23.5 |
2 | 162 |
17.0% | $144,753 | $39,095 |
| Florida Panhandle | $24.0 |
2 | 98 |
25.1% | $244,578 | $72,739 |
| Boston | $6.9 |
2 | 90 |
1.0% | $76,667 | $184,751 |
| Baltimore | $45.0 |
1 | 508 | 9.2% |
$88,583 | $93,561 |
| SW Florida | $29.0 |
1 | 363 |
16.6% | $79,890 | $74,363 |
| Houston | $17.2 |
1 | 248 | 0.8% |
$69,153 | $50,733 |
| Sacramento | $28.0 |
1 | 223 | 3.8% |
$125,561 | $101,541 |
| Oklahoma City | $5.3 |
1 | 209 | 1.7% |
$25,359 | $52,565 |
| Chicago | $9.0 |
1 | 157 | 0.6% |
$57,325 | $108,066 |
| Tucson | $5.3 |
1 | 118 | 3.3% |
$44,915 | $61,256 |
| Martin/Saint Lucie | $6.8 |
1 | 118 |
80.8% | $57,203 | $22,857 |
| Daytona Beach | $3.0 |
1 | 109 |
17.1% | $27,523 | $51,779 |
| Denver | $9.2 |
1 | 89 |
1.1% | $103,371 | $76,240 |
| NYC Boroughs | $6.0 |
1 | 75 |
0.3% | $80,000 | $119,377 |
| No NJ | $18.2 |
1 | 71 |
1.9% | $256,338 | $115,361 |
| Atlanta | $6.9 |
1 | 65 |
0.3% | $106,154 | $68,950 |
| East Bay | $7.6 |
1 | 31 |
1.0% | $245,161 | $146,398 |
| Las Vegas | $1.9 |
1 | 29 |
0.5% | $63,793 | $85,563 |
| Greensboro | $2.8 |
1 | 17 |
2.4% | $161,765 | $50,441 |
| Grand Total |
$1,053.1 |
70 |
8,728 |
2.1% |
$120,652 |
$84,880 |
*10 units or more
Distressed Bulk Condos
| Market |
$ mil |
# |
Units |
| Miami | $1,088 | 29 |
6,552 |
| Manhattan | $619 |
6 | 1,125 |
| Palm Beach | $415 |
10 | 2,455 |
| Las Vegas | $323 |
5 | 2,056 |
| Orlando | $320 | 9 |
2,168 |
| Tampa | $224 | 8 |
1,912 |
| Broward | $193 | 14 |
2,143 |
| SW Florida | $185 |
5 | 1,468 |
| Chicago | $184 | 9 |
998 |
| Seattle | $175 | 9 |
714 |
| Phoenix | $155 | 10 |
2,085 |
| Jacksonville | $108 |
3 | 960 |
| Boston | $106 | 1 |
268 |
| San Diego | $103 |
10 | 667 |
| Houston | $101 | 3 |
667 |
| Florida Panhandle | $69 |
1 | 370 |
| other markets | $405 |
$26 | 2,857 |
| Total US |
4,770 |
158 |
29,465 |
Known bulk condos in distress plus troubled condo conversions.
Excludes new condo developments
Data subject to future revision; based on properties & portfolios $5 mil and greater.
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