Florida Developers Turn to Condo Conversions to Meet Demand

According to Bloomberg, South Florida is grappling with a unique real estate challenge: too many outdated condos for sale, and not enough new, affordable units to meet buyer demand. 

The Bigger Picture

According to ISG World, just 3% of condos listed in the region—covering Broward, Miami-Dade, and Palm Beach counties—are less than 10 years old. Meanwhile, most newer inventory targets wealthy buyers, leaving limited options for middle-market consumers.

To bridge this gap, developers like GCF Development are converting rental buildings into condominiums. 

One high-profile example is the Circ Residences, a 25-story tower in Hollywood, FL, originally built as rentals and now being sold as condos. Units range in price from $500K to $1.2M, with buyers drawn to their modern features and compliance with current safety standards.

A Perfect Storm

Multiple factors are driving the broader pivot to condo conversions:

• A new state law requires condo buildings older than 30 years to undergo structural inspections and fully fund reserves, resulting in hefty assessments for owners. These costs, combined with rising insurance premiums and property taxes, lead many owners to sell rather than pay.
• Buyers relocating to FL prioritize safety and newer construction, creating a strong demand for affordable options. However, new units are often out of reach for middle-income buyers, averaging nearly $2M per unit.

Converting rentals into condos offers a practical solution to both these problems, delivering more competitively priced inventory to the market.

Solving The Problem

Developers are also responding to challenges in Florida’s rental market, which saw a pandemic-era building boom that resulted in oversupply. Slowing rental demand has pushed landlords to lower rents, eroding profits. Pivoting to condos offers a way to boost yields and move inventory quickly.

For example, S2 Development converted the Atlantica at Dania Beach, a garden-style apartment complex, into condos priced between $450K–$750K. Similarly, the Elser Hotel & Residences in Miami, planned as a rental project, was converted into condos, with 94% of its 646 units already sold.

By transforming existing buildings into condos, developers can bring homes to market faster and at more accessible prices, addressing South Florida’s growing demand for modern, storm-resistant housing.