Nowhere is the conversion craze hotter than in Florida, which is enjoying an influx of young, educated workers and second-home buyers from South America and Europe along with the northern snow birds that routinely flock to the state in winter. Combined, the Miami/Dade, Broward/Palm and Tampa markets in that state represented 30% of the $2.6 billion of apartment acquisitions targeted for conversion between early 2003 and early 2004 in the U.S., according to Real Capital Analytics. Northern Virginia ($341 million), San Diego ($175 million), Chicago ($135 million) and Atlanta ($99 million) followed.

The velocity of condo sales, particularly in Florida, gives converters confidence that plenty of time exists before the market will turn. In fact, Florida developers have yet to find the top of the market. While converters continue to pay higher prices for properties, home buyers continue to spend more for condos, says John Goldsworthy, director of marketing for Equity Marketing Services in Miami, a firm that has handled the sales and marketing of 130 condominium developments since 1980.

“I think apartment owners realize that we're nearing the top of the market right now and that it's the best time to sell,” he says. “A lot of them are putting their properties on the market unpriced and are having a 15-to-20 day call for bids. And converters are snapping them up left and right.”

Earlier this year, DK/Equity, a joint venture between Equity Marketing and Chicago-based Draper & Kramer, acquired the 7-year-old, 334-unit Floridian in Miami Beach for $98 million. The $293,500 price per unit is the highest ever paid in Florida. DK/Equity, which was backed financially by The Carlyle Group, LaSalle Bank and Boston Capital, made a further undisclosed investment to upgrade the Floridian's exterior, lobby and other areas of the 33-story building as part of the conversion process.

As of mid-May, the partnership had sold 180 condos in about 12 weeks, Goldsworthy says. Depending upon the upgrades buyers want in their condos, prices start at $266,000 for a one-bedroom unit without a Biscayne Bay view to more than $625,000 for a three-bedroom unit with a bay view.

On the other end of the affordability scale, SunVest earlier this year acquired the Fairways at Grand Harbor in Vero Beach for $24 million, or $93,000 a unit, with its joint venture partner, Hamilton Investment Group, a condo developer in Coral Gables, Fla., that has built 8,000 units in Puerto Rico and Florida.

The 257-unit gated Mediterranean-style community, which was built in the late 1990s, required little additional investment, says SunVest's Birdman. Condo prices range from $90,000 to $140,000, and only five months after its conversion, SunVest/Hamilton has sold all but 20 of the condos, he adds.