Aug 11, 2005

Development Company Buys Cove Apartments


TAMPA - Yet another apartment complex in an area known for affordable waterfront renting might be replaced with condominiums or another type of development.

The new owner won't say yet what their plans are for the 689-unit Cove apartments, a 25-acre complex overlooking Old Tampa Bay. Ballast Point Group, a St. Petersburg-based group known for building upscale condos and town homes, said it paid $61 million two weeks ago for the 4003 S. West Shore Blvd. complex.

``All we can tell renters right now is they can expect absolutely no change for the immediate future,'' Bruce Keene, chief operating officer for the company, said Wednesday.

``We're in discussions now and until we settle, it's not fair to say what we'll do there,'' he said, adding that his group expects to know more in 60 to 90 days.

The previous owner, Laramar Group of Colorado, will continue to manage the property and is still renewing one- year leases, Keene said. Ballast Point Group has also managed apartment complexes in the past and built a complex in Dunedin that it later converted to condos.

The Cove deal comes after the sale in April of a nearby complex, Georgetown Apartments. The new Georgetown owners, Fort Lauderdale- based Motta Group, plan an upscale development on the 162-acre site.

Waterfront property along West Shore Boulevard is being gobbled up by developers. WCI Communities is building the West Shore Yacht Club, a 74-acre, 539-home waterfront complex south of Gandy Boulevard. EcoGroup Inc. wants to build residences, shops, restaurants and a marina on industrial land south of Gandy Boulevard and west of West Shore Boulevard.

Apartment communities in the area have become too valuable for their existing use, said Byron Moger, who specializes in apartments at the real estate firm Cushman & Wakefield. The 52-building Cove apartments, for example, was built in 1979 and the average unit is 644 square feet, he said.

``To pay $88,000 a unit for those ratty apartments doesn't make sense,'' Moger said. ``They must have something in mind.''

Still, building on the land could be tough, he added. The property has a five-story height restriction and its 689 units is the maximum allowed under its current zoning.

Building additional units would need a variance and might run into political pressures, Moger said, because so many other complexes are being built on the already crowded two-lane road.

A general rule of thumb, Moger said, is to purchase land for 20 percent of what it will retail for. That would mean the new units would need to sell for roughly $450,000, he said, and would probably be at least 1,500 square feet.

Other projects by the Ballast Point Group include the Grand Verandas on the Bay, a condo complex nearing completion on the Gandy bridge, and The Villas at Sea Gate, a town home community under construction in Dunedin.

Reporter Shannon Behnken can be reached at (813) 259-7804.

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