A developer today announced plans for the largest apartment-to-condo conversion project in Florida.

Marathon Asset Management LLC and investment group Marathon Real Estate announced that they will convert a 1,006-unit rental apartment community about four miles away from downtown St. Petersburg into a 912-unit condo development.

Marathon Real Estate, in partnership with the Robert Martin Co. and Prospect Capital Group, acquired the 88-acre apartment complex, which has three miles of seawall. The apartment community, known as Coquina Key Arms, has been renamed Waterside at Coquina Bay, and the first closings are expected before year-end, Marathon Real Estate announced.

Ron Bernstein, managing director of Marathon Real Estate, said the development will be the “Jewel of Tampa Bay.” He added, “The size and scale of this residential complex allows us to offer competitively priced oceanfront property to local and other potential purchasers. Furthermore, our enhancements to Waterside will contribute significantly to the beauty and growing popularity of St. Petersburg.”

Real estate experts have said that apartment-to-condo conversion projects are another sign of the sizzling U.S. housing market, and Florida has been a hotbed for these conversion projects. Housing-market experts also caution that such developments can deplete the inventory of rental housing, which can be a problem in areas where there is a short supply of affordable rental units. Some cities have placed restrictions on condo conversion projects to ensure that the supply of rental units is not depleted.

Located in the island community of Coquina Key, the property was originally developed in 1979. Developers announced that one-, two- and three-bedroom condo and townhome floor plans will be available.

Plans for the property include complete exterior renovations, interior upgrade packages and enhanced landscaping, Marathon Real Estate announced. The bayfront clubhouse will be converted to a Waterside Yacht Club with a private resident-only restaurant; the number of boat slips with dry dock facilities will be increased, with boat ramp access to leading to historic Tampa Bay; and an on-site market will be added for residents’ shopping convenience, developers also announced. Other planned amenities include: a second clubhouse, lighted tennis courts, fitness centers, swimming pools and spas, jogging trails, wireless Internet service and a business center.

Robert Martin Co., based in Westchester County, N.Y., specializes in residential and retail development and management and maintains partnership interests in office and flex space, 500 apartment buildings, a land portfolio, and the management of 3,000 units and several retail properties.

Prospect Capital Group, a Connecticut-based entrepreneurial investment firm, focuses on condominium conversion opportunities in the office, retail, and multi-family segments, and has over $120 million committed to projects in Georgia and Florida.

Launched in early 2004 by Marathon Asset Management LLC, Marathon’s Real Estate has completed 14 real estate transactions totaling $1.4 billion. Marathon Asset Management, founded in 1998, has 82 professionals and specializes in sourcing, analyzing and investing in global credit sensitive debt instruments. The firm currently has over $4.4 billion of equity under management with total assets under management of $9 billion.

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