Turtle Creek tower won't become condos

In what may be the first sign that Dallas' condominium craze has its limits, a Turtle Creek project is shifting gears.

Instead of converting the building to condos, the owners of the Rienzi tower are refocusing the property as a rental project, real estate brokers say.

The nine-story, 154-unit residential building at 3500 Fairmount St. has been owned since March by TA Associates Realty of Boston. In April, the building began converting from apartments to condominiums, with units priced from $215,000 to $1.2 million.

But after selling more than a dozen units, the owners have decided not to continue the project.

"At this point, I would say it is in question," said Reid Parker with TA Associates.

TA Associates is refunding condo buyers and has hired apartment developer ZOM Texas Inc. to lease the building.

Real estate brokers familiar with the move say the change of plans was due in part to the shifting rental market in Dallas. Apartment demand is at its highest point in years, and vacancy rates are falling.

Sales of the condos at the Rienzi were also slower than expected.

"It's a wake-up call," said Mike Puls, with Dallas condo and apartment analyst

Foley & Puls Inc. "You can't convert every apartment into condominiums just because you think it's a good idea."

Mr. Puls also said that investors -- which may make up as much as 25 percent of the high-rise condo market in Dallas -- have gravitated to high-profile buildings such as the W Dallas Victory Hotel and Residences and the Residences at the Ritz-Carlton.

"The buyers are sophisticated -- they always buy the best units," he said