An Atlanta-based investment-management group wants to add 30 residential units in an office building on Hilton Head Island.
Cygnus Capital Real Estate Advisors plans to convert 35 office condos into apartments on the second and third floors of the Courtyard Building, at 32 Office Park Road, according to Matthew Sherman, vice president of investments at Cygnus.
Plans are preliminary, Sherman said, but pre-application materials submitted to the Town of Hilton Head indicate the group plans to add 30, two- and three-bedroom units that total 35,500 square feet. The anticipated cost to renovate the building’s interior is $1.5 million.
“We typically look for distressed opportunities and clean up any litigation and legal situations that need attention,” Sherman said. “We reposition the asset as needed.”
The proposed Courtyard Building project matches the company’s model of refitting properties and their uses for the local market.
“Our thought is that there is an oversupply of office units,” Sherman said. He added there is more significant demand in the local market for residential uses.
The first floor has “active” retailers and offices, Sherman said, and are not included in the company’s renovation plan. Sherman said there are a few remaining tenants on the second and third floors that would likely move out when their leases expire this year.
Cygnus has revamped struggling properties throughout the Southeast since 2010, in the wake of the economic downturn. The Courtyard Building project would be the company’s first step into the South Carolina market.
The residential units would likely be “middle of the road” market rate, Sherman said. Estimated rents on the pre-application to the town indicate a range of $1,100-$1,400 for a two-bedroom, 1,000-square-foot unit; $1,320-$1,680 for a two-bedroom, 1,200-square-foot unit; and $1,485-$1,890 for a three-bedroom, 1,350-square-foot unit.
Interior design details and layout have not been finalized, but Cygnus projects to begin leasing units in spring 2017.
Early rental estimates
- $1,100-$1,400: Two-bedroom, one-bathroom, 1,000-square-foot unit
- $1,320-$1,680: Two-bedroom, two-bathroom, 1,200-square-foot unit
- $1,485-$1,890: Three-bedroom, two-bathroom, 1,350-square-foot unit