WASHINGTON, DC-The condo-conversion market might be at a peak, experts forecast Saturday at a session held during the 39th annual journalism convention of the National Association of Real Estate Editors. But while it lasts, some major REIT players are dipping their toes in the water.

It should come as no surprise that condo conversions have been on the rise. In fact, Al Cissel, co-director of the institutional multifamily group of Transwestern Commercial Services, reported that conversions have represented 91% of all multifamily transaction activity so far in '05. That compares with 28% in 2003 and 51% last year.

According to Jack McCabe, CEO of McCabe Research, driving the market are the usual gang of in incentives: population growth in such hot markets as Southern Florida; "skyrocketing appreciation and low interest rates." He noted that validation of the trend can be seen in the major players--all REITs--entering the markets, names, he said, like Archstone-Smith, Equity Residential and Bainbridge.

But don't expect the trend to continue forever. Cissel commented. The rest of the year should bring that 91% down to a more realistic 50% or so. In 2006, it should remain flat.

Michael Desiato, editor in chief of GlobeSt.com parent organization Real Estate Media, moderated the session.