Leon tells GlobeSt.com that the new owner acquired the propertyfrom Laguna Beach-based private investor Jim Hardy, who sold thecomplex in a 1031 exchange and plans to acquire another property tocomplete the exchange. Hardy had owned the property for about sevenyears, having acquired it in a transaction brokered by Leon. Thebuyer will probably begin construction of the new condominium unitsin about six months, Leon estimates. He says the new owner plans toraze the existing 65 units, which are all two-bedroom apartmentsand were 100% occupied at the time of the sale, and will buildall-new condos. The 5.1-acre site is entitled for up to 120 units.The transaction underscores the demand for apartment properties forconversion to condominiums, a trend that has gained momentum inOrange County and other parts of Southern California as a result ofrising multifamily prices and the demand for for-sale housing. Theproperty's location in Tustin is in the middle of an Orange Countyapartment market that exhibited "strong demand in the secondquarter," according to the latest research report by Hendricks& Partners. The report noted that, "Apartment constructionthrough the opening half of 2004 has surpassed last year's overallvolume." Although "demand fell moderately short of supply in thepast 12 months," the Hendricks report says, the apartment marketcontinues to benefit from "a healthy influx of new residents and aprohibitively expensive housing market."