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PHILADELPHIA-Venice Lofts, a multifamily complex on Venice Island between the Schuylkill River and Manayunk Canal that broke ground as a condo project in mid-2005, has been converted to rental apartments. In late 2006, the developer, locally based Dranoff Properties, decided that rather than sell into a declining market, it would lease the complex's 128 units.

"People, especially young people, are a little frozen now," says Carl Dranoff, owner. "The condo market is unsettled, and they're exploring their options. In addition, there are people who are unable to sell houses in the suburbs. There is pent-up demand for rentals, and that market is strong.

"We're owner/operators, and we have the financial capacity to sustain an investment. We're leaders, not followers with a history of being ahead of the pack, and we're nimble," he says. "We made a very thoughtful, deliberative decision, and we didn't want a fragmented community, so we returned condo deposits and actually have retained some of those buyers as renters.