Now that Credit Suisse First Boston has underwritten the second structured finance deal ever backed entirely by loans tied to the conversion of apartments into condominiums, other banks are looking to get into the game. Rating agencies say other dealers are likely to assemble transactions, and Dan Chambers, an analyst at Fitch Ratings, said he expects issuance in the incipient market will grow to $3 to $5 billion in 2006 from $2.7 billion this year, even as overall interest in condo conversions appears to be slowing.

The low interest-rate environment of recent years sparked a bit of a condo conversion craze, in which companies transformed rental apartments into condos that they could sell to buyers who were unable or unwilling to purchase single-family homes. This generated quick returns for the owners of apartment buildings, allowing them to cash out at what many perceived to be the top of the market. Some banks have loads of these loans on their balance sheets and are looking to move them off, so they've been included as part of the collateral packages backing a number of recent CMBS deals and some real estate CDOs.

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