Seeing is believing in condominium development. Beautiful renderings can help developers presell condos before they build them. But a messy construction site is what many buyers really need to see before they commit to purchase an unbuilt condo.
That dynamic has shaped the curvy path of a boutique development called 321 at Water’s Edge, a 23-unit condo under construction on the west side of Fort Lauderdale’s barrier island, 700 feet from the beach.
Boca Raton-based SobelCo is developing the 11-story building at 321 N. Birch Rd. The Real Deal, a real estate news website, reported that SobelCo got a $26 million construction loan in January from Goldman Sachs to build the boutique condo.
“When people see [construction] activity,” Laura San Jose says, “and they feel confident that the project is moving forward, then they’re willing to commit. I think that was the big hurdle we had to get over.” San Jose, a real estate agent who is handling sales of the condo units, is also the wife of Tirso San Jose, vice president of residential development at SobelCo.
Another hurdle was the memory of an unfinished condo development at the same site. It was supposed to be an 11-story condo called Privage. But instead of building anything at 321 N. Birch Rd., Fort Lauderdale-based Grand Birch LLC sold the site to SobelCo for $10 million.
“It did have a little bit of a stigma,” says San Jose. “The developers were going to do a project called Privage, and it never happened, so people then were questioning us. We had to deal with that stigma,” even though “that had nothing to do with SobelCo or 321 at Water’s Edge.”
A sustained slowdown in presales unfolded as competitors got condos under construction at nearby sites. San Jose says when SobelCo launched presales of 321 at Water’s Edge in 2016, “there were other [condo] buildings that were physically going vertical, which is always a challenge to somebody who hasn’t broken ground.”
Presales were handled by brokerage firm Engel & Völkers until SobelCo asked Douglas Elliman Real Estate to take over late last year. So far, all three units with private rooftop terraces have been presold. The dozen unsold units were priced in May from $2.3 million to $3.3 million. The highest price was for a 3,429-square-foot apartment on the ninth floor with three bedrooms, three and a half bathrooms, and terraces that face east and west.
“We feel they will ‘live’ more like an estate home than a condominium that’s got more of a narrow, shotgun feel,” says San Jose. Common-area selling points at 321 at Water’s Edge include a fitness center with ocean views, a swimming pool area overlooking the Intracoastal Waterway, a cocktail lounge in the lobby, and four elevators.
So far, most of the buyers are frequent South Florida tourists from the Northeast and the Midwest. Except for one Canadian couple, all the buyers through late May were U.S. citizens. “They’re not people who only come in winter,” says San Jose. “They’ll come sporadically throughout the year. They want a vacation home or a second home … a place their grown children are going to want to visit them as well.”
She says homeowners in west Broward County shopping for a smaller place have passed on 321 at Water’s Edge: “We have not seen buyers from out west here locally, selling their big homes and buying here.”
West Broward homeowners have played a more prominent role in another boutique condo project under construction farther north along Fort Lauderdale’s beach.
“We have the Weston-Plantation-Parkland type of empty nesters,” plus some buyers from the Northeast, says Adam Adache, the developer of 30 Thirty North Ocean, a 24-unit condominium at 3030 N. Ocean Blvd., across from the northern tier of Hugh Taylor Birch State Park.
Adache says the development of 321 at Water’s Edge looks like a success. “I think 321 has a nice location on the water,” he says. “It’s a nice project, and I am sure it will continue to do well.”
He says about 50 percent of the units at 30 Thirty North Ocean have been presold, and prices for the unsold units range from $1.2 million to $1.6 million. “We’re glad to be under construction and so are the buyers,” he says. “Sales always pick up after you start construction.”
The overall condo market in tri-county South Florida is leaning toward a buyer’s market, according to Miami-based real estate research firm CraneSpotters. Based on the pace of condo resales in the first quarter, CraneSpotters estimated on May 7 that South Florida has a nine-month supply of existing condos. (A six-month supply is considered a balanced market for buyers and sellers.)
The research firm’s months-of-supply estimates are based on existing condos formally listed for sale, and the calculation of supply excludes nearly 47,500 new condos in South Florida developments east of Interstate 95.
There is no shortage of new condo development on Fort Lauderdale’s barrier island, the location of such major projects as Auberge Beach Residences & Spa, Four Seasons Private Residences, Gale Boutique Hotel & Residences and Paramount Fort Lauderdale – which have a combined total of 485 condo units.
But Adache, a native of Fort Lauderdale, says there is a sizable market for smaller beach-area condominiums like 30 Thirty North Ocean, 321 at Water’s Edge, and Adagio Fort Lauderdale Beach, a 31-unit condo under construction at 435 Bayshore Dr. He figures competition from larger condo developments along the beach will diminish as they sell out.
“There’s a lot of condos on the market, but I think people are gravitating to boutique stuff,” he says. “There’s a lot of people out there that don’t necessarily want the real large projects anymore.”