Skyline Scenarios

Its dazzling curvy design and sheer height would distinguish a planned apartment tower from the rest of Fort Lauderdale’s boxy skyline. The unnamed 47-story, 830-unit rental tower downtown in the Rio Vista neighborhood just south of the river would rise to 563 feet, making it the tallest building in Fort Lauderdale.

Planned for a site near the New River on SE Third Avenue, the rental skyscraper could also become one of the city’s most architecturally interesting buildings. Designed by New York-based architecture firm ODA, the apartment building would have a bubbly, cylindrical appearance. The design looks like a modern take on the Mid-Century architectural styles of such venerated properties as the halo-topped hotel at Pier Sixty-Six in Fort Lauderdale and the KenAnn office building, a tubular landmark in Oakland Park.

Brooklyn-based Dependable Equities, the company behind the planned Rio Vista apartment building, has millions of reasons to push for its construction as soon as possible. In 2022, the firm paid $22.9 million for the development site at 633 SE Third Ave., now occupied by a 44-year-old, three-story office building near the Broward County Courthouse. Then the company successfully navigated the city approval process. The Fort Lauderdale City Commission approved the 47-story rental development in April 2023.

The planned tower would have a tapered appearance achieved by using larger floorplates on the lower floors and smaller ones on upper floors. From floors 10 to 39, the floorplate sizes gradually decline from nearly 21,000 square feet to about 13,200 square feet at the 39th floor, then taper further to about 7,900 square feet on the 47th floor, culminating what Dependable Equities called a “sculptural” tower design in paperwork filed with the city. On its website, the architecture firm ODA describes the dominant design theme of the apartment building planned at 633 SE Third Ave. as “a sequence of stepped, rounded volumes that elegantly ease the massing of the tower as it rises.”

Farther north on Third Avenue in Flagler Village, Dependable Equities owns another development site for another ODA-designed high-rise, a 959-unit rental apartment building called Ombelle. The striking 43-story design features two tapered towers wrapped in steel grids that appear to bend apart like an accordion. Dependable Equities has held on to the development site at 300 NE Third Ave., now a vacant lot, for almost three years. The company bought the land in late 2021 for $27 million. It remains to be seen exactly when construction of the Ombelle project or the high-rise apartment building in Rio Vista might start.

Like other high-rise rental developers, Dependable Equities faces expensive obstacles to starting construction, including sharply higher post-pandemic costs for insurance, loans, labor and materials. Credit availability is also an issue for some developers of high-rise rental apartment projects.

“In the past two years, construction costs have been the biggest challenge to apartment projects getting built. But now, it’s going to be availability of capital and banking,” says Jeffrey Burns, founder and CEO of Affiliated Development, a Fort Lauderdale-based developer of apartment buildings with affordable housing components. “We’re probably going to see, in the next year or two, a lot of projects that aren’t advancing because the economics don’t make sense. There are going to be some deals out there that can’t get financed. … Banking has tightened up.”

Developers say the loans, if any, that construction lenders are making are smaller than in recent years as a percentage of a project’s total cost. As a result, rental developments – also known among real estate pros as multifamily projects – can be harder to get financed and built than condo developments.

Indeed, among other local condo developments, Miami-based Related Group expects to break ground in 2025 for Andare Residences by Pininfarina, a 45-story condo development with 163 units in downtown Fort Lauderdale. Locally based Ocean Land Investment Inc. is seeking preconstruction buyers for Sixth & Rio, an eight-story, 94-unit condo development at 501 SE Sixth Ave. Miami-based Newgard Development Group has launched preconstruction sales for Natiivo Fort Lauderdale at 200 W. Broward Blvd., designed as a 40-story condominium with 384 fully furnished units licensed for short-term rentals. Beyond downtown and closer to the beach, Orlando-based Tavistock is redeveloping the Pier Sixty-Six property as a resort and marina with a residential hub, 92 luxury condo units in two 11-story buildings and two four-story buildings.

“You presell the condos, you decrease the amount of dollars you need from a construction lender and de-risk the project for everybody involved. That’s why these deals can move forward,” says Harvey Hernandez, founder and CEO of Miami-based Newgard Development Group. “It’s very challenging times for multifamily [rental] developers,” he said. They face high construction costs “plus elevated capital costs and elevated operating costs once the properties open, like insurance. These numbers don’t work.”

Of course, Dependable Equities could try to sell its 47-story and 43-story rental projects as fully approved, shovel-ready residential developments in a growing city.

Despite that storm of challenges facing multifamily developers, Fort Lauderdale has a tight and pricey rental housing market that could use more supply. The city’s apartment vacancy rate was just 7.2 percent in the January-March period with an average asking rent of $2,379 a month, the fourth highest among major U.S. metropolitan markets, behind only Miami ($2,471), Palm Beach ($2,478), and Stamford, Connecticut ($2,690), according to the Miami Realtors Association.

During the first three months of the year, 10,847 apartments were under construction in Fort Lauderdale, which will expand the city’s supply of rental units by 10.4 percent, Miami Realtors reported. But construction still hasn’t started at many rental development sites in and around downtown – including the two Third Avenue sites that cost Dependable Equities nearly $50 million.

“They’re not alone,” Hernandez said. “There’s got to be at least 20 projects ready to go in that neighborhood, in downtown Fort Lauderdale, Flagler Village and south of the river. You can call it shovel-ready, or close to being shovel-ready.”