A new food-linked landmark is coming out of the ground at a busy intersection on Federal Highway just east of Broward Health Medical Center. A Whole Foods Market grocery store will open there as part of a mixed-use real estate development with 243 apartments and a six-level parking garage. Construction of the eight-story project at Federal Highway and SE 17th Street began about a year ago and is expected to conclude by early 2021. The development, called 501 Seventeen, will test the drawing power of new apartments with an average monthly rent near $2,500 in an area well south of the city’s central business district – yet well stocked with major employers.
“We think it’s a phenomenal location,” says Jim Stine, president of Ram Realty, the Palm Beach Gardens-based developer of 501 Seventeen. Amazon-owned Whole Foods apparently agrees. Ram Realty originally designed the development with a 32,000-square-foot grocery store that would operate under Whole Foods’ discount 365 brand. But Ram redesigned the development with a regular Whole Foods Market measuring 49,000 square feet after a site tour by top executives of the grocery company. “They decided no, this site’s too good, we need a bigger store,” Stine says. Competition awaits: The Whole Foods store will be a short drive from a Publix Supermarket just south of downtown along Andrews Avenue. “That Publix store is one of the top five in the state,” he says.
Competition also looms for the rental component of the development, because apartment construction is surging in the downtown area and Flagler Village, and thousands more are planned just south of downtown. “I think we’re going to see softness in the market, just because you can’t have all that supply delivered and not have an impact,” Stine says.
The development of 501 Seventeen is part of a broader trend toward putting more new apartments just south of downtown, across the Tarpon River in a neighborhood occupied by several major employers, including the Broward Health Medical Center and Broward County Courthouse, and located near Port Everglades and Fort Lauderdale-Hollywood International Airport to the south. The area’s proximity to marinas also has attracted many residents who work in the yachting industry, says Native Realty founder and CEO Jaime Sturgis, who has a home near the site of 501 Seventeen.
The area around the retail and residential development site also is attractive to office-space users in Fort Lauderdale who want to avoid the congested Broward Boulevard corridor downtown, says Joseph Byrnes, senior vice president of Berger Commercial Realty, which is marketing space at the 550 Building, a seven-story office building under construction at 550 S. Andrews Ave. “We’re trying to promote it as an easier way to get out of town than using Broward Boulevard … with easier access to 84 and 595,” he says.
The city government has approved 3,423 residential units south of the Tarpon River – up from 2,227 two years ago – in an up-zoned district known as the Downtown Regional Activity Center, which includes the central business district and adjacent areas north and south of the river.
Property prices have jumped in an area that some brokers nicknamed “SOLO,” short for South of Las Olas. Sale prices for SOLO land – directly south of downtown Fort Lauderdale from Las Olas Boulevard to State Road 84 – have averaged $4.9 million per acre so far this year, more than double the average of $2.4 million per acre in 2016, according to market research by Colliers International and CoStar.
The site certainly didn’t come cheap: In 2018, Ram Realty bought the 3.2-acre development site for $18.5 million from Hudson Capital, which paid $7.5 million in 2004 and 2005 for the parcels comprising the site, according to real estate news website The Real Deal.
City zoning for the site limits building height to eight stories, which limited the number of apartments to 243. “It’s a relatively small number of units … That’s the most we could fit into the envelope,” Stine says.
Nevertheless, high-rise development in the downtown area is starting to spread south of the river, says Bradley Arendt, a Fort Lauderdale-based director of the Urban Core division of brokerage Colliers International. From downtown south across the river to Ninth Street, “you have the same zoning,” Arendt says, and in that area, “pretty much all of the development is multifamily [housing].”
Developers have thousands of apartments under construction in downtown Fort Lauderdale and a bit farther north in Flagler Village, including such projects as Quantum at Flagler Village (337 units) by Prime Hospitality along North Federal Highway, Residences of Las Olas (380 units) by locally based Stiles and New York-based PGIM Real Estate on North New River Drive East, Las Olas Walk (456 units) by Zom Living at a site near Las Olas Boulevard just east of the Kinney Tunnel, and X Las Olas (1,214 units) by Property Markets Group at the old Las Olas Riverfront property.
But Ram Realty believes the rental component of 501 Seventeen “is somewhat insulated from all the supply that’s being added in the downtown and Flagler Village markets,” Stine says. “There’s a lot of employment down there. We’re right across the street from Broward Health.” The 501 Seventeen development will have apartments averaging just under 1,000 square feet in size, and monthly rent equal to about $2.50 per square foot, he says.
Just south of downtown, most apartment developments are still in pre-construction phases. Only two major ones were under construction recently: 501 Seventeen and an unnamed 20-story, 230-unit apartment building, the second phase of an apartment development by Miami-based Related Group that began with the existing New River Yacht Club, a 24-story, 249-unit building on the south bank of the Tarpon River.
“We hope it stays that way for a while,” Stine says. “Given the political climate in Fort Lauderdale, I think there’s probably a good chance you won’t see many big projects approved in the short term.” Even if Ram ends up offering incentives to lure tenants – one rent-free month, for example – Stine says it would be a temporary tactic that would just delay the planned, eventual sale of 501 Seventeen. “I think the impact of that is not going to be catastrophic,” he says. “In a worst-case scenario, it means we own it longer.”