Condo boom hits West Palm

[bobliocatt]

Once a struggling city along the northern cusp of South Florida's redevelopment craze, downtown West Palm Beach is becoming a condo tower boomtown.

More than 3,000 multifamily units, most of them for-sale condos, are under way or have opened this year in the downtown business district.

The numbers are staggering, considering that this time last year, there were one-third fewer residential projects being floated for the 86,000-resident city, estimates by Miami-based Integra Realty Resources show.

"It is a small city to have that many units, but it is the hotspot right now," said Bruno Picasso, a senior market analyst with Integra, a real estate appraisal and consulting firm. Integra estimates that as many as 3,500 condos are in the pipeline, including waterfront development along Flagler Drive just north of the central business district.

Snapping up urban slivers

The ability to sell units as quickly as new towers are announced has developers rushing to snap up urban slivers to put up condo towers, Picasso said.

Spreading out a few blocks in each direction from CityPlace, a mixed-use center on Okeechobee Boulevard, there are at least 10 new condo and three apartment buildings, generating 3,123 new units, city records show.

Those totals don't reflect projects north of the central business district or those that have just been announced.

"The city is on fire. All of a sudden, it is going to be a boom," said Mayor Lois Frankel. "There is going to be a huge transformation in the next few years."

West Palm Beach is spending more than $100 million to upgrade water and sewer systems, public amenities, sidewalks and transit systems, she said.

Condo construction in West Palm Beach stands to outpace downtown Fort Lauderdale, where 2,155 units are expected by 2005, data from Miami-based Market Analytics & Consulting shows. Downtown Miami is set to receive 7,417 new condo units, according to the data.

Fort Lauderdale's population is nearly double that of West Palm Beach. Miami is four times as populous.

"Just because that population can't be there today doesn't mean that it won't be there," said Dawn Soper, president of Market Analytics & Consulting. "I think that the new development is really fulfilling a market where we haven't had any supply."

Near-term supply still low

Despite all the projects on the horizon, supply is tight for near-term occupancy.

Miami-based multifamily developer The Related Group of Florida has introduced four condo projects containing 670 units in downtown West Palm Beach since last year. All but three units are sold.

"Until the last couple of years nothing new had been developed," said Related VP Barbara Salk. "I think there was pent-up demand for more obtainable housing." (That means units below $400,000.)

Prices at Related's 200-unit Slade are from $200,000 to more than $700,000. At the 304-unit Prado, units are priced from $125,000 to more than $300,000. Both buildings are under construction.

The 38-unit Villa Lofts hasn't broken ground, but is sold out at prices from $180,000 to more than $700,000.

Late last year, Related converted its 128-unit CityPlace rental tower on Okeechobee Boulevard into condos and sold out at prices from $175,000 to $229,000 within three months. The company is discussing whether to convert its remaining 318 CityPlace apartments into condos.

A feast for speculators?

Rapid sellouts have some market watchers concerned that West Palm Beach might be a feasting ground for speculative investors, who snap up units at discount pre-construction prices with plans to sell at a profit once opening day draws near.

Developers must typically sell more than half their units before a bank will give them a construction loan.

"I think the speculative buyer is bigger than we believe," said Michael Pappas, president of The Keyes Co., a real estate agency with 32 offices.

Developers such as Kolter Property Co., which is developing 822 units in downtown West Palm Beach, try to deter unit flipping.

"We try our very best," said John Tompson, Kolter VP of marketing." We don't allow people to list units for sale until the time of closing and we don't allow assignment of contracts."

Kolter is now building the 15-story City Plaza on Olive Avenue near Okeechobee Boulevard. The 351-unit building, slated to open next April, is 90 percent pre-sold. About 180 units of the second 471-unit tower, which has yet to start construction, also have been sold.

Tompson is bullish that West Palm Beach can absorb this wave of new construction so long as too many people "don't get crazy converting apartments into condos."

[prahaboheme]

Now that I'm back in FL for the summer I did a little trip south and passed through WPB. Tons of cranes and construction taking place, and I love the future potential of the city. I hope eventually there is one continuous streetwall along Clematis from Flagler to just before the train station, and then over through cityplace. This is already happening it seems. I noticed 4 large developments going up, and signs all over the place for things set to begin, mostly residential.

[bobliocatt]

I'm going to have to try to get down there for some pics this summer. Do you know if West Palm Beach has a building height restriction?

[prahaboheme]

I honestly don't know, but the airport is WAY too close to downtown for anything too tall I imagine. Regardless, WPB is one of the few cities in Florida that is building smaller buildings in the downtown area yet creating urbanity (or just adding to the urbanity that already exists). I was checking out the WPB city website and they have also put out bids for a new city hall that they are requesting to be a "timeless" design. I'm sure it will be in a Mizner influenced style.

[Urban_Legend]

I think Mizner's architecture is located primarily in Palm Beach and Boca Raton. But I could be wrong... I didn't know they wanted a new city hall. A couple years ago, they were talking about a new library, but that was put on the back burner, because of money. I saw the model, it was massive! While WPB doesn't have anytihng incredibly tall, it is very urban and walkable. New projects will link these "walkable corridors". For instance, Metropolitan and 610 Clematis will help link the Cityplace corridor with the Clematis St. corridor.

Also, there's an interesting project going on with the old county courthouse. It was built in the 1910's, as a nice Greek-looking design. Then in the 70's they needed more space, so they basically built a concrete box around the original building. How economical... In 1995, a new 15 story tower was built next door, giving them plenty of space. Now, they are removing the old 70's shell, revealing the original building back in its full splendor! It will become a county history museum. Good news!

[Brickell]

I think there's enough nimbys in Palm Beach to keep heights small. I also think this is a good thing. We have Ft. Lauderdale, Aventura or Miami if you want height. The whole county is growing ver fast.

I hope they get their act together and start to think about linking the west, where the biotech will be with the east with some kind of rail line.

[prahaboheme]

Rail would definitely be nice for WPB, and I think it would be the easiest to impliment of all the South Florida cities because of the vibrancy and street grid. It would be nice to see a few lines, one running through Cityplace, the Convention Center, and down by Clematis and another up and down Old Dixie crossing Clematis and yet another running out towards the beach. They could all be connected by an Intermodal Center with room for expansion. It would also be nice to run a line north (NPB) though that might be hard to convince for some because its a poorer neighborhood. What do you guys think?

[wolfdawg54]

I think that it would be a great idea. Linking the city together is very smart.

[bobliocatt]

There are plans to add a second route to Tri-Rail along the FEC railroad tracks. That would basically connect every major city's core in South Florida, to Miami's metrorail system. That would be a great start for West Palm Beach and Fort Lauderdale.

[wolfdawg54]

I have been waiting for that to happen. The three cities definitely need to connect with each other!