Peter Zalewski

Peter Zalewski is a real estate market consultant, non-practicing licensed real estate broker and columnist for The Real Deal who now answers reader questions about the South Florida real estate market in a new weekly Friday column. Questions and comments can be sent to southfloridanews@therealdeal.com. The TRD editors will choose which submissions will be addressed.

Question: We’re starting to see Miami Beach-like luxury developments expand to the north along Collins Avenue on the barrier island. How far north on Collins Avenue can high-end condo builders realistically go and still expect to find demand?

The ultimate address for South Florida’s preconstruction condo market from a pricing perspective is the South of Fifth neighborhood in the South Beach market, where the minimum presale buy-in amount for a unit starts at more than $1,650 per square foot.

The fact that South Beach is reportedly selling at some of the highest prices per square foot for condos is not a new trend, but what is noteworthy in this current boom is the attempt by developers to achieve South of Fifth prices in areas that are far removed from the southern tip of the barrier island.

Consider that preconstruction condo prices in the South of Fifth neighborhood range from a minimum asking price per square foot of more than $1,690 at the 321 Ocean Drive project to $2,700 at Marea South Beach, according to the latest Developers Pricing Survey produced by the preconstruction condo projects website CraneSpotters.com.

(For disclosure purposes, my firm operates the website.)

Moving north on the barrier island along the primary road – Collins Avenue, which is also known as State Road A1A – from South Pointe Drive, presale condo prices generally decrease, but that is not the case this time around.

For example, preconstruction prices at the Residences at the Miami Beach Edition project on 29th Street start at $2,300 per square foot. At the Faena House on 33rd Street in Miami Beach, the last known asking minimum price at the secretive project was more than $1,900 per square foot.

Preconstruction prices in the North Beach submarket of Miami Beach start at more than $575 per square foot at the handful of new condo projects that are currently marketing new units for sale. This minimum price is expected to increase as a number of announced towers are preparing to launch presales as soon as the fourth quarter of this year.

Traveling north up Collins Avenue, preconstruction condo projects in the town of Surfside are starting at $1,800 per square foot at the Surf Club Four Seasons Private Residences on 90th Street and more than $1,500 per square foot at the Fendi Chateau Residences on 93rd Street.

In the village of Bal Harbour, only one project – Oceana Bal Harbour – is going forward at this time. This project has a minimum asking price of $1,350 per square foot.

North of Bal Harbour in Sunny Isles Beach, preconstruction condo prices in this barrier island city are comparable to Miami Beach.

Minimum presale prices for new condos start at less than $500 per square foot at the Parque Towers on the west side of Collins Avenue fronting the Intracoastal Waterway, compared with nearly $1,270 per square foot at the Jade Signature on the east side of Collins Avenue facing the Atlantic Ocean.

It is worth noting, the Mansions At Acqualina has the highest minimum asking price per square foot in Sunny Isles Beach at $1,900.

Preconstruction condo prices north of Sunny Isles Beach drop off noticeably on the barrier island in Broward County.

In Hollywood, minimum presale prices range from $425 per square foot at the Seaside Village on the west side of Collins Avenue to $715 per square foot at the Sage Beach project that faces the Atlantic Ocean.

Preconstruction condo prices for the handful of other projects announced near State Road A1A in South Florida vary widely based on the city in which the towers are to be located.

For example, the minimum asking price per square foot is $400 per square foot at the Pompano City Place project in Pompano Beach, less than $500 per square foot at the 1200 The Ocean project in Hillsboro Beach and nearly $635 per square foot at the Paramount Fort Lauderdale Beach, according to the Southeast Florida MLXchange.

The unanswered question going forward is whether investors will continue to pay rich premiums for preconstruction condo projects in the South of Fifth neighborhood of South Beach when new units are being offered at a fraction of the price just miles up State Road A1A.

Thought Of The Week: Argentina’s Latest Bond Default Raises Concerns In South Florida

Argentina – the South American country producing a steady flow of buyers of South Florida real estate – is facing an uncertain economic future following its latest bond default.

On Thursday, Argentina was declared in “default” by the credit rating agency Standard & Poor’s after failing to make the necessary interest payments to bond holders on some $13 billion in restructured debt, according to Bloomberg.

The missed payments represent the eighth time in Argentina’s history – and the second time since 2001 – that the country has officially “reneged” on its international debt obligations, according to The Economist. Argentina’s previous default some 13 years ago triggered an economic collapse that prompted many of the country’s citizens to emigrate to places like Spain and the U.S., with Miami being one of the most popular destinations.

It is unclear what impact this latest default will have on Argentina’s economy or emigration rate in the months and years ahead.

What is clear is that investors from Argentina, both individual investors and condo developers, have played a key role in South Florida’s recovery from the 2007 real estate crash.

As recently as last month, an Argentine grocery store magnate led a group that paid a record $125 million for a 1.25-acre site on the north bank of the Miami River in Greater Downtown Miami.

Buyers from Argentina represent a notable percentage of the estimated $6.4 billion in international purchases of Florida real estate last year, according to Florida Realtors. For Argentine buyers, the tricounty South Florida region of Miami-Dade, Broward and Palm Beach is the primary location for their real estate purchases in Florida.

In 2013, buyers from Argentina accounted for about 11 percent of the international purchases in the Miami area, 13 percent of the deals in the Fort Lauderdale area, and eight percent of the transactions in Palm Beach County, according to Florida Realtors.

Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.

The Del Vista Towers

For nearly a year, a condominium association has been battling with a homeowner who sued when the association tried to ban his dog.

The plaintiff, Alexander Warren, asked Miami’s Del Vista Towers Condominium Association to overlook its “no-pet” policy to accommodate his dog, a service animal, according to the Daily Business Review.

But the board refused, and Warren filed a suit in Southern District court, claiming failure to reasonably accommodate.

The condo association has argued that Warren’s case is baseless, because his dog is a pit bull — a restricted breed in Miami-Dade.

On Tuesday, a judge denied the condo association’s motion for summary judgment.

“The HUD rulings and notices make clear that an emotional support animal need not be specifically trained, because the symptoms the animal ameliorates are mental and emotional, rather than physical,” Judge Jose Martinez wrote.

“In the present case, if the county ordinance were enforced, it would violate the FHA by permitting a discriminatory housing practice. In failing to grant plaintiff’s request to live with his assistance animal because of the dog’s alleged breed, plaintiff is not afforded an equal opportunity to use and enjoy his dwelling.” [DBR] – Christopher Cameron

300 Indian Road

A West Indies-style house is coming to Indian Road in Palm Beach.

The two-story residence at 300 Indian Road is owned by private-equity specialist David Ferguson and his wife, Kathleen, of New York City, who paid $1.93 million for the property, according to the Palm Beach Post.

Last week, the Architectural Commission gave a thumbs-up to plans by architect Roger Janssen of Dailey Janssen Architects in West Palm Beach.

“I’d call it an eclectic Island Colonial, if I had to name it,” Janssen said of the 5,757-square-foot house.

Among the architectural elements is a corner structure housing the dining room designed to resemble a buttery, an outbuilding with a ziggurat-style roof peculiar to Bermudan architecture. “It’s a nostalgic feature,” Janssen said. [PBP] – Christopher Cameron

BankUnited

BankUnited is making moves to open a new branch in Fort Lauderdale.

The Miami Lakes-based bank filed plans with regulators to operate a branch at 1815 East Commercial Boulevard, according to the South Florida Business Journal.

The bank already has 22 offices in Broward County, including three in Fort Lauderdale. [SFBJ] –Christopher Cameron

Daniel Fournier

A Boca Raton man faces charges after allegedly running an illegal Craigslist apartment scheme.

Daniel Fournier, 29, allegedly collected security deposits on three separate occasions after showing a house in Boca Raton. But authorities claim that, after he collected the money, he notified the renters that the house was no longer available, according to the Palm Beach Post. Fournier isn’t the homeowner. He rented a room in the house from an 81-year-old. Fournier allegedly told the house hunters that the homeowner was his aunt and that he held power of attorney.

Fournier allegedly fleeced $4,209 from renters. He now faces three counts of larceny of more than $20,000 and one count of fraud. [PBP] –Christopher Cameron

Top stories over the weekend on The Real Deal:
1. Moishe Mana, Tony Cho sue each other over Wynwood deal
2. Major homebuilders report brisk Parkland sales
3. South Florida won’t see peak prices again until 2019: report

Faena House and Chris Burch

From the New York site: New York City branding mogul Chris Burch, who is the founder and CEO of Burch Creative Capital, a firm that manages venture investments and brand development, has picked up a new Miami Beach home.

Burch is purchasing a condo in Argentinean developer Alan Faena’s Norman Foster-designed South Beach project, Faena House, according to the New York Post. Burch is already an investor in Faena Hotel in Buenos Aires.

Many units in the Miami building include wraparound terraces and unobstructed waterfront views. However, it’s unclear exactly which unit Burch is buying.

In April, a $50 million duplex penthouse at the building that went under contract.

Other notable buyers in the building include Goldman Sachs’ Lloyd Blankfein, Larry Gagosianand Apollo Global chief Leon Black. [NYP] – Christopher Cameron

Latest foreclosure report from Condo Vultures

South Florida foreclosures continued to decline last month, according to the latest report from Condo Vultures.

Miami-Dade, Broward and Palm Beach counties had a substantial year-over-year decline in foreclosures, from 3,150 in July 2013 to 1,507 last month. The region had 11,785 foreclosures during the first seven months of 2014, way down from 27,959 during the same period in 2013.

In Miami-Dade, foreclosures dropped from 1,068 in July 2013 to 448 last month. The county’s year-to-date foreclosures fell from 10,423 to 4,014. Broward County’s year-over-year foreclosures declined from 1,536 to 693 last month, while its year-to-date foreclosures dropped from 11,656 to 4,997.

Palm Beach County had a smaller decline, from 546 foreclosures in July 2013 to only 366 last month. The county’s year-to-date foreclosures dropped from 5,880 to 2,774. — Eric Kalis

2535 Lake Avenue (inset left: Joseph Blount; inset right: Richard Yulman)

Businessman Joseph Blount sold his Sunset Islands home for $16 million to a trust controlled by former Serta International chairman and CEO E. Richard Yulman, The Real Deal has learned.

Miami-Dade County recorded Blount’s sale of the nearly 9,700-square-foot house at 2535 Lake Avenue on Friday. The Chalk Ping Pong and Billiards Lounge CEO paid about $5.6 million for the waterfront property in June 2004. The home was originally constructed in 1939.

Yulman did not obtain financing for the purchase of the six-bedroom house.

Jeri Jenkins of Coldwell Banker Residential Real Estate was the listing agent. The home was listed with an $18.9 million asking price.

Property features include a saline pool, outdoor tub and shower and enough dockage to fit two large boats.

Blount spent more than 20 years as the CEO of furniture chain PierceMartin before launching Chalk in January 2011. A Democratic fundraiser, Blount held a private donor event attended by President Obama at the home in June 2013.

Al Adelson and Chapel By the Lake (Credit: Flickr)

First Baptist Church completed the sale of the Chapel-by-the-Lake condo development site in West Palm Beach.

The church received $21 million from Al Adelson’s G.A.K. Partners, which wants to construct a high-rise condo building on the property. Three legal actions involving the project are pending. The transaction originally had a $23 million sale price, but that was reduced after the developer scaled down the proposed project.

First Baptist plans to use the sale proceeds for its main campus on Flagler Drive and neighboring parcels it previously purchased and plans to develop, according to the Palm Beach Post. The church also intends to launch as many as 100 churches in South Florida over the next decade.

West Palm commissioners approved G.A.K.’s design of the public walkway around the church and the protection of a 100-foot-long submerged parcel north of the project last month. [Palm Beach Post] — Eric Kalis

Mount Sinai Medical Center

As Mount Sinai Medical Center gets ready to issue nearly $166 million in bonds to help fund an expansion of its Miami Beach campus, two major rating agencies gave moderate grades to the offering.

The nonprofit is slated to issue the tax-free bonds on Aug. 20. A Miami Beach agency is handling the offering. Mount Sinai plans $205 million in improvements to the campus.

Moody’s Investor Service gave the bonds a “Baa1” rating, according to the South Florida Business Journal. That grade represents a moderate risk level. The latest rating is an improvement to the previously assigned “Baa2” grade, however.

Fitch Ratings gave the Mount Sinai bonds a “BBB” grade, which is similar to the Moody’s rating. [South Florida Business Journal] — Eric Kalis

Village Commons

Atlanta real estate investment and management firm Jamestown acquired the Village Commons shopping center in West Palm Beach.

Jamestown paid about $51 million for the 701-971 Village Boulevard site in a transaction recorded on Thursday, according to Palm Beach County records. The 169,118-square-foot center is anchored by Publix and includes a mix of traditional retail, restaurant, medical and banking tenants. It is 92 percent occupied.

No financing was recorded.

San Francisco-based Village Commons WPB sold the center to Jamestown. The company paid $25.7 million in December 2010 for the two-property site.

Jamestown now has 11 real estate assets in Florida, according to Monday’s written statement released by the firm. It plans to spend $4.5 million in capital improvements, including an expansion of the existing Publix to 45,600 square feet as part of a new 20-year lease. Other Village Commons tenants include Cold Stone Creamery, Duffy’s Sports Grill, Panera Bread and Weight Watchers.

Village Commons was built in 1987 and renovated 20 years later. — Eric Kalis

Oceana Key Biscayne rendering and Eduardo Costantini

1. Consultatio begins closings at Oceana Key Biscayne [exMiami]
2. Updated list of the 25 priciest South Florida homes up for sale [Curbed]
3. PortMiami tunnel officially open to traffic [Miami Herald]
4. Boca’s Yamato Village Center changes hands [Sun-Sentinel]
5. Zillow: Millennials still not buying houses [South Florida Business Journal] — Eric Kalis

A rendering of the proposed DaniaLive Marketplace

Once the tallest wooden amusement park ride in Florida, the Hurricane roller coaster could give way to a massive retail plaza.

What’s left of the 100-foot-tall Hurricane is little more than a timber skeleton sitting near I-95 in Dania Beach. Years ago, the roller coaster was supposed to be demolished but never was, according to the Sun-Sentinel.

But the coaster will soon fall now that Bob Shapiro, president of Aventura-based Master Development, is planning to develop DaniaLive Marketplace, a 1.3 million-square-foot “open air” shopping center, on the site. Shapiro said he expects to complete deals with the eight land owners shortly after he receives approval from the city this fall. [Sun-Sentinel] — Christopher Cameron

A rendering of the new hotel

Construction is finally kicking off on a hotel adjacent to Palm Beach County’s convention center.

The project had faced more than a decade of setbacks and delays, but crews began excavating the site in late-May, and vertical construction on the 403-room Hilton hotel is scheduled to begin later this month, according to the Palm Beach Post. Construction is expected to be finished by the end of 2015.

“The first thing [the hotel] is going to do is allow us to bid on numerous pieces of business that have wanted to come to West Palm Beach but cannot because one of the requirements is a connected hotel,” convention center general manager Dave Anderson said.

Tourism industry leaders have long argued that the lack of a hotel adjoining the convention center on Okeechobee Boulevard has been holding it back. But now that the construction is underway, those officials are already trying to attract larger conferences. [PBP] – Christopher Cameron

Somerset Shoppes

Saks Off Fifth has signed a 10-year lease to anchor Somerset Shoppes in Boca Raton.

The 23,343-square-foot space, located at the northeast corner of Lyons Road and Glades Road, replaces what used to be a Loehmann’s department store, according to the South Florida Business Journal.

The retailer is joining tenants including Michael’s, T.J. Maxx, Men’s Warehouse and The Original Pancake House.

Saks is expected to open in the first quarter of 2015. Randy Tulepan, vice president of New York-based Roberts Equities, represented the owner, and David Emohovich from Katz and Associates represented the tenant. [SFBJ] – Christopher Cameron

Allegro, a senior living community, that is under construction in Boynton Beach

A senior living community under construction west of Boynton Beach is attracting praise as well as criticism, with residents forming the Allegro Project Committee to keep track of construction.

“The whole thing is a horror show,” Marvin Kaufman, the president of the Valencia Lakes Homeowners Association, told the Palm Beach Post.

Kaufman added that the two-story buildings, dubbed the Allegro at Valencia Lakes, have been changed to three stories and that the water retention area decreased in size.

However, others say that the 136-unit apartment project is good for the area and will bring economic development.

“Everything that’s been done has been approved by the county,” said Community Director Martin Katz. “Once we’re up and running everyone will be happy.” [PBP] – Christopher Cameron

Top stories yesterday on The Real Deal:
1. NYC branding entrepreneur picks up ultra-luxury Miami condo
2. Condo developers attempt to push north with pricey new towers
3. Businessman Joseph Blount sells Miami Beach home

Lewis “Mike” Eidson

Attorney and longtime arts supporter Lewis “Mike” Eidson is leading a group pitching a two-theater complex on the site of the historic Coconut Grove Playhouse.

Under Eidson’s proposal, a 750-seat theater would be added to the 300-seat venue already planned for the site. A parking garage and office space would also be included. Eidson estimated the expanded complex has a $45 million total cost.

Eidson suggested Miami’s Adrienne Arsht Center for the Performing Arts as the operator of the larger theater, according to the Miami Herald. The 300-seat theater is set to become the new home of GableStage, based on the January state approval to transfer the shuttered theater and surrounding land to Miami-Dade County and Florida International University. The county is receiving proposals from architects for the new theater.

The chairman of the Performing Arts Center Trust and a former Coconut Grove Playhouse board member, Eidson envisions “a civic center dedicated to great theater in a modern playhouse complex” at the 3500 Main Highway site. [Miami Herald] — Eric Kalis

Fort Lauderdale Aquatic Complex

A Fort Lauderdale board asked city commissioners to reconsider a nearly $34 million aquatic center along the Intracoastal Waterway.

During their meeting on Monday, members of the city’s Beach Redevelopment Board unanimously recommended that commissioners come up with a new project for a site that was once planned as a new home for the International Swimming Hall of Fame. The board expressed doubt about the aquatic center being an economic engine for Fort Lauderdale Beach. About $25 million in city redevelopment property taxes is allocated to pay for most of the project.

“In my heart of hearts, I’d like to see this project eliminated entirely,” board member Dan Matchette said, as cited by the Sun-Sentinel.

Some board members suggested simply replacing the existing aquatic center’s bleachers and improving the bathrooms instead of overhauling the entire facility. The idea of a three-story parking garage on the property was also questioned by the board.

Commissioners are expected to vote on a site plan for the aquatic center during their Aug. 19 meeting. [Sun-Sentinel] — Eric Kalis