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JOCK FISTICK \/ SOUTH FLORIDA BUSINESS JOURNAL<\/figcaption><\/figure><\/div>\n\n\n\n
If developers are able to attract more of these high earners into their buildings, it could mean a big spending boost in the surrounding neighborhoods. Full-time residents tend to spend more time in town, and more money on services, than part-time international owners. Service businesses in many of South Florida\u2019s biggest condo markets, downtowns and the beaches, have been hurt especially hard by the drop in customers during the pandemic, so attracting more families could provide them with a much-needed lift.<\/p>\n\n\n\n
Condo developers also benefit as the once-sluggish condo market is now red hot, and they can charge significantly higher prices for the larger spaces.<\/p>\n\n\n\n
When Miami-based Shoma Group broke ground on its Ten30 South Beach condominium in March 2020, the project was slated for 43 units, each with one or two bedrooms. Shoma CEO Masoud Shojaee<\/a> found many buyers were people relocating from the Northeast and California seeking bigger units, so he started combining the spaces to create townhouses and penthouses. Three units were converted into a three-bedroom condo.<\/p>\n\n\n\n When the dust settles, Ten30 South Beach will have about 25 units, Shojaee said. The prices for a two- or three-bedroom penthouse are $1.4 million and $1.9 million, respectively.<\/p>\n\n\n\n \u201cThey want bigger spaces to create an office, a bar and a wine cooler,\u201d he said. \u201cIt\u2019s not so much the mentality of a second home here anymore. They are thinking of moving permanently. This will be a primary residence, so they want a bigger space to entertain their friends.\u201d<\/p>\n\n\n\n Many people from the Northeast are used to condo living, but it\u2019s impossible for working families to hold two Zoom calls in the same room, so the solution is more space, said Arden Karson<\/a>, managing principal of Miami-based real estate consulting firm Karson & Co. Many developers are talking to her about larger units, or creating flexible spaces that are easy to expand.<\/p>\n\n\n\n \u201cThe way we developers are looking at projects is changing,\u201d Karson said. \u201cYou can get premiums now for having more bedrooms. That\u2019s both on the rental side, as well as the condo sales side.\u201d<\/p>\n\n\n\n Buyers think bigger<\/strong> The strong demand from out-of-state buyers and the low inventory of single-family homes in South Florida is unprecedented, said C<\/p>\n\n\n\n CrossCountry Mortgage VP Matt Weaver<\/a>, who works in Boca Raton and has been in the industry for 21 years. With so few single-family homes to choose from, buyers are increasingly looking to condos, but smaller units won\u2019t cut it.<\/p>\n\n\n\n \u201cIt\u2019s not simple to come down to Palm Beach or Broward and find condos that will support a family of four,\u201d Weaver said. \u201cMost were constructed for secondary residences. These developers weren\u2019t forecasting a family of four with younger children coming down in this quantity.\u201d<\/p>\n\n\n\n Three-bedroom condo units at Solemar in Pompano Beach are virtually flying off the shelves, while sales of two-bedroom condos are lagging, said\u00a0Patrick Campbell<\/a>, executive VP at the Related Group, which is developing the oceanfront project. The Covid-19 pandemic delayed the main sales launch to September, but the project is already 40% presold. In several cases, buyers combined neighboring units to create 4,000- to 5,000-square-foot condos.<\/p>\n\n\n\n <\/a><\/p>\n\n\n\n \u201cIt\u2019s usually the opposite of that because people try to get a home on the ocean for the lowest price possible,\u201d Campbell said. \u201cPeople are leaving big homes in other states and creating homes, instead of vacation places.\u201d<\/p>\n\n\n\n When designing new condominiums in South Florida, the Related Group will use flexible floor plans so it\u2019s easier to combine units, he added.<\/p>\n\n\n\n November through January have been the best sales months at Turnberry Ocean Residences in Sunny Isles Beach, primarily because of buyers from the winter-stricken Northeast, said\u00a0Jim Cohen<\/a>, president of Fontainebleau Development. The larger units in the recently completed tower are selling faster than the smaller ones, and they\u2019ve even combined some units to create duplex-style condos.<\/p>\n\n\n\n A similar trend occurred at Fontainebleau Development\u2019s SeaGlass Jupiter Island project, where the larger condos were the first to be presold, Cohen said.\u201cIn our SeaGlass project, in two recent sales, the clients came out of 20,000- or 30,000-square-foot homes,\u201d he said. \u201cThey still demand a large space. They are just tired of upkeep for the home. They are downsizing, but still buying 6,000 to 8,000 square feet.\u201d<\/p>\n\n\n\n Fontainebleau Development is strongly considering more luxury projects in South Florida, as the demand for larger units will continue and few projects are under construction now, Cohen added.<\/p>\n\n\n\n Coming out of the Great Recession, South Florida condo developers built smaller units priced at under $1 million to attract Latin American investors, who would mostly rent them out, Fortune International Group President and CEO\u00a0Edgardo Defortuna<\/a>\u00a0said. That\u2019s why there were few three-bedroom condos in that development cycle.<\/p>\n\n\n\n \u201cAll of a sudden, three- and four-bedroom units are in more demand,\u201d Defortuna said. \u201cThe full-time resident, or at least a resident who will spend a significant amount of time here, will need more space. And they need more space because children might study at home, and the head of the household may need extra space for an office.\u201d<\/p>\n\n\n\n Supersizing condos<\/strong><\/p>\n\n\n\n Defortuna said he\u2019s looked at increasing the sizes of condos in his future projects along the beach to accommodate people moving to South Florida. Projects with units that were previously 2,000 to 4,500 square feet are now about 4,400 to 5,000 square feet. He\u2019s already combined some units at 57 Ocean in Miami Beach, which Fortune International represents, to create a four-bedroom \u201csky residences\u201d \u2013 home-size condos on an upper floor.<\/p>\n\n\n\n \u201cThe numbers look better if you do that,\u201d Defortuna said. \u201cThe price is more expensive per unit, but the total dollars are better [for the developer] on larger units than by dividing it into three.\u201d<\/p>\n\n\n\n The only question Defortuna has before launching a condo with larger units is whether people primed to move here can wait three or four years for a project to be completed. Many are racing to hit the South Florida sand now.<\/p>\n\n\n\n When creating larger condos, developers don\u2019t need to build huge amenity centers because residents already have space for hosting friends in their units, said John Farina<\/a>, CEO of New Jersey-based U.S. Construction, which is building the Ocean Delray and 1625 Ocean boutique condo projects in Delray Beach. He focuses on a fitness center, spa and pool.<\/p>\n\n\n\n Beachfront condos aren\u2019t necessarily competing with smaller condos, but with single-family homes in the same neighborhood. A 3,300-square-foot unit at Ocean Delray priced at about $5 million might sound expensive at first, but consider a relatively new oceanfront home in Delray Beach would cost well over $10 million.<\/p>\n\n\n\n \u201cIn certain markets, you really have a shortage of this type of product,\u201d Farina said.<\/p>\n\n\n\n Group P6 Managing Partner Ignacio Diaz<\/a>, who is building Royal Palm Residences in Boca Raton, said he wouldn\u2019t build a condo unit smaller than 2,000 square feet in a luxury project because buyers want more space. Since the Covid-19 pandemic, interest in his project spiked and all the buyers intend to live there, he said.<\/p>\n\n\n\n \u201cIt\u2019s not feasible anymore, the investor model with smaller units,\u201d Diaz said. \u201cThat model will slowly disappear.\u201d<\/p>\n\n\n\n In Aston Martin Residences in Miami, which Cervera Lamadrid represents, there has been more interest in larger units and some buyers have combined condos for more space as construction continues. While larger inventory is selling faster, there\u2019s still a market in Miami for smaller units that are more affordable, she said.<\/p>\n\n\n\n \u201cThe new construction will either skew smaller than the typical two-bedroom units, or go larger,\u201d Cervera Lamadrid said. \u201cDevelopers are thinking of both bookends, but less in the middle.\u201d<\/p>\n\n\n\n Read the full post here<\/a>.<\/p>\n\n\n\n![\"\"](\"https:\/\/www.57ocean.com\/wp-content\/uploads\/2021\/03\/Patrick-Campbell-1-1024x714.png\")
NICK GARCIA<\/figcaption><\/figure><\/div>\n\n\n\n![\"\"](\"https:\/\/www.57ocean.com\/wp-content\/uploads\/2021\/03\/Jim-Cohen-1024x660.png\")
JOCK FISTICK \/ SOUTH FLORIDA BUSINESS JOURNAL<\/figcaption><\/figure><\/div>\n\n\n\n![\"\"](\"https:\/\/www.57ocean.com\/wp-content\/uploads\/2021\/03\/defortuna-edgardo_750xx675-900-113-0.jpeg\")
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