WEST PALM BEACH, FL-As it prepares for conversion of the 275-unit Strand rental property at 255 Evernia St. into for-sale condos, Atlanta-based Margolias Realty Group begins a two-year upgrade that will cost approximately $10 million. This takes its overall cost to more than $100 million as it assesses what to do with the building's 13,000 sf of ground-floor retail.
While the residential units were 100% occupied when Margolias acquired the property, the retail space was not fully developed, principal Darren Margolias tells GlobeSt.com. "The owners didn't push hard because they were going to sell," he explains.
"There are now four residential lofts on the ground floor, and we might like to use the retail space for additional residences," Margolias continues. "However, a $250-million waterfront-improvement project is taking place, and the City would like us to keep the retail, because they believe there will be additional demand for it along the Intracoastal here. We haven't made a final decision."
Conversion of the Strand comes on the heels of Margolias' completion of its first South Florida venture, Waverly at Surfside near North Miami Beach, a condo conversion that sold out in less than six months. It paid a JV between American Land Co. and Cornerstone Realty Advisors $91 million, or $330,909 a unit for the Strand. The property was completed in 2002 and, according to published reports, the previous owners' all-in cost was $56 million.
Margolias doesn't wince at the premium price his company paid, saying the Strand, "is one of the few Downtown residential properties directly on the Intracoastal, which gives 87% of the units a water view. In addition, it's just blocks from Clematis St., CityPlace and other important cultural, entertainment and shopping places." To add to these benefits, Margolias is upgrading the common areas, which include a pool and clubhouse, at an initial investment of about $2 million.
Units average 1,047 sf and range from 603 sf to 1,630 sf. For-sale prices have not yet been determined. At the time of the acquisition in April, however, Margolias' partner and father, Sol Margolias, told GlobeSt.com that unit prices "will probably be about $450,000 to $500,000."
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