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FORT LAUDERDALE, FL-Locally based Ellis Diversified Inc. has acquired just more than 2.1 acres in the Flagler Village section of Downtown for $12.5 million, which represents nearly $5.9 million an acre or $134.36 per sf. While the parcel, assembled from two different sellers contains structures, “the valuation is based on the land,” Adam Tiktin, senior associate in the local office of Marcus & Millichap, tells GlobeSt.com. Although Ellis has yet to determine a specific design for the parcel, “it will most certainly be a residential high-rise development,” Tiktin says.

Tiktin and associate Douglas Mandel assembled the land from two individual owners and represented both the sellers and Ellis. This is among approximately 27 Downtown acres the duo has listed or sold within the past nine months in transactions valued at more than $100 million. During that time prices for land have risen from a range of between $40 and $60 per sf to $150 per sf, and as high as $190 per sf, Mandel reports. Typically, the sellers are owners of small retail establishments or homeowners “ready to retire and looking to cash out,” he says.

“There really is a scramble to capture land in Downtown Fort Lauderdale, especially within the RAC-CC zoning district where there are no height and density restrictions,” says Gene Berman, a Marcus & Millichap managing director and regional manager of the office here. This is the most liberally zoned area of the city. However, the city and county hold control over how many residential condo units can be built, and the application process can take up to two years for approval.

Right now, there is a halt on units that are not yet under development. Tiktin says, “we expect approval for an additional 3,000 units in March 2006, but there is no clear window on when new units will be permitted. The city is pro development,” he adds, “so buyers are confident that units will be permitted in the future, and they are prepared to bank the land until they can develop it.” While they could construct office or retail properties, the payback for residential represents much more profit, he explains.

Among the buyers scrambling for land are local-area developers, such as Ellis, and others from California, all along the Eastern seaboard, Canada and abroad. Aventura-based Groupe Pacific acquired nearly 1.3 acres on Broward Boulevard for just more than $10.3 million. It plans a 48-story mixed-use retail, office, residential high rise, which Tiktin says, “is proposed, but not yet approved.” Claridge Homes, a major developer based in Ottawa, Canada, paid almost $5.3 million for a one-acre site at 33 NE Second Street that contains a three-story office building. It plans a 40-story residential condo there.

Of the current frenzy, Mandel says, “demand is still there and we think it will continue, but it may be at its peak. The area is effectively out of land, which makes high rises the only residential option. But a lot of fundamentals, such as interest rates, for example, won’t stay as strong. The pace of the frenzy is beginning to slow.”

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