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(Read more on the multifamily market.)

BILOXI, MS-Making its first foray in the local market, a Destin, FL-based developer is preparing to launch construction on a $200-million condominium development. The development team hopes to break ground on the 251-unit first phase by the end of the year.

Situated on nine acres at 2400 Beach Blvd., Revelay will total 380 to 390 units at completion. Sterling Development plans to wait until the first phase sells out before starting the second one.

Revelay will have one- and two-bedroom condos, ranging from 530 sf to 1,198 sf. Unit prices will begin at $300,000 and push slightly above $700,000.

Biloxi has been considered by many real estate professionals to be in a growth mode two years after Hurricane Katrina. Sterling Development’s director of marketing Michael McNeil says people are in a “wait-and-see” mode when it comes to buying condos. “The problem has been that a lot of condos announced pre-Katrina is still in the sales phase. And, people understandably are saying they’ll believe it when they see it,” he tells GlobeSt.com. “Once we get started, we’ll start to win over some of the skeptics.”

But, McNeil says buyer caution has not impacted Sterling’s sales. “Sales got off to a great start and have tapered a bit during the past three to four months,” he adds. “We’re averaging close to 10 reservations a month.”

Presidian Cos. Ltd. of San Antonio also is experiencing somewhat of a slowdown for its $200-million, 18-acre Ocean Club Biloxi although its just-completed 120-unit Baymont Tower at 2060 Beach Blvd. is the 75% sold. “Over the past 90 days, we’ve had about 10 closings,” says Drake Leddy, Presidian’s president. “When you’re 75% pre-sold on your first phase, it takes a lot of worry out of the thing. But if I was someone who’d broken ground at less than 50% pre-sold, the rate of absorption might be problematic.”

The second phase, Gulf Shore Tower, won’t break ground until its presales hit the 50% mark. And, Leddy says condo sales in Biloxi aren’t particularly robust, but they have been steady unlike other areas of the country like South Florida and Las Vegas.

McNeil is confident that other developments will help spur condominium demand. “There’s a lot of money flowing into Biloxi from public and private sources,” he says, adding the $400-million expansion of the Mississippi Gulf Coast Coliseum at 2350 Beach Blvd. will be an important driver for the economy. “That’ll be a great opportunity to drive both rental and sales demand on our side,” McNeil says.

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