X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

(Crystal Proenza is associate editor of Real Estate Florida.)

WEST PALM BEACH, FL- The construction company of Moss & Associates has completed CityPlace South Tower—a 420-unit luxury condominium tower located at 550 Okeechobee Blvd. Local brokers say the $106 million project developed by the Related Group is being delivered at an extremely challenging time for the West Palm Beach condo market, where many projects under construction have been stopped dead in their sites or have been canceled all together.

The 20-story condo, designed by Miami-based Roger Fry & Associates Architects, features 40 private villas as well as 9,333 square feet of ground floor commercial and retail space. Amenities include a connecting 685-space parking structure with a 22,940-square-foot roof-top recreation deck featuring a resort-style pool, spa, cabanas, fountains and gardens.

Calls to the Related Group were not returned last week. Back in May, Arturo F. Pena, senior project manager for the tower, told GlobeSt.com that despite the endlessly reported troubles in the multifamily sector, the building was already 87% sold. At that time he also revealed that the ground-floor retail space had been sold to two landlords who planned to sublease the space.

The development company is going to have a tough time actually filling the condo tower because the Downtown West Palm Beach market has so many condos to choose from, says Tal Frydman, vice president of investments in the Fort Lauderdale office of Marcus & Millichap. “It’s a great project, but I wouldn’t anticipate quick sales unless they’re significantly discounted units,” he tells GlobeSt.com. “People looking to buy are not going to pay top dollar unless it’s something very unique.” Even CityPlace, the 72-acre, $600 million mixed-use retail and entertainment complex that sits minutes away from the condo, has been struggling with its tenants over the past year, he adds.

Despite the negativity, when GlobeSt.com caught up with project manager Pena in May he said that the success of the project, even in this market, is more than just about where the building stands. “I think our companies are large enough that they’ve seen this coming,” he said. “The ups and down of real estate are something we’ve planned for.”

Jack McCabe, CEO of McCabe Research & Consulting LLC in Deerfield Beach, says Related Group’s project is coming to completion at potentially the worst time for new condos for West Palm Beach because of an historic oversupply of new and existing units. “Individual sales to consumers have absolutely fallen off the table, and many projects have seen absorption of one unit per month through 2008,” he says.

The slowdown has caused developers to look to move units in bulk. “We’ve just seen recent auctions of new condos as low as $140 per square foot,” says McCabe, adding that it wouldn’t be a surprise to see a bulk buy in the CityPlace South Tower by an investment fund formed by the Related Group and private-equity firm Lubert-Adler Partners LP. “They have purchased units in other Related Group buildings that have been slow,” McCabe reveals.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.