West Palm Beach has more than 20 condominium and multifamily projects planned or under construction, and almost all of that is in downtown West Palm.
Thirteen of those are condo projects, with 2,052 units, and at least eight apartment projects with about 2,000 planned or under construction. Most are concentrated in the area between Palm Beach Lakes Boulevard at the north end, Okeechobee Boulevard at the south end, Flagler Drive on the east end, and Australian Avenue on the west end.
Those additional units will generally be welcome in an area where demand exceeds supply, say local real estate pros. “Right now we need more product developed,” Robert Kemp, a Realtor who markets new condos in the CityPlace South Tower, told The Real Deal. “We have only 22 more developer units to sell. Once this is done, there are basically no new condos to offer. Prices will keep going up.”
The most expensive planned condo project is the Bristol, at 1112 South Flagler Drive, across from the Intracoastal Waterway. It has 69 units, with an average price tag of about $10 million. Prices range from $1,350 per square foot to $2,600 per square foot. Al Adelson, a partner at the building’s developer, Flagler Investors Inc., told TRD that more than 20 percent of the building’s square footage has been sold, and he hopes the building will sell out by March.
But Jack McCabe, CEO of McCabe Research & Consulting, is skeptical about the project. “I don’t think that will work — maybe on the other side of the Intracoastal,” he told TRD, referring to West Palm Beach. “That even exceeds the boom-time prices of 2005.” While West Palm needs more living quarters overall, “you can make the case that the upper end of the condo market may see a correction,” because it’s oversaturated, McCabe said.
As for apartments, the 85-unit Alexander Lofts is 55 percent occupied, according to sales staff. It opened in June at 326 Fern Street. Its studio, one-bedroom and two-bedroom apartments start at 550 square feet and range in rent from $1,335 to $2,450.
McCabe expects apartment projects to thrive. Aside from Alexander Lofts, “existing apartments and condos for rent are essentially full — 95 percent occupancy and above,” he said. “We are looking at rental rates increasing 10 percent or more annually. There’s growing demand, but finite inventory. Little has been built since 2008 to 2009.”
Veteran real estate attorney Harvey Oyer of Shutts & Bowen said that what might work best in downtown West Palm is a combination of ultra-high end projects like the Bristol and micro apartments, such as 400-square-foot to 550-square-foot units being considered by developer Jeff Greene at his 550 Banyan Boulevard property.
“We need something that’s different in price, size and location,” Oyer said. “We want to see the market get better, but the downside is you’re pricing people out. That’s why building in fringe areas, or denser projects, or smaller units may take hold.”