The Real Deal Miami

Neighborhood dive: Deerfield Beach emerges from the sand

Investors and brokers say the city has a better value compared to markets like Boca Raton

January 28, 2016 03:00PM
By Francisco Alvarado

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Renderings of the Fordham and Elysian and a view of Deerfield Beach

Renderings of the Fordham and Elysian and a view of Deerfield Beach

Deerfield Beach, a quaint oceanfront city near the Broward-Palm Beach county line, has always been known for its laid-back California surfer vibes, where mansion seekers could find less expensive estates than in Boca Raton.

Now, Deerfield Beach is slowly emerging from the shadow of its more posh neighbor to the north.

Deerfield Beach

A map of Deerfield Beach

The past two years have breathed a glamorous dose of growth into Deerfield with the opening of the only Relais & Châteaux hotel, which caters to the Hollywood set, a slew of new restaurants and retail shops targeted at affluent crowds, and new investment by developers looking to capture a share of the boutique luxury condo market.

Ignacio Diaz, co-owner and director of Group P6, which is developing two buildings with a total of 16 units, said Deerfield Beach has tremendous potential. “There are very few places in Florida so close to the beach that is not over-developed,” Diaz said. “Because the city restricts building heights, Deerfield Beach doesn’t have huge high rises or monster developments.”

As a result, developers focus on offering smaller, yet equally luxurious, condo buildings like those found in Sunny Isles Beach, Miami Beach, and other oceanfront cities, Diaz said. “The price per square foot is a great deal for end-users,” he added. “That is what attracts and appeals to buyers about Deerfield Beach.”

On the commercial side, Deerfield Beach experienced a flurry of trades in 2015 that illustrates the bullish nature of investors in the city. This past April, the Shoppes of Hillsboro, at 2201-2260 West Hillsboro Boulevard, sold for $10.5 million to a partnership between BREF Hillsboro and Dhanya of Miami. The sellers, Kenneth Israel Shoppes of Hillsboro LLC, paid $9 million for the 61,165 square-foot retail center in 2005. The tenant mix includes medical, financial, clerical and food service businesses, and sundry retail and services.

A month later, a 2.1-acre property at 1335 South Federal Highway that was the former site of Nielsen’s Furniture sold for $3.1 million. The buyer, Federal and 13th LLC, plans to redevelop the property as a gas station and convenience store. An adjacent building at 1307 South Federal Highway will be leased to office and retail tenants.

In November, Fairlead Commercial Real Estate purchased a Class A office property at 800 Fairway Drive for $21 million from American General Life Insurance Company. And last month, Publix bought the Hillsboro Square shopping center for $45 million, paying $287 per square foot. The previous owner, DDR paid $19.2 million for the 13.7-acre property in 2002.

Signs of change

 Room rates range from $415 to $1,150 a night, prices previously unseen in Deerfield Beach  

Hollywood Edward Walson ushered in a new era for Deerfield Beach when he opened the Royal Blues Hotel & Chanson Restaurant at 45 Northeast 21st Avenue in December 2014. His star-studded clientele includes Oscar-winning director Woody Allen, daytime soap opera queen Susan Lucci and Cuban American actor Sandy Garcia.

Further cementing Royal Blues’ high-flying status is Walson’s partnership with Relais & Chateaux, the exclusive French luxury boutique hotel and restaurant brand. Room rates range from $415 to $1,150 a night, prices previously unseen in Deerfield.

In November, Oceans 234 at 234 North Ocean Boulevard reopened after undergoing a $1.5 million renovation that now provides floor-to-ceiling glass views of the Atlantic. The private dining area was also expanded, going from 20-seat capacity to nearly 50. The menu was also revamped to include adventurous dishes like lobster-stuffed potato skins with creamed spinach, bacon, Vermont white cheddar, and truffle salt.

Earlier this month, city commissioners approved a redevelopment plan for the city’s old downtown. The newly named “Pioneer Grove” will take up 119 acres between the Hillsboro Canal and Southeast Seventh Street, to the north and south, and between Dixie Highway and Sixth Avenue to the east and west. The land use changes encourage commercial and residential development, while limiting industrial uses. For instance, the new rules would allow developers to build double the commercial space, while increasing the number of residential units from the current 128 to 2,150 units.

The city would also allow buildings to reach up to five or six stories on the north side of Hillsboro Boulevard and four or five stories on the south side of the main thoroughfare.

Transportation

Deerfield Beach has a free community bus service that operates only on weekdays from 8 a.m. to 4 p.m. The first route runs east to west, beginning near Dixie Highway and Hillsboro Boulevard and ending at the Deerfield Mall at 3668 West Hillsboro Boulevard. The second route runs from north to south, beginning near Dixie Highway and Hillsboro Boulevard and ending at Broward Health North at 201 Sample Road. Both routes offer connections to Tri-Rail and Broward County Transit buses.

The city’s main artery is Hillsboro Boulevard, connecting motorists to the Florida Turnpike, I-96 and Dixie Highway.

Most expensive residential sale

Single-family: The Cove, a 6,283-square-foot home with six bedrooms and seven bathrooms, that sold for $2.3 million
Condominium: Unit 307 at 701 Southeast 21st Street, a 2,380-square-foot unit with three bedrooms and three bathrooms, for $1 million

 Increase in average rent over the last year: 25% for a two-bedroom

Residential broker’s take

“People love Deerfield Beach for its close proximity to the beach, the retail and the restaurants, and obviously its charm. It has very good price points and is centrally located between West Palm Beach and Fort Lauderdale. Unfortunately, we don’t have more inventory out there because people are so interested in Deerfield Beach,” said Vickie Arcuri of EWM Realty International.

Commercial take

“Deerfield Beach is enjoying a strong surge of interest. It’s a slightly less expensive alternative to Boca Raton. You also have a tremendous amount of density that is attracting new commercial development that is going to be a huge economic boon to the area,” Marcus & Millichap’s Doug Mandel said.

Demographic changes from 2000 to 2015

Population: 78,041, up 20% from 2000

Median age: 43

Median income: $63,639, a 33% increase from 2012 and a 46% increase from 2000

Average household net worth: $389,453

Price trends

Median sales price per square foot: $169, 12 percent higher than the rest of Broward County

Increase in average rent over the last year: 22% for a one-bedroom to $1,388; 25% for a two-bedroom to $1,875

Most expensive home on the market: 1653 Southeast Sixth Street, four bedroom and four bathroom house, asking $2.4 million.

Least expensive home on the market: 265 Southeast Tenth Street, unit 1C, two bedroom and two bathroom condo, asking $62,000

New development

On the residential side, Group P6 is developing the Elysian and the Fordham, which have seven units and nine units, respectively. Both buildings feature floor plans ranging from 1,200 to 1,750 square feet and amenities include porcelain and marble flooring, panoramic impact glass windows, designer fixtures for all bathrooms and kitchens with luxury Italian cabinetry.

Diaz said his company expects to complete both buildings sometime between December 2016 and February 2017. “We only have six units left,” Diaz said. “All our buyers are domestic, mostly from the northeastern U.S.”

As far as commercial development, the Bristol Group and Butters Construction and Development are planning a 925,000-square-foot business park on the site of the former Deerfield Country Club, which is located east of I-95 and north of West Hillsboro Boulevard. According to the developers, the park will entail a hotel, warehouse and offices, along with a recreation building and a public park during the project’s first phase.

The first two industrial buildings of the project, which is called Hillsboro Technology Center, is expected to be completed this year.

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