Boutique is the new black
Boutique condo projects designed to appeal to buyers seeking the privacy of a single-family home with the convenience of a condominium are rising up across South Florida.
Developers say they’re turning to smaller projects in order to attract baby boomers accustomed to single-family homes amid lagging interest from the region’s typical foreign condo buyers. Market experts say this trend is also motivated by the desire to limit investment risk late in the economic cycle.
“The last thing they want in this stage of the cycle is a big project where the outcome is uncertain,” said Peter Zalewski, a real estate consultant and the founder of Condo Vultures. “With a boutique, they can build it, sell it out, collect the cash and run for cover before the market shakes out. That’s the reality.”
For developers, the benefits of thinking small also include lower costs, faster construction and greater latitude for design creativity. On the flip side, a small project’s overhead costs — such as design, government approvals and utility work — are similar to those for a large development. Developers also say that it can be more challenging to recruit contractors and architects to small-scale projects.
Masoud Shojaee, CEO of Shoma Group, agrees with Zalewski about the reduced risk of smaller projects. “Rather than one building of 100 or 200 units, I’d rather do five or six projects with the same number of units in total,” he said. By building several smaller projects, he’s able to choose different locations and styles that range from modern to Mediterranean. “You’re capturing every taste,” he said.
Shojaee’s first boutique development, called Eleven on Lenox, is a luxury townhouse project with 11 three-story units at 1030 15th Street in Miami Beach. Construction is scheduled to begin in late 2016. Sized at an average of 3,600 square feet, the townhouses are priced from $3.2 to $4 million, which ends up at about $1,000 per square foot.
Several developers said they were building boutique condo projects to appeal to a certain demographic: empty nesters downsizing from suburban homes.
“It’s a product for baby boomers, mostly,” said Jean Francois Roy, the president of Ocean Land Investments.
After a 40-year career building high-rise retirement homes in Montreal and high-rise condominiums in South Florida, Roy has five boutique condo projects in Fort Lauderdale at various stages of development: AquaVita, AquaLuna, AquaMar, AquaBlu and AquaVue. Ranging in size from eight to 36 units, the projects are all on the waterfront.
Roy said that many of the potential buyers interested in these developments are relocating from large suburban houses, so they prefer the sense of security and privacy of a smaller condo complex. “If you come from a house, you’re less interested in a big building with huge elevators,” he said.
Boutique condo projects also have an air of exclusivity.
“At a high-rise, you could find yourself waiting for a gym machine, or at a pool with 25 people, or waiting 20 minutes for an elevator,” said Oscar Rodriguez, a principal of ROVR Development.
He said this would not be the case at the project he’s developing, the 26-unit Fairchild in Coconut Grove. Sales launch later this fall for the planned five-story waterfront building, with prices ranging from $1.5 to $4.5 million, which works out to about $1,100 a square foot.
Rodriguez said the Fairchild will be located in an upscale neighborhood, with just one way in and one way out. “I don’t think boutique buildings work just anywhere,” he said. “They must be accompanied by an exceptional site.”
Location was also a major consideration for Louver House, a four-story, 12-unit condo rising up at 311 Meridian Avenue in Miami Beach. Camilo Miguel, CEO of Mast Capital, said that the upscale South-of-Fifth neighborhood made the site ideal for a small-scale project. “You have to look at what is going to appeal to the buyers in that neighborhood. That impacts the design and layout of the property,” he said.
With an expected completion date in January 2017, the Louver House has units with prices from $2 to $3.6 million. More than half of the units have already been sold. David Polinsky of Fortis Development has lived in boutique condo buildings and appreciates the quality of life. “It’s for people who want the convenience of a condo but the privacy almost of a private home,” said Polinsky, one of two principals in the development of 250 Wynwood, an 11-unit condo at 250 Northwest 24th Street in the Wynwood section of Miami.
He said that small-scale projects allow for more design creativity. At 250 Wynwood, for instance, the developers incorporated art into the design by painting the underside of the balconies. “It’s something you can only do in a small building,” he said.
Oscar Roger, CEO of Roger Development Group, said he’s developing Laguna House at the Shops at Merrick Park in Coral Gables based on his own personal preferences. The 10-story project, with 13 units sized between 3,000 and 6,250 square feet, is slated to break ground in the first quarter of 2017.
Roger, who has previously built larger condo towers, said this project came about because he and his wife were looking to downsize. “We would love to live on top of Merrick Park and across the street from Neiman Marcus,” he said.