Developer constructing Fisher Island condo on speculation
A developer whose experience dates back to revitalizing the South of Fifth neighborhood of South Beach in the early 1990s is once again focusing his efforts on jumpstarting another dormant South Florida condo market poised for a resurgence.
Developer Heinrich Von Hanau, who was the CEO of the Portofino Group when former German bond trader Thomas Kramer first assembled acres of land at the southern tip of Miami Beach more than two decades ago, is spearheading the development of at least a pair of new 10-story condo towers totaling 47 units apiece on the north side of the ultra-wealthy but somewhat dated enclave of Fisher Island.
Both planned towers – Palazzo Del Sol and Palazzo Della Luna – are slated to be developed side-by-side with a focus on providing state-of-the-art condo units with practically every modern comfort possible, including “six-star” concierge service for residents.
Contrast this planned condo product with the fact that a supermajority of the nearly 725 existing units on Fisher Island were built at least a decade ago, according to FisherIslandClub.com.
In fact, the most recent condo project to be developed on the island is the 10-story, 29-unit Palazzo Del Mare project that was built in 2007 on a site east of the planned Palazzo Del Sol and Palazzo Della Luna towers.
Von Hanau is so confident that domestic and international buyers alike will want to purchase new ultra-luxury condos – with prices averaging around $1,950 per square foot for non-penthouse units – on the 216-acre private island across from South Beach that an entity controlled by his Fisher Island Holdings LLC group began construction on the Palazzo Del Sol tower earlier this spring even before any significant number of presale contracts were secured, according to marketing literature.
Efforts to build the two towers were originally initiated during the previous South Florida real estate boom but an “international battle among mysterious offshore companies and would-be heirs” following the death of Eastern Europe billionaire Arkady “Badri” Patarkatsishvili from the Republic Of Georgia ultimately stalled the development for more than six years, according to the Miami Herald.
In May, an entity controlled by Von Hanau’s group took title to the development sites and immediately initiated construction of the first condo tower, according to Miami-Dade County records.
Some six months later, Palazzo Del Sol is at a crucial moment in the project’s overall progress.
Before Palazzo Del Sol is scheduled to “top off” in December, a new multi-million dollar presale office is scheduled to officially open right before Thanksgiving on the project’s site located just east of the terminal where vehicles are ferried to and from the MacArthur Causeway.
The new presale office will feature a model of Palazzo Del Sol, full-sized replicas of the project’s kitchens and bathrooms and an entertainment room with a “magic table” that incorporates the latest audio and video technology on surrounding walls to showcase the planned project.
Prices at Palazzo Del Sol for three- to seven-bedroom units range from $5.5 million to more than $24.1 million. Construction is scheduled to be completed during the first quarter of 2016, according to marketing literature.
Construction of the second condo tower – Palazzo Della Luna – is tentatively scheduled to begin in the first half of 2015 regardless of presales secured in the first tower. This second tower is expected to take up to two years to complete.
Prices and floor plans for Palazzo Della Luna are not yet available.
Once these towers are completed, Fisher Island Holdings LLC would still have the ability to construct an additional 84 units on a pair of other vacant sites it also owns on the island, according to marketing literature.
Fisher Island was created in 1906 when the U.S. government dredged – or cut – the island away from the barrier island of Miami Beach in order to build “deep water docks” connecting Miami with the Atlantic Ocean, according to FisherIslandClub.com.
Today, Fisher Island is a residential community with more than 650 families from 42 countries that enjoy a variety of services and amenities including a day school, nine-hole golf course, 18-court tennis center, two deep-water marinas with more than 100 slips, observatory, aviary, private beach, seven restaurants and a 24,000-square-foot spa and fitness center.
In 2013, Fisher Island completed a $60 million “restoration initiative” to improve the amenities, boutique hotel and common grounds. The multi-year effort that began in 2007 focused on restoring Fisher Island “up to the demanding standards of today’s discriminating resident, member and guest,” according to FisherIslandClub.com.
Currently, nearly 30 condo units are on the resale market at an average asking price of nearly $1,525 per square foot as of Tuesday, according the Southeast Florida MLXchange.
All but two of the condo units currently offered for resale in Fisher Island were created between 1986 and 2004. The average asking price for these units is about $1,467 per square foot.
For the two units built after 2004 in the Palazzo Del Mare condo tower, the average asking price is nearly $2,200 per square foot.
In the first nine months of 2014, buyers purchased 16 condo units in Fisher Island for an average of nearly $1,015 per square foot.
Of the condo resales to transact on Fisher Island between January and September, 15 of the units that were built before 2004 sold for an average price of less than $960 per square foot. The only unit built after 2004 to sell this year was in the Palazzo Del Mare, and it traded for nearly $1,900 per square foot.
The unanswered question going forward is whether enough buyers will share the same desire to purchase new condo units in Fisher Island when so many other condo towers have already been proposed in other luxury areas of South Florida.
Peter Zalewski is real estate columnist for The Real Deal who founded Condo Vultures LLC, a consultancy and publishing company, as well as Condo Vultures Realty LLC and CVR Realty brokerages and the Condo Ratings Agency, an analytics firm. The Condo Ratings Agency operates CraneSpotters.com, a preconstruction condo projects website, in conjunction with the Miami Association of Realtors.