Developers flock to middle cities of Palm Beach County

Projects include Water Tower Commons in Lantana and Cortina in Boynton Beach

Jun.June 07, 2016 08:45 AM

With real estate prices soaring in the ritzy cities of northern and southern Palm Beach County — Jupiter, Palm Beach Gardens, Delray Beach and Boca Raton — developers are increasingly entering the less expensive middle cities, such as Lake Worth, Boynton Beach and Lantana.

“There are great opportunities in these second tier suburbs, thanks to low land prices and construction costs,” Rick Gonzalez, president of West Palm Beach-based REG Architects, which is looking at projects in Green Acres and Boynton Beach, told The Real Deal. “It will be nice if we get mixed-use, walkable developments like Miramar and Pembroke Pines.”

Notable projects include:

  • Water Tower Commons in Lantana, which is being developed by Boca Raton-based Kenco Communities on a 70-acre tract where a tuberculosis hospital once stood. The project, which would be the biggest ever in the town, consists of almost 1,100 residential units, 280,768 square feet of retail and restaurant space and a 32,800 square-foot fitness center.
  • Cortina, a $215 million residential project in Boynton Beach, developed by JKM Developers of Boca, that will mark the completion of Boynton Village and Town Center. The development will include more than 1,100 residential units, a dog park, a public park and a sober home.
  • A $70 million renovation of Lake Worth’s historic Gulfstream Hotel by Delray Beach-based developer Hudson Holdings. It plans to restore the crumbling, six-story hotel, built in 1925, shrinking its room count to 87 from 106. And the developer intends to wipe away two nearby buildings so it can erect a five-story, 87-room annex to the hotel instead. Both buildings will carry Hilton’s upscale Curio Collection brand.

“We started working three years ago in Boynton Beach and Lake Worth, and there’s a lot of value, especially in Lake Worth,” Steve Michael, co-founder of Delray Beach-based Hudson Holdings, told TRD. The city will benefit further if talk of the Atlanta Braves building a new spring training stadium in Lake Worth’s John Prince Park turns into reality, he pointed out.

“Developers are looking for value, so I think there will be a resurgence of development in Lake Worth,” Michael said. “It’s next to the ocean with a vibrant downtown. That’s how Delray Beach started 15 years ago.”

Others agree with Gonzalez and Michael about the middle cities’ ripeness for development. “The eastern communities of Palm Beach County are ready for gentrification,” Neil Merin, chairman of West Palm Beach-based NAI Merin Hunter Codman, a commercial real estate services firm, told TRD. “These were little fishing villages for a long time, and new developments will bring new interest.”

But these middle cities won’t suddenly come to dominate the county, he said. “I don’t see this redevelopment having a gigantic impact, because the numbers aren’t that great,” Merin said. “We’re talking hundreds and thousands of units, not tens of thousands. It’s niche projects.”

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