Own thy neighbor. So goes the new gospel of South Florida’s residential market.
More and more, the region’s residential buyers are looking to scoop up two or even three adjacent lots in a growing trend of compound assemblage. The affluent are saying, “more is more,” in bids for privacy, space and at-home amenities.
Nelson Gonzalez of Berkshire Hathaway HomeServices EWM summed up the dealmaking strategy eloquently:
“Name your price tag and get the hell out.”
The pandemic brought droves of buyers from the Northeast, Midwest and California, supercharging the region’s luxury market with unprecedented demand and soaring prices. Sales this year set new records, and Miami overtook New York as the least affordable housing market in the country.
While migration transformed who was buying, the lifestyle changes triggered by lockdowns and remote work adjusted what buyers wanted.
Coldwell Banker’s Danny Hertzberg (Jills Zeder Group, iStock)
“Before the pandemic, they didn’t want compounds, they wanted jewel boxes,” said Danny Hertzberg of the Jills Zeder Group with Coldwell Banker. “The pandemic shifted the mentality that your home is your castle.”
Now, buyers want guest houses, home offices, pools and sport courts, all rolled into one. The challenge is South Florida’s traditionally smaller lot sizes.
As Compass’s Ruthie Assouline pointed out, “Land is not replaceable.” So homeowners looking for more space need to find alternatives, and often right next door is their best bet.
Assouline and Hertzberg say that in the post-pandemic market, anywhere that people can buy more, they are.
Hertzberg would know — he arranged a trio of properties in Golden Beach that tech billionaire Phillip Ragon bought as an assemblage for $90 million in June. Hertzberg said he’s worked on five assemblage deals this year alone, and the Jills Zeder Group has done 10. The team brokered around 20 such sales last year, he said.
Dina Goldentayer of Douglas Elliman represented Matthew Bires in his purchase of two adjacent non-waterfront properties on La Gorce Island in June, for a combined $15.9 million. Goldentayer says she’s done five assemblage deals since the start of the pandemic, mostly on La Gorce Island, North Bay Road and the Sunset Islands.
Pablo Alfaro, a broker with Elliman, represented both the buyer and seller last year when Mickey Drexler, the former CEO of J. Crew and Gap, bought out his next-door neighbors for $16.5 million. Alfaro also had a hand in the $90 million Golden Beach deal, as the listing agent for one of the three properties.
Joy Triglia of Premier Estate Properties regularly sees assemblage deals in the Harbor Beach neighborhood of Fort Lauderdale. “You have a lot of homeowners who are doubling their property size, going to the neighbor and buying the property next door,” she said.
Gonzalez, too, said he even tried to buy out his neighbor.
Brokers overwhelmingly named North Bay Road, the Venetian Islands, the Sunset Islands and La Gorce as hotspots for assemblage. Last month alone, music executive Austin Rosen and Blockbuster heir Scott Huizenga bought out their neighbors in La Gorce.
The price to own your neighbor? For Rosen it was $12.5 million, while Huizenga paid $8 million.
Dina Goldentayer (Dina Goldentayer)
The founder of now-defunct Melvin Capital, Gabe Plotkin, a major short-seller of GameStop, paid $32 million for a North Bay Road mansion, and $12 million more for the adjacent lot in December of 2020. Gonzalez previously had the listing. The Assouline Team brokered the off-market sale to Plotkin.
“[Plotkin] tore the ugly house down recently, he’s putting in a tennis court,” Gonzalez said.
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Gonzalez acknowledged that compound assemblage isn’t new for South Florida. He sold Emilio and Gloria Estefan on the idea in the 1990’s. Last year, the couple took advantage of the area’s high demand when they sold their Star Island guest house for $35 million.
Still, most brokers insist this is a pandemic phenomenon, and one that spans price ranges. Hertzberg said the Jills Zeder Group has done assemblage deals for non-waterfront properties in the $2 million to $3 million range.
“Some people will be in between kind of a waterfront and non-waterfront buyer,” he said. Still, it ultimately comes down to one thing for every buyer: “they’d rather have a bigger lot.”
Brokers agree that these deals are anything but easy. In some instances, buyers will back out if they can’t secure the adjacent properties. Other times, the neighbor simply won’t budge.
“Most of the time when we call the neighbor there’s not even a price they would sell at,” Hertzberg said.
The deals sometimes also require separate negotiations with multiple sellers. They can take months, sometimes years. Hertzberg likens it to a high-stakes puzzle.