Dan Kodsi’s Royal Palm Companies is reworking plans for a residential tower in Miami’s Arts & Entertainment District.
When Kodsi and his former partner, Rafael Pecchio, acquired the site at 1317 to 1353 North Miami Avenue two years ago, they planned to build a 200-unit apartment building. Now, Royal Palm is moving forward with a roughly 30-story condo tower, joining other developers that have also switched gears from building apartments to condos.
Condo projects are easier to finance because developers can tap into buyers’ deposits to partially fund construction.
Royal Palm secured an $8.4 million pre-development bridge loan from Forman Capital for the half-acre A&E District site, according to a press release. The property is zoned for up to 245 residential units, but Kodsi’s firm is working with the city of Miami to upzone the site for 360 units, the release states.
Forman Capital partner Ben Jacobson said in a statement that the site’s location, Kodsi’s track record and “pent-up demand for additional high-end condo-hotel inventory” was attractive to Forman.
The project, with some micro units, will have a short-term rental component, but Kodsi said it will be “different from the traditional condo-hotel concept that’s been out there.” Dozens of condo-hotels are in the works in South Florida, with most concentrated in Miami’s urban core. Kodsi said he does not want to compete with the pipeline of short-term rental-friendly and condo-hotel projects, and that buyers at his development will likely use the units as a second home.
Royal Palm’s project will revolve around cars and collecting cars, Kodsi said, declining to disclose more details. He expects to secure the additional density by the end of this year and launch condo sales next year.
Kodsi and Pecchio paid $8.9 million for the assemblage in 2022. Pecchio is no longer involved, Kodsi said. ABC Group, operator of the restaurant supply store on the site, sold the property. It’s north of downtown Miami, near the I-395 signature bridge project that’s under construction.
Nearby, developer Russell Galbut’s GFO Investments recently kicked off sales of 14 Roc, a short-term rental-friendly condo tower planned for 125 Northeast 14th Street. Galbut tapped Cervera Real Estate to lead sales and marketing for the project, with prices starting at $495,000.
Developers continue to launch condo-hotel and condo projects with short-term rental flexibility due to strong demand from buyers who are attracted to the prices and ability to earn income. But condo-hotel critics say that some projects don’t appreciate in value, and buyers end up generating less income than they expected.
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