Hollywood/Hallandale Beach condo market positioned for growth
Question: What is happening in the Hollywood/Hallandale Beach coastal condo market?
The Hollywood/Hallandale Beach market in Southeast Broward County effectively stands at the crossroads of South Florida’s coastal condo market.
Foreign investors and domestic residents, alike, have been attracted in recent cycles to the Hollywood/Hallandale Beach market for its relatively affordable prices by South Florida standards and the somewhat central location between Miami and Fort Lauderdale.
As a result, the Hollywood/Hallandale Beach market was the first of the seven largest coastal markets in the tri-county area to sell out of all developer condo units during the last real estate cycle between 2003 and 2010.
During this latest South Florida cycle that began in 2011, the Hollywood/Hallandale Beach market is the second most active area, based on the number of new condo units announced.
Developers have proposed nearly two dozen new condo towers with more than 4,800 units — about 12 percent of the South Florida preconstruction total — for an area that stretches from the Miami-Dade County line north to Dania Beach Boulevard, and the Atlantic Ocean west to Federal Highway, according to the preconstruction condo projects website CraneSpotters.com. (For disclosure, my firm operates the website.)
Unlike the rich premiums being sought in Fort Lauderdale and Miami Beach, the starting presale prices for new condo towers marketing preconstruction units in the Hollywood/Hallandale Beach area range from about $380 per square foot to less than $785 per square foot, per project, according to the CraneSpotters.com Developers Price Survey for January.
On the condo resale front, buyers purchased more than 1,525 units at an average price of about $215 per square foot in 2014, according to the Southeast Florida MLXchange.
By comparison, the 2014 average condo resale price per square foot was $315 in the downtown Fort Lauderdale and Fort Lauderdale Beach market, about $434 in Sunny Isles Beach, about $525 in Miami Beach and nearly $405 per square foot in Greater Downtown Miami.
The unanswered question going forward is why price-sensitive investors are not purchasing more units in the Hollywood/Hallandale Beach market, given the current value being offered compared to other competing coastal markets located to the north and south in coastal South Florida.
Thought of the week: 1,000-foot-tall ‘Money Clip’ to be built in Greater Downtown Miami
CNBC TV real estate correspondent Diana Olick was in Greater Downtown Miami this week reporting on a number of different South Florida real estate stories, including the planned $430 million SkyRise Miami entertainment tower to be built on a waterfront parking lot at the Bayside Marketplace. (For disclosure, I was interviewed for one of the stories.)
Plans call for the 1,000-foot-tall SkyRise Miami to feature a restaurant, night club, retail space, viewing areas and a variety of activities, including a “plunging amusement ride” that drops down the side of the structure at a speed of 95 miles-per-hour.
More than three million “paying visitors” are expected to frequent the planned SkyRise Miami tower annually, potentially generating millions of dollars in future revenue, according to CNBC.
Developer Jeff Berkowitz plans to build the landmark tower using funds from a variety of sources including foreign nationals who hope to obtain U.S. citizenship by investing a minimum of $500,000 in the Skyrise Miami project, which is part of a federal jobs program called EB-5.
As part of Olick’s reporting, the Emmy-award winning journalist said, “I asked him [Berkowitz] about the shape of the tower — which to me looks kind of like a bobby pin — he said [that] to him, ‘It looks like a money clip.’”
Peter Zalewski is a 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.