Loving Las Olas

A surge of apartment development in downtown Fort Lauderdale is starting to spread south of Las Olas Boulevard, the southern border of the city’s central business district along the Tarpon River.

“The big developments are coming to the south side of the river,” said Bradley Arendt, a Fort Lauderdale-based director of the Urban Core division of brokerage Colliers International. “A lot of the property up north of the river is spoken for or is extremely expensive. Developers who want a deal that makes sense are looking in other areas [of Fort Lauderdale], and this is the next logical one.”

Property is getting pricey in the area some brokers call “SOLO,” short for South of Las Olas. So far this year, sale prices for SOLO land have averaged $4.9 million per acre, more than double the average of $2.4 million per acre in 2016, according to market research by Colliers International and CoStar. Their research covered an area directly south of downtown, bordered on the north by Las Olas Boulevard and the south by State Road 84.

Demand for land is especially strong in areas south of the river that have the same zoning as downtown Fort Lauderdale, where “we’re running out of land,” Arendt said. “The sprawl will move south. You have the same zoning all the way [south] to 9th Street.”

But much of the south-side development potential remains on paper while construction surges along the north bank of the Tarpon River. The city government has approved 3,423 residential units — up from 2,227 two years ago — south of the river in an up-zoned district known as the Downtown Regional Activity Center, which includes the central business district and adjacent areas.

Despite a growing volume of approved apartment projects in the so-called SOLO area, there are only two big developments under construction. Miami-based Related Group just broke ground for a 230-unit rental project, and Palm Beach Gardens-based Ram Realty is building 501 Seventeen, a mixed-use development including 248 apartments, a parking garage and a Whole Foods supermarket.

The south side of the river is “the next great neighborhood in Fort Lauderdale,” said locally based developer Dev Motwani. “If you look at the south side, it doesn’t look much different from what the north side looked like not very long ago.”

Motwani has an approved site plan for a 34-story, 251-unit apartment tower that he promotes for its proximity to trendy East Las Olas Boulevard across a nearby bridge.

Motwani said zoning rules allowed him to add another 15 floors to his rental building 629 Residences. “There’s already so many projects in the pipeline that are in the 350- to 450-unit range,” he said, “and I felt there was more of a market for a boutique, high-end building just off Las Olas.” He plans to break ground in the summer of 2020.

A crowded field

Many of the approved and proposed developments south of downtown Fort Lauderdale are clustered near two roads that cross the Tarpon River to the downtown area: Third Avenue and South Andrews Avenue.

Just off South Andrews Avenue, Related Group broke ground in August on its unnamed 20-story, 230-unit apartment building — the second phase of a rental development that began with the existing New River Yacht Club, a 24-story, 249-unit apartment building on the south bank of the river.

The Related project could face tough competition from new downtown apartments just north of the river. Developers have 2,470 apartments under construction at downtown sites south of Las Olas Boulevard to the Tarpon, up from just 272 units two years ago, according to the city government.

“Everybody’s worried about the amount of [residential] units that are going to hit at one time … There may be a year, or 14 or 16 months, when it’s a little competitive,” said Patrick Campbell, a vice president of Related Group.

Related has worked both sides of the Tarpon for years. In 2017, the developer completed its 44-story Icon Las Olas, where monthly rents go as high as $8,000. Originally planned as a condominium, the property opened as an apartment building on a downtown site between East Las Olas Boulevard and the river. Now Related is preparing to break ground by the second quarter of 2020 for another 44-story apartment building on a nearby site. “It’ll be a 2.0 version of Icon Las Olas,” said Related executive Jessica Suarez. “It will have high-end finishes like Icon, but a different name.”

Related has owned part of the south-side riverfront site for its phased New River Yacht Club project “since the early 2000s … It was the right place to be, because there was nowhere else for downtown Fort Lauderdale to go but south of the river,” Campbell said. But “we don’t have any other holdings south of the river. People are getting a little aggressive on their ask.”

Few developers have paid more for SOLO property than two New York City-based firms that in January bought a single acre off South Andrews Avenue for $12 million. Bizzi & Partners and Silverback Development have a city-approved site plan to build a 35-story, 401-unit rental apartment building called New River Central on the property, located next to an existing Publix supermarket.

The seller of that site — New River Central LLC, managed by Kevin J. Reilly — had acquired it in 2016 for $7.15 million. Reilly has been developing another 3.3 acres directly across the street from the property he sold. He won city approval to build 790 apartments on the site as part of a three-tower development with a 297-key hotel, about 44,000 square feet of retail space and nearly 300,000 square feet of office space. City commissioners approved the development, called Riverparc Square, in September 2018. When construction of Riverparc Square might start is unclear. Reilly could not be reached for comment

At least one unbuilt development in the area south of downtown has been approved and pending for years. Developer Asi Cymbal paid $11.2 million for a six-acre development site in 2012 and got city approval in 2013 to build as many as 856 apartments in a high-rise called Marina Lofts. “It’s going to be a mix of rental units, condo units, a hotel, a marina component and retail … It’s a real mixed-use development that’s going to go through many cycles,” said Cymbal, who now expects to start construction in 2021. “We’re long-term holders of the site.”

Development south of downtown may remain slow, but lofty land prices indicate it is unlikely to abate, said Michael Weymouth, president of Las Olas Company, a leading retail landlord on East Las Olas Boulevard. “People have been gobbling up vacant land down there for, maybe, the next cycle,” he said. “But I don’t see any pullback in value, just a delay in development.”