Luxury Real Estate
While most of the state's real estate markets sings the blues, sales of trophy properties are humming along.
To find potential buyers for their luxury oceanfront condominiums starting at $6.2 million, the developers of Regalia on Sunny Isles Beach headed for Utah. In January, they sponsored a premier party at the Sundance Film Festival for the movie "King of California" starring Michael Douglas and Evan Rachel Wood that drew 300 guests and generated celebrity media buzz.
"We support creativity in every form -- from architecture to filmmaking and beyond," says Avra Jain, principal of Regalia Holdings, referring to the 42-story Regalia's curving design.
With Florida's residential real estate market stuck in slow gear for the past year, developers, brokers and agents are pulling out all the stops to catch the attention of luxury buyers.
And while developers have slowed their introductions of new homes and condos and resale inventories have grown dramatically since late 2005, the state's high-end market appears to be holding its own.
"While sales are off in other categories, the ultrahigh end is strong," says Budge Huskey, president and chief operating officer of Coldwell Banker Residential Real Estate in Sarasota. "These buyers are seeking trophy properties with something unique -- a pristine beachfront, historical element or 'star' element owned by someone famous. If there's a glamour or another unique appeal, price is no object."
Starting Price: $6.2 million
Regalia has 40 single-floor residences that include more than 2,000 square feet of terrace space. The 42-story oceanfront condominium north of Miami Beach was designed by Arquitectonica and developed by Regalia Holdings (developers Jerry Kaufman, Avra Jain, Paul Cashman Murphy and Susanne Bak Mortensen). Amenities include an infinity-edge swimming pool, gardens and fountains, an oceanfront gazebo with poolside shower and spa, private beachfront cabanas and a fitness center overlooking the Atlantic. Regalia is expected to be completed in 2009.
Research shows that the affluent members of the first wave of Baby Boomers -- as well as European and Latin American buyers -- are still buying million-plus second and third homes. And because 2006 was a profitable year for Wall Street, New York area brokers, bankers and financial managers are buying trophy properties in Florida.
Largely because of the status and location factors, Florida's superluxury market is concentrated primarily in Palm Beach, Boca Raton, Naples, Sarasota, Coral Gables and Miami Beach. Most of the superluxury single-family home sales are occurring in built-out golf course communities and prestigious non-golf communities, as well as on the handful of undeveloped lots remaining on the ocean, Gulf and Intracoastal Waterway. Older single-family homes are being substantially expanded or torn down and replaced with much larger homes. Because well-established communities offer a unique set of advantages -- from prestige and status to close-in locations -- the competition for these properties is great for primary as well as vacation homes.
As land prices escalate, vertical condominiums are the only option for developers of properties along the ocean, bay or Gulf. Those rising land costs are also fueling the spread of luxury development to new parts of the state, from the Panhandle to Flagler County and Fort Myers.
In Jacksonville, a new wave of urban high-rise development is sprouting up along the St. Johns River. "Our high-end market is probably 90% primary residents," says Missy DeKay, a top producer for Watson Realty's Ponte Vedra office near Jacksonville. "With the new condominiums, though, we are seeing more second-home buyers as well."
Moving down a notch from the $10-million penthouses and $20-million Palm Beach or Naples mansions, the $1-million to $2-million segment of the luxury market also appears to be fairly healthy.