The Peninsula on the Intracoastal in Boynton Beach was one of the last bulk sales on the water.
In September, Boca Raton-based Altman Development paid $8.3 million for a failed condo-townhome project in Boynton Beach called Peninsula on the Intracoastal. As condo towers go, Peninsula isn’t remarkable. It’s a five-story mid-rise with 50 units and another 20 town-home sites, hardly the soaring failure so prevalent in the bust. But Peninsula does represent a change in the post-crash market. It’s one of the last bulk sales on the water.
Brokers and analysts report that waterfront condo tower bulk sales largely have ended as the inventory of foreclosed and short-sale properties runs out. “It’s over,” says Peter Zalewski, founder of market research firm Condo Vultures in Bal Harbour. “It’s all been depleted.”
The bulk-buy action is moving west — notably to one-time garden-style suburban apartment complexes bought in the boom for conversion to condos — and to other Florida markets.
Prices have stabilized at 60% to 65% off peak, says Hampton Beebe, senior vice president in the Boca Raton office of ARA, an Atlanta-based brokerage, which facilitated the Peninsula sale. Beebe says more investors, generally partnerships rather than institutions, are comfortable with buying the assets. Some choose to market units individually while others lease them out. The key factors are the condition of homeowner association finances, the prices of units that have already sold and the usual real estate considerations of floor plans and location.
The end of the bulk-sale phase of the cycle is good news for the recovery. Cash-strapped developers and lenders now have been replaced by buyers able to pay for marketing and property upkeep, removing uncertainty and the risk of blight. “Overall, it’s very healthy for the market to see these things change hands into operators with new strategies and fresh capital,” Beebe says.
Altman plans to rent out the Peninsula units until the market improves sufficiently to sell them as condos, says Altman Vice President Manny Martinez. “The rental market has improved dramatically,” he says.