New Construction North Lake West Plam Beach Fl

A newly built house with waterfront views just sold for $16.2 million, and it's not in a luxury Palm Beach compound bounded by hedges and walled courtyards.

Instead, this ultra-modern house, with its rooftop deck, six bedrooms and elevator, is in a 1950s community at the east end of a long road called Forest Hill Boulevard, in West Palm Beach.

Not Palm Beach. West Palm Beach.

The 6717 S. Flagler Drive house along the Intracoastal Waterway is the most expensive single-family home ever sold in West Palm Beach, said Douglas Elliman Real Estate agent Burt Minkoff, who represented the seller in the July 8 transaction. The recorded price for the house was $15.075 million, but that does not take into account closing costs paid by the buyer.

In years past, an eight-digit home price wasn't something found in the city's eastern edge, across the bridges from the playground of some of the nation's wealthiest families.

But a number of factors have come together to raise the mainland city's image as a business and residential destination on a par with the famed island town to its east, fading the lines that long divided the communities.

"West Palm Beach is as desirable, or more desirable, than Palm Beach," said Minkoff, who represented developer Aquantis Group in the sale. Chris Leavitt of Douglas Elliman represented the buyer, whose name was not immediately disclosed.

Business and real estate leaders agree: The communities of West Palm Beach and Palm Beach are merging. "And they're going to continue to merge," Minkoff said.

West Palm Beach's downtown once was mostly old-timey shops, bars and eateries punctuated by a few office buildings.

Meanwhile, Palm Beach kept to itself, reveling in its pricey Worth Avenue shops, exclusive eateries and closed social circles.

But many out-of-state people who have bought on Palm Beach are venturing out to West Palm Beach to play and work, said Laurel Baker, chief executive of the Palm Beach Chamber of Commerce. In addition, old office buildings on Palm Beach island can't be retrofit to today's standards, she said, "and so it's easier to go across the bridge to a new building."

With the luxury crowd from Palm Beach spilling over the bridges into West Palm Beach, "it feels like an extension of Palm Beach," said Sara McCann, a Palm Beach resident, interior designer and owner of a growing home furnishings empire in West Palm Beach.

West Palm Beach's newfound prominence as a destination for residents and businesses has been a long and slow process for some of the city's most steadfast investors.

"Finally," said Jonathan Gladstone, a longtime investor and real estate broker. "We've been watching West Palm Beach (act) like a turtle for the last 30 years."

What's behind the boom?

Migration to Florida from other states is nothing new, but the coronavirus pandemic accelerated the trend, prompting people to flee dense and cold urban cities for wide-open, warm Florida.

During the pandemic, the very rich retreated to Palm Beach, prompting a mad rush for mansions and pushing up home prices to previously unheard-of amounts.

During this past winter season, between Oct. 1 and May 1, 38 sales closed at prices recorded at $17 million or higher. In the same period ending last year, just 12 deals landed in that price category.

Summertime hasn't slowed sales. In June, an oceanfront house on Palm Beach sold for $35.43 million, more than its $35 million asking price and more than double the prior $17 million sales price 10 years ago.

In the 17 months since the pandemic began, Palm Beach County has distinguished itself as a more popular destinationfor relocating Yankees than Miami-Dade and Broward counties.

From the Empire State alone, 14,000 New York state licenses plates have registered for Florida plates. Of those, 42% were in Palm Beach County, more than Miami-Dade or Broward counties, according to data compiled by the Business Development Board of Palm Beach County (BDB).

Realtor Burt Minkoff stands in the 6717 S. Flagler home in West Palm Beach, which was built by Aquantis Group and has sold for $16.2 million.

End of the stigma?

Some 15 years ago, West Palm Beach was a minor investment for some New Yorkers scooping up homes in historic neighborhoods. "By 2005 or 2006, all my friends in the Hamptons had a house in Flamingo Park for $220,000. 'If it has a kitchen, I'll take it,'" Minkoff said.

But the lines between West Palm Beach and Palm Beach first began to fade when The Bristol condominium in West Palm Beach began selling pre-construction units averaging $8 million each.

The 68-unit condominium at 1100 S. Flagler Drive in West Palm Beach is the most expensive condominium ever built in Palm Beach County. When it began marketing in 2015, it positioned itself not as a West Palm Beach property but as a Palm Beach-area condominium. It even opened its sales office on Palm Beach even though the building sits across the Royal Park Bridge from the island.

Up until then, no one expected anyone would pay millions of dollars to live near, but not on, Palm Beach island.

Nonetheless, the ultra-luxury condo's developers forged ahead with sales, and wound up luring about half of its buyers from Palm Beach. Among them was Palm Beach philanthropist Sydell Miller, who in 2018 paid $43 million for an entire penthouse floor.

Sydell's purchase gave instant legitimacy to living in West Palm Beach, real estate agents said.

"It's all timing. When Sydell bought one floor for $43 million, that was a clear sign," said Steve Simpson, a longtime West Palm Beach resident of the El Cid historic neighborhood and a real estate agent with William Raveis Real Estate on Palm Beach.

The Bristol condominiums in West Palm Beach Thursday December 19, 2019 Richard Graulich/Palm Beach Post

That sale was followed by the May 2019 sale of a newly built "spec" house, also built by Aquantis, in the Prospect Park neighborhood. The $11.5 million sale of the coastal contemporary home at 2914 Washington Road was, at the time, the most expensive single-family home ever sold in West Palm Beach.

The 2019 Washington Road sale underscored that West Palm Beach could land multimillion-dollar single-family home sales, said Minkoff, who represented Aquantis in the deal.

Meanwhile, The Bristol condominium sales paved the way for the construction of other new, ultra-luxury condos such as La Clara and Forte along Flagler Drive in West Palm Beach.

One Palm Beach real estate developer has taken note of West Palm Beach's island-like sales prices and plans to build a Flagler Drive condominium complex that looks like it could be plucked from a Worth Avenue via.

The Frisbie Group, together with Hines, plans Flagler Towers on the site of Palm Beach Atlantic University's old dormitories at 1315 and 1401 S. Flagler Drive.

Plans are to build two, 27-story towers featuring 109 units, consisting of 100 condominiums and nine ground floor townhouses. Prices per unit will be a whopping $2,000 per square foot.

Billionaires push millionaires off Palm Beach

West Palm Beach's waterfront became a popular spot during the pandemic after the nation's billionaires bought the mansions owned by Palm Beach's millionaires, who then looked across the Intracoastal Waterway for another home.

"The next question was, 'Where am I going to go?' " McCann said. "And they realized they could pocket a little bit and buy a nice house in West Palm Beach."

In May, Peter Cummings and Julie Fisher Cummings sold their Palm Beach mansion for $23.79 million. That same month, they paid $12.49 million for a house at 5407 S. Flagler Drive in West Palm Beach.

Interior decorator Caroline Rafferty and her husband, investments adviser Nicholas K. Rafferty, in June sold their renovated Palm Beach house for $11.35 million. The couple then paid more than $6.7 million for a house just north of Forest Hill Boulevard in West Palm Beach.

Popular neighborhoods include the historic residential communities south of the downtown and east of Dixie Highway, on or near the waterfront. These include El Cid, Prospect Park and Southland Park.

In one slice of West Palm Beach, from the El Cid neighborhood south to the border with Lake Worth, the median home sales price was $1 million year-to-date, compared to $699,500 during the period between May and December in 2020, Minkoff said.

The area south of Southern Boulevard, known as SoSo, also is very active with sales.

In SoSo, the homes are not historic, Simpson said. Therefore they can be modified or torn down to make way for modern homes.

The $16.2 million home at 6717 S. Flagler Drive in SoSo is an example.

The house, at the corner of Flagler Drive and Forest Hill Boulevard, has sweeping Intracoastal Waterway views. It is fully solar-powered and has a pool, two outdoor kitchens, two spas, four bars, a green living wall, a guest house and floor-to-ceiling glass. Inside, there's a wine room, indoor gym and screening room.

Today, any home east of Dixie Highway that is move-in ready sells fast, said Sabra Kirkpatrick, an associate with the The Kirkpatrick Team at Brown Harris Stevens in West Palm Beach.

In 1986, West Palm Beach attorney Louis Mrachek and his wife, Elizabeth, paid $175,000 for vacant land at 5511 S. Flagler Drive in SoSo. They built a two-story house on the site and raised their family there. Mrachek said he and his wife had planned to sell now to be closer to their grandchildren, "but we're obviously fortunate" to be selling during a record real estate market.

Two months ago, they listed the home for $3.95 million with Kirkpatrick. Within a day, they had a contract on the house. And on June 30, they sold their family home for $3.875 million, according to realtor.com.

Meanwhile, a SoSo house at 130 Bloomfield Drive sold in May for its asking price of $4.45 million, 24 hours after going on the market. "And there were backup offers," Kirkpatrick said.

With so many people are seeking a limited supply of homes, other neighborhoods in West Palm Beach are getting spillover buyers.

Among the neighborhoods pursued by buyers seeking less-pricey homes are Flamingo Park and Northwood in West Palm Beach, and the town of Lake Clarke Shores, just south of West Palm Beach.

Home prices aren't cheap in these other communities, either. In Flamingo Park, a home at 800 Claremore Drive just sold for $975,000. The prior sale was $670,000 only three years ago.

Businesses setting up shop

Since the pandemic, executives who moved here have decided to expand or relocate their companies. This prompted The Related Cos., a New York-based development company with deep stakes in West Palm Beach, to place an even greater bet on the city's future.

Related entered West Palm Beach when it built the mixed-use CityPlace, now known as Rosemary Square, in 2000. Since then, the company has built an office tower and a convention center hotel in the city.

Today, Related just finished building 360 Rosemary, a 20-story office building next to Rosemary Square. 360 Rosemary is fully leased, mostly with firms such as Point72, Elliott Management and Goldman Sachs.

During the last six months, about 95% of the companies moving or expanding to West Palm Beach are financial services firms, including private equity firms and hedge funds, said Jon Blunk, president of Tower Commercial Real Estate, which handles leasing for 360 Rosemary.

More towers could be coming from Related. Plans also are afoot to build three more at Rosemary Square, at least one of which will be for offices. In addition, Related plans to build an ultra-luxury office tower along Flagler Drive at the bridge to Palm Beach.

Ready for more?

On June 10, the Business Development Board, Palm Beach County's recruitment arm, held a panel discussion about the county's growth. The event's title, "Ready or Not, Here They Come," sounded like both a promise and a warning.

More than 100 guests attended the West Palm Beach event, including two county commissioners and the mayors of West Palm Beach, Boynton Beach and Palm Beach Gardens.

The panel's three real estate members, and the attorney who moderated the talk, all work in one way or another for Related. They told business and government leaders that Related continues to field inquiries for office space from companies across the country, meaning that the county, and in particular West Palm Beach, will continue to grow.

Companies coming to Palm Beach County want to be near the island of Palm Beach, panelists said, and West Palm Beach is the closest major city to the island. But because West Palm Beach can't handle all the pending demand for homes and offices, cities to the north and south should be prepared for more development and density.

Gopal Rajegowda, senior vice president with The Related Cos., said financial services companies like to cluster together, meaning the more companies come here, the more others will follow them.

Observers agreed.

With so many chief executives already owning homes on Palm Beach, the decision by some of them to open offices in West Palm Beach is a natural consequence, said Michael McCloskey, a real estate developer, investor and Palm Beach resident.

Once a couple of executives decide to establish major offices, others follow. "There's a bit of a herd mentality, what the kids call FOMO, or fear of missing out, and it's totally true," McCloskey said.

We're not 'Palm Beach West', official says

Not everyone agrees with the notion that the money pouring into West Palm Beach is because the mainland city is becoming an extension of Palm Beach.

Raphael Clemente, executive director of the West Palm Beach Downtown Development Authority, said the city is attractive because it is maturing in its own right and becoming known as a hip place filled with amenities for both residents and employers.

For Clemente, the city's turning point came in 2018, when the Sterling Organization, a longtime Palm Beach private equity firm, decided to move to West Palm Beach. The firm turned an old downtown bank building at 302 Datura St. into a modern, edgy office center.

"West Palm Beach is a much more attractive environment than the island of Palm Beach" for new hires, Brian Kosoy, Sterling's managing principal said in 2018. "It's a lot more youthful. And we want to be in an urban environment so we can attract highly educated, smart folks."

Clemente said while the "symbiotic" relationship with Palm Beach always has existed, he believes that homebuyer interest in parts of West Palm Beach are because of the "great neighborhoods ... We've been discovered."

Palm Beach Daily News staff writer Darrell Hofheinz contributed to this report.

Palm Beach Post

Alexandra Clough

https://www.palmbeachpost.com/story/business/2021/07/12/some-lines-between-west-palm-beach-palm-beach-blurring/7684047002/

Source: https://www.bdb.org/news/2021/07/12/financial-services-news/palm-beach-west-how-west-palm-is-becoming-an-extension-of-the-island/

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