Florida's aging waterfront condos become gold mines as owners cash in on developer buyouts
Along South Florida's sunny shorelines, aging waterfront buildings are turning into redevelopment jackpots as condominium owners increasingly choose control — and cash — over uncertainty.
"The residents, the owners, understand how hard it is to keep up the maintenance of the buildings, and they understand that it's getting harder and harder every year with the increase of everything," North Bay Village's Harbor Condominium Homeowners Association treasurer Juan Llorente told Fox News Digital.
"It's a great opportunity to live on your own terms, basically. That's what we’re trying to do here — we’re trying to anticipate the inevitable by putting ourselves on the market."
Earlier this month, after interviewing nearly a dozen real estate firms, the 29-unit bayside condominium announced the exclusive bulk-sale listing of the building with Blanca Commercial Real Estate and MSP Group. The buyout gives a potential buyer or developer the opportunity to reimagine one of Miami’s most sought-after waterfront neighborhoods, which has seen more than $2 billion in new development in recent years.
"The Harbor Condominium is unique in its positioning. Of course, it starts with a waterfront location in an enclave that's really experiencing a renaissance of redevelopment," MSP Group CEO Deme Mekras also told Fox News Digital. "They don't make any more waterfront property, and the Harbor Condominium is sitting on just over a half an acre of land with some zoning that affords a developer to build a pretty significant boutique condo tower with luxury units as the end destination for this site."
While developers initially sought out older condominium buyouts after the passage of Florida’s Condo 3.0 bill, Harbor Condominium is now part of a growing trend of condo boards and their owners approaching brokers for buyouts.
Passed by Gov. Ron DeSantis in early 2024, less than three years after the Champlain Towers South collapse in Surfside, the bill introduced sweeping reforms, from how buildings are maintained to how condominium associations are governed. The state’s oldest structures and their residents are likely to face the most costly upcoming assessments.
"It's critical to mention really what those changes in what the associations are responsible for," Blanca Executive Vice President Cary Cohen told Fox News Digital. "Post the tragedy of Surfside and now with the new regulations, associations have to fully fund reserves. In addition to fully funding their reserves, they have to satisfy the structural integrity reserve study."
"The reality is that not every unit owner is selling strictly for financial reasons," he continued. "A lot of this is a transaction born in case of need. … There [are] fixed-income residents who own the unit and are facing condo fees that have tripled."
Llorente emphasized that the decision to list came directly from the owners themselves, driven by "a little bit of everything," from finances and regulation to simple realism.
"Most importantly, in the past few years… the constant increase of insurance and the cost of living, the maintenance in general since our property's waterfront, all those just make it extremely harder for our community to keep maintenance and keep up with all the city regulations," he said.
"What the board decided to do is create a sales committee with some of the owners that have been there for decades… We interviewed [firms] one by one, we [sat] down with them and ask[ed] them to explain the whole process, the whole situation. And after this screen[ing], we decided to choose Blanca and MSP Group as the one that we want to represent us on the market," Llorente expanded. "They're very straightforward. They explained in detail the step-by-step of the whole process. And we are extremely happy so far with the job that they've done."
Cohen said the "key" is transparency.
"Transparency between us and the unit owners," Cohen said. "We are seller representatives. We don't work for developers. We work for the individual owners in positioning their property in the best way in the marketplace, and that's our motto."
"While we are seller representatives, and we do represent the best interest of the unit owners, that's coming from the vantage point of having a pretty deep knowledge of how development works," Mekras added. "We can understand what makes an opportunity for a developer, where the risks are, how to mitigate them … and communicate that effectively to the community."
Collective unit sales can yield far more for owners than individual listings, with Cohen arguing that the return on investment is three to five times higher. MSP Group also said they have closed more than 15 condo termination deals like the one with Harbor Condominium.
"When the condo unit owners were able to see our track record, it also made them feel comfortable that we're going to be able to get the transaction closed," MSP’s senior investment associate Sam Mekras said.
However, the real estate experts cautioned that not all older residential buildings qualify for gold-mine status.
"Not every condo owner in an aging property is so fortunate because some of the recipe for success is much like the Harbor site. We have what we would call a low-density site. It's only a two-story project with 29 units on just over a half an acre … that affords a robust redevelopment," MSP’s CEO noted. "A westerly, landlocked community that doesn't have the redeveloping potential, then those condo owners aren't necessarily going to be so fortunate."
Looking at life after the eventual sale, excitement meets some anxiety as Llorente points out the residents’ reactions are a mix of optimism, curiosity and concern about displacement. Some owners are native Floridians, while others hail from South America, Italy, Australia and elsewhere — most of whom plan to remain in the Sunshine State.
"Some of the older owners that have been there for decades, they have a little anxiety," Llorente said. "Mainly, we just keep the communication fluent, and we just contact them when we have any news or updates. … And some, they're extremely excited about cash[ing] out. … But I think the most important thing here is to understand the reason and why we are going to the market."
"One of the things we did a really good job at was sitting down individually with every unit owner and explaining, when we get this done, the money they're going to get, how they're going to have an alternative place to live, and [that] they're going to be able to be in a better financial position than in a building where they're having trouble affording the dues," Sam Mekras said. "Every deal has got to work for both sides."
"We're actually seeing a second wave of migration into South Florida. The political climate of the Northeast is driving a new wave of companies to locate here in South Florida. With those relocations creates new demand for places where their executives and their employees live," Cohen said. "Everyone wants to live by the water. That's the benefit of South Florida, that's the benefit of North Bay Village … and that's what Harbor is offering to a developer."
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