Article Courtesy of The
Commercial Observer
By Julia Echikson
Published April 30, 2023
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Nestled between some of the country’s most expensive ZIP codes, the Briny
Breezes community spans 43 acres, housing 488 mobile trailers on a barrier
island in Palm Beach County. Structured somewhat like a co-op, each homeowner
owns between 20 and 80 shares in the Briny Breezes township.
The proposal — which
totaled $502,496,000 — averaged out to just over $1 million
per owner, but residents deemed it too low and rejected the
bid last Thursday, the Coastal Star first reported.
Kolter executives “thought they were going to eat us like
lunch meat,” James Arena, a real estate broker who grew up
in Briny Breezes and still resides there, told Commercial
Observer. “But $500 million is a joke. We literally laughed
at them” at the Thursday meeting.
The bid may sound like a lot, but it was less than the price
offered 16 years ago — well before the pandemic boost to
South Florida’s already hot real estate market. Back in
2007, residents agreed to sell the land for $510 million to
a joint venture that included Jorge Perez’s Related Group.
But in the aftermath of the 2008 financial crash, the
investment group pulled the offer.
Kolter’s proposal,
according to Arena, included only a $50,000, non-refundable
deposit, which would have been divided among shareholders,
as well as a three-year due diligence period. Those clauses
irked residents. |
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Residents of an oceanfront mobile-home park in South
Florida rejected a $503 million buyout offer from The Kolter Group.
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A
major development could face opposition from neighbors, whose single-family
homes are worth in the tens of millions of dollars. The area is also populated
by low-rise apartment and condo buildings.
“We’re not interested in taking the risk,” Arena said.
The Kolter Group had also not directly met with all residents. The Delray
Beach-based developer is well known in South Florida. Late last year, Kolter
secured a $240 million construction loan for an oceanfront condo tower in Fort
Lauderdale, despite the rise in interest rates, which tightened the lending
market.
A spokesperson for The Kolter Group declined to comment. Briny Breezes town
officials did not respond to requests for comment.
Briny Breezes’ homeowners aren’t opposed to selling their property to
developers, Arena said, but any buyer will have to pay a hefty price. “It’s not
just 43 acres on the Intracoastal. This is a township in Palm Beach County where
the developer controls the master plan.”
Kolter’s $500 million bid comes as developers are eyeing buyouts of aging
waterfront properties as they face mounting costs. Following the deadly collapse
of the Champlain Tower South condo two years ago, the Florida legislature passed
laws essentially forcing condo owners to pay for expensive building repairs.
Compounding the costs are rising insurance premiums. A slew of insurance
carriers have either declared bankruptcy or dropped policies in the Sunshine
State after Hurricane Ian made landfall last year. The Category 3 storm is
likely to become Florida’s most expensive recovery.
The buyouts allow developers to build along the water, which still commands top
dollar among homebuyers. But such deals remain difficult to close because the
vast majority of unit owners must agree.
The largest buyout underway is now Castle Beach Club, a 570-unit oceanfront
condominium in Miami Beach. David Martin’s Terra offered $500 million to acquire
the property, which sits on 4 acres. Condo owners are considering the bid.
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