Soave Real Estate starts site work today on condo tower development Kalea Bay in North Naples – the first construction on a high-rise in Southwest Florida since 2007.
The bold move by Detroit-based Soave comes as the once shell-shocked sector suddenly starts to show signs of life in Lee and Collier counties.
Richard Corace of Soave said he hopes to dominate the market with the project's five towers off Vanderbilt Drive.
Kalea Bay, formerly known as Cocohatchee Bay, is permitted for five towers and has resolved an issue with Collier County over an eagle's nest on adjacent property that delayed the project in the past.
Soave hasn't applied yet to get a Collier County permit for the actual building but is permitted to get started on water, sewer, pavement and pilings for the condo.
"I think we're unique in that the property we're offering, having views of the water, is really the only property of this size and scope left in Collier County," he said. "It's not just the concept that we're getting a head start on everybody."
Still, the race is on.
Three other developers have announced their intention in the last year to build condo towers in Lee and Collier:
Most recently, Miami-based Jaxi Builders Inc. bought the old Cypress Club two-tower high-rise site in downtown Fort Myers for $4,675,000 and announced plans to begin sales for a luxury condominium there next year with construction starting in 2017.
The Naples-based Ronto Group announced in May 2014 that it's planning 26-story Seaglass in Bonita Bay. Construction is scheduled to begin at the end of this year or early 2016.
In November, WCI Communities – a powerhouse high-rise builder itself before the crash - announced plans to build 21-story tower Altaira at The Colony Golf & Bay Club in Bonita. Construction should begin in August, according to a written release sent by WCI on Friday.
One analyst said he's not sure the Southwest Florida high-rise market can absorb that many buildings coming on line in a short period of time but that there are some favorable trends.
"I think they're probably sensing that the big migration of baby boomers for permanent and secondary residences is underway and they're going to capitalize on it," he said.
On the other hand, McCabe said, "It's still very difficult for buyers to attract financing. It sounds like they're going to be depending on a lot of cash buyers."
But the developers themselves have no such doubts.
"People are making reservations," Corace said – Kalea Bay has about $100 million worth reserved "which we will convert (to contracts) at the end of this month."
Buyers will then have to make a 10 percent deposit, he said, but Soave won't be requiring buyers to finance the rest of the project's costs as well – now a common practice by high-rise developers in Miami.
"We're using traditional bank financing," Corace said. "That's the way we've always done it."
Anthony Solomon, executive vice president of Ronto, said the company has already applied for permits and has converted reservations to contracts with 30 percent down payments.
The market for high-rises in Southwest Florida is solid, he said: "They've been your prototypical Naples buyers: from the Mid-Atlantic states and the Midwest. We don't have any investors – they're all end users."
The market for existing units at Bonita Bay also indicate the time is right, Solomon said. "You've seen resales trade hands at prices that justify new construction."
Corace said he's struck by how young Kalea Bay buyers are: "The average age is about 54. When I came down here 25 years ago, the average age was 72."
The downtown Fort Myers high-rises were hit particularly hard by the recession but Jaxi president Abel Ramirez said the time is right for his project.
He estimates prices will start at about $300 per square foot, less than half the prevailing rates in Miami.
Also, Ramirez said, more and more people want the more urban, walkable lifestyle available in a newly revitalized downtown. "People are realizing they spend a lot of time in their cars. They're looking for places where you can walk to your place of business, walk to get a cup of coffee somewhere."
Courtesy of News-Press.com