Bottom Feeders Heading Up Florida Coast

The 50th bulk condo deal to close in the last two years in the troubled South Florida market didn't take place in Miami-Dade County, but to the north in Palm Beach County, a sign that the inventory in the Greater Miami area is being depleted rapidly, says veteran observer Peter Zalewski of Condo Vultures, a Bal Harbour-based consulting firm. Of the 50 deals in which at least 10 new apartments changed hands in a single transaction, 41 have been in Miami-Dade, heretofore the centerpiece of the beleaguered tri-county South Florida market, which also includes Broward County. "As the attractive bulk situations disappear in Greater Miami, private equity groups and institutional investors are being forced to revise their strategies in terms of quality, location and price," Zalewski commented. "Today, a bulk buyer is much more willing to consider a scenario in Fort Lauderdale, West Palm Beach, Orlando, or even Tampa, compared to a year ago when the focus was strictly on Greater Miami." Since July 2008, bulk buyers have acquired the deeds or notes for more than 4,800 units in South Florida for about $1.5 billion, or about $308,500 per apartment. In the latest transaction, a New York-based group paid $117.3 million for 146 apartments in the struggling 2700 North Ocean project in Riviera Beach. That's roughly $803,500 per apartment—for a distressed sale!