The company behind some of Miami’s gleaming condo skyscrapers is targeting Palm Beach County.
The related Miami group is looking to build residential projects across the county, including Ritz-Carlton residences in West Palm Beach, where finance companies and their well-paid executives have flocked during the coronavirus pandemic.
In West Palm Beach, where land is both scarce and expensive, expect Related Group to apply to the city for permission to build tall residential towers it owns to the east and west of the downtown.
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On the east side of town, Related plans to build a Ritz-Carlton Residences condominium, a development that will bring global attention to the town and could spur its growth.
The two-tower Ritz-Carlton condominium would be built at 1717 N. Flagler Drive, according to people familiar with the plans. The $230 million project is expected to feature 140 units that range in price from $1.7 million to $10 million. Currently the site is zoned for approximately 40 feet in height. But the area could be showcased in a new part of town that would allow towers over 300 feet tall, or at least 25 stories.
The Ritz-Carlton West Palm Beach will be limited to condominiums and will not offer hotel rooms, informed sources said. Officials of the related group declined to comment on details of the project.
A Ritz-branded condominium means Ritz-Carlton will run it to the specifications of its luxury hotels. This includes pool attendants, valets, concierge staff, and the legendary service that includes employees who know residents by name.
Meanwhile, at the west end of downtown near Clear Lake, Related Group took control of Transit Village late last year, a mixed-use, transit-based development of 1, $3 billion covering 10 acres on Clearwater Drive and South Tamarind Avenue.
With Related on board, the project now hopes to build four 25-story towers with nearly 986 apartments, including 165 micro-apartments, according to project lead Michael Masanoff. The plan for almost 1,000 apartments, more than double the number previously described, is expected to be submitted to municipal authorities for approval this month. A 108-room hotel and an office complex are also part of the project.
More than 20 years ago, Related Group helped launch the renaissance of downtown West Palm Beach with the construction of many downtown residences. These projects included The Slade, Villa Lofts, The Tower Condominiums at CityPlace, The Prado and The Courtyards at CityPlace.
But in recent years, the company has focused on Miami-Dade and Broward counties, becoming a major builder of luxury condominiums, especially on the waterfront.
However, with the pandemic pushing people across the country to South Florida, Perez says Palm Beach County’s growth means the county is ripe for Related Group to play a major role in the market.
Officials of the related group say they don’t just want to start a handful of companies.
“We hope to build products for everyone and be the dominant player in the market for a very long time,” said Jon Paul Perez, president of Related Group and eldest son of Jorge Perez, founder and CEO of the company.
Related returns to Palm Beach County, where he was nearly burned before
Peter Zalewski, a Miami-based condominium consultant, said Related Group’s return to West Palm Beach marks the company’s renewed optimism for a city where it nearly burned down more than a decade ago.
“The fact that Related is returning to West Palm Beach is interesting,” Zalewski said.
Related Group’s last luxury condo in West Palm Beach was CityPlace South Tower, completed in 2008.
As completion neared, sales of condominium units slowed due to the deepening recession. Some buyers have also waived their contracts.
In 2009, Related ceded control of the property to a consortium of partners led by Toronto-based Scotia Capital. Scotia Capital had filed for foreclosure on a $134.7 million mortgage it granted in 2006.
In 2015, Gulfstream Capital Partners of Dallas picked up 309 of the tower’s remaining unsold units in a wholesale purchase worth $63.9 million.
At first, Gulfstream started selling units between $160,000 and $600,000. Today, units range from $375,000 to over $1 million.
With the real estate market now tight and demand for living near the coast booming, “hopefully they’ll be more successful this time than last time,” Zalewski said of Related Group.
The two related companies involved in projects in the West Palm Beach area
Related Group was formerly related to Related Cos. of New York, which is led by Miami Dolphins billionaire Stephen Ross.
Related Cos. of New York is the developer of The Square (formerly CityPlace), the Hilton West Palm Beach hotel and the 360 Rosemary office building.
Related Group and Related Cos. separated several years ago, and now they operate separately.
In West Palm Beach, every company competes to buy land and redevelop properties into residences, office buildings and hotels.
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While Related Cos. is an active developer of new projects such as the One Flagler office building along Flagler Drive, Related Group is also involved in several West Palm Beach businesses.
One apartment project currently under construction is Icon Marina Village at 4444 North Flagler Drive, two luxury rental apartment towers that will be ready for occupancy by the end of the year.
Icon Marina Village, with its 400 apartments, will be the only Class A rental property on the water in West Palm Beach, Perez said.
Related Group was also a lead investor in a mixed-use project along the South Dixie Freeway south of downtown, the Tricera Capital-led redevelopment of The Palm Beach Post property. The complex, now dubbed The Press, has a standalone Starbucks. Soon a Joseph’s Classic Market and other tenants.
The main focus of the company now is to build new residential towers in the city, including the Ritz-Carlton Residences.
City personnel officials are developing a proposal to create a new zoning district on North Flagler Drive that could allow construction of the Ritz-Carlton towers at 1701 North Flagler Drive and 1717 North Flagler Drive, now an apartment building and a shopping center. The neighborhood would allow towers as tall as those permitted in a recently approved neighborhood around Currie Park.
Real estate sources say Ritz-Carlton Residences with glass exteriors will range in size from 1,700 square feet to 2,800 square feet for standard units, with penthouses ranging from 4,000 square feet to 5,000 square feet.
Related Group appears to be moving quickly on this project: Related just last year purchased the Flagler Drive sites for $13.9 million, according to county property records.
The company has an existing relationship with Ritz, which is part of Marriott Corp. A Ritz-Carlton residence in Tampa by Related Group is currently under construction. The first tower has already sold out and a second tower is in the works, real estate sources said.
At the western end of downtown, Related is developing Transit Village, which has been modified to add more rental apartments and even very small units called micro apartments. Transit Village is connected to Tri-Rail and Amtrak Station and County Bus Transit Center.
Masanoff said the ownership of Related Group has energized the project because the company has experts at all levels who can initiate construction. “They’re ready to go,” Masanoff said.
What was once planned as three towers for offices, apartments and a hotel will now be offered as four towers, all reaching 25 stories, a height already allowed by zoning rules, Masanoff said.
The apartments will occupy three towers, while the southernmost tower will now be a combined hotel and office tower, with 183,000 square feet of office space. The increase in the number of apartments was driven by increased demand for rental units, Masanoff said.
In addition to luxury condos and apartments, Related Group is also working on a potential residential development of 300 mixed-income units on a site just north of downtown. More details are not yet available.
Associate also active in Lantana, Boca Raton apartment complexes
Outside of West Palm Beach, Related Group is completing construction of the second phase of a 720-unit apartment complex that is part of a mixed-use Lantana project called Water Tower Commons.
And in Boca Raton, the company recently began renting apartments at its newly built luxury rental complex, Manor Broken Sound. Some of the project’s “tiny townhouses” rent for as little as $7,000 a month, Perez said.
Further south, just over the county line in Broward County, Related Group recently won approval from the City of Hillsboro Beach for high-end condominiums on a 12-acre site along the “Millionaire’s Mile”.
The 100-unit luxury condo will feature 12 stories rising on an oceanfront plot along the A1A state road and three stories on the west side of the road.
Even with all of these projects underway, Related is looking for more sites to build on, a task Perez said isn’t easy with so many other companies trying to do the same.
Nonetheless, Perez said the company is determined to leave its mark on the county.
“We like to come in and not just do one project,” Perez said. “We want to do several projects.”