Inter-island moves driving recent activity, brokers say
From left: Steve Wynn, Tom Ford, Tommy Hilfiger and Steve Ross (Getty)
Like tennis, golf, fishing and even pickleball, real estate is a sport in Palm Beach. And the players are billionaires and multi-multi-millionaires buying and selling mansions in the swanky town.
Spanning only 7.8 square miles, Palm Beach has a limited inventory of residential properties on the market, and an even smaller number of in-demand, move-in-ready homes. Add the surge of pandemic-fleeing out-of-state residents during recent years, and the result is skyrocketing prices and profits.
Lately, activity at the upper high end is being driven by locals making “inter-island moves,” said Premier Estate Properties agent Margit Brandt. The buyers and sellers include designers Tommy Hilfiger and Tom Ford, billionaire casino magnate Steve Wynn, coffee magnate Bob Stiller and cosmetics billionaire William Lauder.
“There’s only so many houses. For that reason, prices are holding strong,” she said. “When someone wants premium oceanfront, there is so little of it.”
Recently renovated or newly completed homes are securing premiums, but buyers are also now able to get deals on unrenovated homes or those considered teardowns, brokers say.
Just 16 single-family homes traded on the Multiple Listing Service in the first quarter of this year, down more than 60 percent, year-over-year, according to Douglas Elliman’s reports. But even though Palm Beach is seeing a significant slowdown in sales, the market is still notching record deals. Many sales are happening off-market.
Suzanne Frisbie, a Corcoran Group agent whose family also develops real estate, said only 57 properties with 2 acres or more exist on the island, which helps keep pressure on pricing.
“I suspect everybody has been called, or asked even directly, ‘What would it take to buy your house? Would you sell?’” Frisbie said.
Rush Limbaugh’s former estate, considered a teardown, sold for $155 million in March. A month later, another oceanfront estate traded for $170 million. Stiller, the coffee mogul who founded Green Mountain Coffee Roasters, sold the latter, a 1.6-acre property at 589 North County Road, to luxury car dealer Michael Cantanucci.
“When somebody comes on the market quietly and sells for [$170] million in two weeks, yeah, there’s pent-up demand,” said developer Todd Michael Glaser. “It’s people living in $20 [million] to $50 million homes waiting for their forever home.”
Ford is a prime example of that. The designer set a non-waterfront record with his $51 million purchase of the mansion at 241 Jungle Road in December, only to later swap homes with real estate executive Brian Kosoy and his wife, in a deal that was valued at more than $100 million. The deeds were recorded in May, but don’t disclose the real sale prices for each property. Ford upsized from a 10,200-square-foot mansion with three bedrooms, plus a two-bedroom guest house on a 1-acre property to a 17,424-square-foot, five-bedroom mansion on a 1.6-acre lot.
“People enjoy [looking for real estate]. They plan their day around it, and they’re in hopes of finding the house,” Glaser said.
Hilfiger recently flipped the house at 930 South Ocean Boulevard for $41.4 million, less than six months after buying it from top Palm Beach broker Lawrence Moens. Hilfiger paid $36.9 million for the property in January.
Glaser and his partners are betting on finding a buyer in the 1 percent pool for Glaser’s priciest single-family home development to date: the 2.2-acre estate at 10 Tarpon Isle, on the market for $218 million. The partnership paid $85 million for the property, which is on its own island, in 2021, and Glaser embarked on a major expansion and renovation.
He and his partners recently flipped the Intracoastal Waterway-fronting mansion at 854 South County Road in Palm Beach for $63.4 million. They paid $53 million for the 2-acre estate in February 2022.
Also on the market: Lauder’s two adjacent and empty oceanfront lots at 1063 and 1071 North Ocean Boulevard in Palm Beach, which are asking $200 million. Jim McCann of Premier Estate Properties has the listing.
Glaser and others partially credit new commercial development in West Palm Beach, driven by Palm Beach resident and billionaire developer Steve Ross, with fueling some of Palm Beach’s growth. Luxury condo development is also ramping up across the bridge in West Palm.
Ross’ Related Companies has become the largest office landlord in downtown West Palm Beach. The firm also owns The Square, an open-air mixed-use retail property that was originally called CityPlace.
Billionaire hedge fund manager Ken Griffin, who has spent hundreds of millions of dollars on residential real estate in Palm Beach over the past decade-plus, also is doubling down on the island. Early in the pandemic, his Citadel Securities operated its trading room in the ballroom at the Four Seasons Palm Beach, and that financial services firm and his hedge fund Citadel plan to open an office on Worth Avenue.
Still, not everything on the Palm Beach market is selling easily. Sellers are cutting some prices for teardowns or land sales, especially now that it’s the summer.
“[Smart buyers] strike in this window now where there are deals to be had for aggressive buyers,” Brandt said.
Brandt was recently involved in the $25 million off-market sale of a waterfront home built in 1980. She represented an entity led by Glaser, who ended up flipping the contract to a company linked to billionaire Thomas Peterffy, according to property records. The house could be gut-renovated or torn down.
Many buyers are avoiding properties that require new builds because they don’t want to go through the arduous planning process, which involves going before the Architectural Commission (ARCOM) board, brokers say.
“Land prices have slowed a bit because of the work it takes to build and the timeline to build,” Brandt said. “Anything renovated, move-in ready, turnkey and priced appropriately is gold.”
source: https://therealdeal.com/miami/2023/06/14/inside-palm-beachs-ultra-luxury-residential-market/