Condos, Regulations And The Reinvention Of The Palm Beach Market

The population of Palm Beach is on the rise, driving up housing demand across the board. At the same time, massive new office developments are signing new tenants, and multifamily complexes are selling for millions of dollars more than they were purchased for.  

“The Palm Beach market is being reinvented,” said Joe Hernandez, partner at local law firm Bilzin Sumberg. “It is changing to meet the demands of a growing population and the investment from various capital sources.”

Hernandez will discuss the changing needs of Palm Beach at Bisnow’s Palm Beach State of the Market event on Dec. 4 at the Hilton West Palm Beach. Register here for the event. He will be moderating a panel on the boom of luxury condos in the area. 

Bisnow spoke with Hernandez to learn more about his views on the local condo market and what he is most hoping to discuss at the event.  

Bisnow: How would you describe the current state of the Palm Beach market, specifically the luxury condo market, which is the focus of your panel?

Hernandez: Palm Beach County has seen a slowdown in activity for existing condo buildings, as many of the older buildings have seen high special assessments and higher monthly maintenance fees to conform with new standards for repairs and reserve funds that must be in place under the recent amendments in the Condominium Act.  

Condo units in existing buildings are staying on the market a bit longer, but well-maintained buildings with recent renovations, direct ocean access and strong reserves continue to attract buyers to Palm Beach. Older units may take longer to sell, but if priced correctly, they still seem to present strong opportunities for buyers.

The market for new luxury condo projects seems to be considerably more active. It is performing very well and is arguably outperforming Broward and Miami-Dade. West Palm Beach’s premier new developments, including South Flagler House, Olara, Forte, Mr. C’s, Shorecrest and Avenir, seem to have been well received. The development of branded properties has also brought attention to some new, previously overlooked neighborhoods in Palm Beach County, as luxury buyers are always on the hunt for recognizable brand names.

Bisnow: Can you describe your role at Bilzin Sumberg?

Hernandez: I am a partner in the real estate practice group. I counsel a variety of clients in negotiating and structuring complex commercial real estate transactions, including real estate developers, financial institutions, private equity firms, family offices and public entities. A large part of my practice involves representing developers and investors in the area of condominium redevelopment, which oftentimes involves the bulk acquisition of condominium units and the complex process of terminating an existing condominium. 

I help clients navigate all stages of the process, from due diligence, joint venture structuring, structuring bulk acquisitions and termination strategies to acquisition financing, construction financing and mezzanine financings that facilitate redevelopment.

Bisnow: What do you think the hottest topics of conversation will be at this event?

Hernandez: The hot topic for those who follow the condominium markets and the acquisition, termination and redevelopment of older condo projects will be the current status of the law governing termination of condominiums following the Biscayne 21 case and the Florida Supreme Court’s refusal to rule on the 3rd District Court of Appeal’s certified question on condo terminations.

As a result, Biscayne 21 remains intact, and for the time being, a resulting cloud of uncertainty still hangs over all similarly situated condos throughout older areas of Florida. Another hot topic, specific to Palm Beach County, is how certain areas — such as Lake Park, located near downtown West Palm Beach, and South Flagler Drive — are rapidly emerging as highly desirable locations for new luxury development projects.

Bisnow: What are some key takeaways you hope attendees will have from the event?

Hernandez: I hope the attendees will get a better sense of several things, including how capital partners, from institutional investors to private equity and family offices, view the opportunity to invest in Palm Beach’s mixed-use and residential markets. 

I also hope they learn which areas of Palm Beach County present good investment opportunities and how the Palm Beach region responds to many new projects in terms of growth of infrastructure and amenities. Finally, I hope we discuss how the local government views all the new developments in Palm Beach County.

This article was produced in collaboration between Studio B and Bilzin Sumberg. Bisnow news staff was not involved in the production of this content.

Studio B is Bisnow’s in-house content and design studio. To learn more about how Studio B can help your team, reach out to studio@bisnow.com.