12-story condo tower planned at Marina San Pablo

[thelakelander]

By Roger Bull

Eight years ago, The Marina San Pablo tower sold out immediately, all 56 condominium units. Another condo tower was planned right next door. But then the housing market crashed and that land has sat empty since then.
Now a new condominium project has been announced for that site just off the Intracoastal Waterway near San Pablo Road and J. Turner Butler Boulevard.

Called Aphora at Marina San Pablo, it's planned for 12 stories and 57 residences with prices $600,000 to $2 million. It will be waterfront within the marina and is being developed by Bove LLC and Remi Properties.

full article: http://jacksonville.com/business/2015-01-28/story/12-story-condo-tower-planned-marina-san-pablo

[thelakelander]

Want to build a condominium tower? Look for another market.....

Aphora at Marina San Pablo plans on hold, developer shifts focus

Current market conditions do not appear favorable for luxury high-rise condominiums as two projects that would had been marketed for that purpose are now on hold.

Gabe Bove, a Jacksonville developer, said his plans for Aphora at Marina San Pablo on the Intracoastal waterway are no longer active and he's shifting focus. Bove ran into the same problems as the developers of BeaconRiverside.

http://www.bizjournals.com/jacksonville/news/2015/12/02/aphora-at-marina-san-pablo-plans-on-hold-developer.html

[Captain Zissou]

Man that's harsh.  When was the last time we had 2 condo towers canceled in rapid succession?

[ProjectMaximus]

Man that's harsh.  When was the last time we had 2 condo towers canceled in rapid succession?

Probably 2008. What are you getting at, Capt?? 

[simms3]

So basically there is no interest in high rise product in Jacksonville.  Part of the obvious, even for buyers, is the wait/lag time before occupancy.  At least in FL I don't believe you can use escrow/deposit money for construction.  That would have me on pause too (someone correct me if I'm wrong).

Not an indictment on the developers but I do think it's oddly sad that in a coastal FL market there is no interest in this product.

[ProjectMaximus]

At least in FL I don't believe you can use escrow/deposit money for construction.  That would have me on pause too (someone correct me if I'm wrong).

The bizjournals article about the Beacon said construction loan could be obtained if deposit money held in escrow covered the cost of the loan. 

[simms3]

So in effect the developers don't come out of pocket.  I would have a hard time buying a new condo in Jax by a sponsor with relatively little or no condo experience then too.  I'm surprised lenders would go with a sponsor that barely had any skin in the game if at all then either.  My experience with developing condos in multiple cities across multiple states is often sponsor equity first before loan kicks in, and often you cannot use escrow money for anything (think about the liability that places on prospective buyers - that's a free loan with no guaranty!!).

Are you sure about the escrow money?  I don't feel like digging; I'm currently stuck in traffic in a cab bouncing between emails.

[ProjectMaximus]

I'm not sure, but also that's not really what I was trying to say. Here's the quote:

Condo construction loans have strict requirements that typically call for at least half the building's units to be sold before approval can be obtained. Weber said other ways to obtain the loan would be to have the amount a developer asks for be covered in escrow accounts. Neither has happened for this project.

http://www.bizjournals.com/jacksonville/blog/morning-edition/2015/12/jacksonvilles-beacon-riverside-sales-suspended-as.html

[simms3]

That's still going back to interest though.  Apparently there is none for waterfront high rise product, which is weird in these times for a big waterfront city in FL like Jax.  Indictment on the market.  Could have been partially product too, which is something I did hear about Beacon well over a year ago.

[mtraininjax]

Man that's harsh.

How is it harsh? Its simple economics. People buying cannot get the financing needed to purchase. And there are plenty of Condos, already built on the market and people would rather buy existing and renovate than buy new.  Again, how is that harsh?

How many downtown projects have come under fire due to economics? Probably more than 2 at the same time.

[simms3]

These were high end condo developments (look at the pricing for Jax).  These were not FHA buyers or marketed to those with bad credit or little liquidity.  They were no marketed to school teachers or fire fighters or even young professionals.  They were marketed to 40-50+, likely more like 60+, people looking to downsize into a condo.  Retirees, etc.

There is also not a lot of supply of condo resales on the market.  Condos don't come on the market that frequently in Jax (there aren't even that many condos at all, period - very few actually for a market Jacksonville's size in Jacksonville's location/climate on the water).  If you really want to downsize into a high rise condo, you only have a few buildings to choose from.  Many if not most have waiting lists to get in.

Oddly enough, what you don't have in Jax is a pool of buyers willing to pay for a new product.  Villa Riva and the Peninsula were the last, before the Recession.  Not sure about Peninsula, but finding your dream condo in Villa Riva is tough since few ever come to market.  Other buildings in the area (Ortega Yacht Club condos and Beau Rivage for instance) have "effective" waiting lists.  And these are riverfront, mainly catering to in town wealthy who wish to downsize - all of these buildings are almost exclusively locals, and grandparents at that.

One would think that transplants/snowbirds would be interested in Intracoastal or beachfront high rise condos.  Either the product was terribly off, and I heard it was with Beacon (but only from one source), or there is simply no such market in Jax, which I find disturbingly odd considering the times, the kind of financing you can get, the fact that there are enough people who can pay cash in Jax for 1-2 smallish condo projects, and the fact that this is a waterfront/oceanfront metro in Florida.

Clearly there are some market specific nuances at play here.

[CCMjax]

I think a lot of retirees and those in their 40's and 50's looking to downsize after the kiddos go to college are now looking for places where you can walk down the street to restaurants, shopping, etc.  The Beacon had that, being in Riverside, but I still think they were overpriced for the Jax market.  Wasn't the least expensive something like $600K with the average going for about $1 million?  I know you can get a pretty nice 2 bedroom condo right on the beach at Amelia Island Plantation for around $500K.  I think the ones at Beacon were larger but still that sounds a little high. 

[Captain Zissou]

Man that's harsh.  When was the last time we had 2 condo towers canceled in rapid succession?

Probably 2008. What are you getting at, Capt?? 

Between the shelving of proposed projects, the reemergence of zero down home mortgages, and the highly improbable new world's tallest building in Iraq it just looks like things are starting to feel pretty 2007-2008 again.

[finehoe]

...the highly improbable new world's tallest building in Iraq ...

Now Saudi Arabia is claiming the honor with the Jeddah Tower:

[simms3]

I think a lot of retirees and those in their 40's and 50's looking to downsize after the kiddos go to college are now looking for places where you can walk down the street to restaurants, shopping, etc.  The Beacon had that, being in Riverside, but I still think they were overpriced for the Jax market.  Wasn't the least expensive something like $600K with the average going for about $1 million?  I know you can get a pretty nice 2 bedroom condo right on the beach at Amelia Island Plantation for around $500K.  I think the ones at Beacon were larger but still that sounds a little high. 

It was one small condo project for a metro of 1.5 million people seeing 1-1.5% annual growth, largely from transplants and retirees from more expensive states or areas.  So those numbers don't seem astoundingly high to me, even for Jax.

Also keep in mind that the average new home in many newer cities such as Phoenix where incomes are lower like in Jax are approaching $300K.  Exceeding $400K in Denver where the incomes aren't 33% higher than in Phoenix.  Same story in other parts of FL.  Retirees have $$.  Stock market has done really well.  Retirement accounts have done well.  Incomes for the middle class buying new homes, such as in Nocatee or Oakleaf or wherever have not kept up, so if there is any group of people in Jax that should be able to more easily afford a large luxury condo to park money in, downsize in, and retire in, it is the demographic that these condo developers was trying to attract.  There should be at least as many of these kinds of sales as there are home sales in Nocatee.

Fact is there are clearly some weird nuances in the Jax market.  People don't like or appreciate high rise product there, and the 2 small high rise developments that were marketing missed some boat to attract what is clearly and oddly a small pool of people in this market.  Meanwhile, the middle class continues to be squeezed as they buy single family homes that are 3x their gross income.  Whoa.  That to me is way more backward than a middle class retiree spending $600K on a premium condo.  To be honest, even nowadays, $600K, even $1M is really not that much money.  $1M goes A LONG way in Jax and isn't even the average price of a home in many places in 2015, so it's surprising to hear.  To hear that you can get 2 bedrooms in a nice condo on the beach on Amelia for $500K - what is there no real demand and demand is only ginned up when sellers/developers give away the house?  People won't live in Jax except for basically free?  This is alarming to me.  Get past your Jax relativity and realize these are bottom of the barrel prices for this entire country.  Basically says the market is just about least in demand, nobody would live here if the prices matched those of similar cities.  Is the economy terrible?  Nobody wants warm climate with golf and boating in Jax?  Just weird.