Developers are planning to build luxury residences as part of a $2 billion renovation at a signature South Florida marina that hosts the world's largest boat show, but questions linger about how many high-end residences the market can absorb.
The Related Group, Tate Capital and Rok Acquisitions intend to develop 80 condos in two residential towers and 79 condo-hotel units atop a 197-room St. Regis-branded hotel at Bahia Mar in Fort Lauderdale. The makeover, including a beach club, shops, restaurants and a public park, is expected to begin in 2026 and take about three years to build.
The development team reduced the size of the project from what was originally proposed and is betting wealthy buyers will flock to a "Monaco-inspired lifestyle destination" that annually hosts the Fort Lauderdale International Boat Show. Still, the city has already seen thousands of expensive condo units built in recent years as demand moves north from Miami.
"How many millionaires are there in the Northeast that haven't bought a place in South Florida yet?" said Jack McCabe, a U.S. housing analyst for McCabe Research & Consulting, in an interview.
The Bahia Mar condos in the two, 270-foot towers are priced from $4.8 million, while the condo-hotel units start at $2.6 million. Condo-hotels allow owners to put the units into a professionally managed rental pool when they aren't living there.
The Douglas Elliman Florida brokerage is marketing the 159 units for sale. Two additional condo towers could come later, depending on market demand, according to the development team.
Builders often cite the high cost of land and materials and say the only way some projects make sense financially is with luxury units. But demand is also driving much of the high-end development, according to Jay Phillip Parker, CEO of Douglas Elliman Florida.
Parker noted the steady influx of wealthy residents from other areas of the country and abroad as reason to be optimistic about the long-term luxury market in South Florida.
South Florida migration
"People follow money," Parker said in an interview. "As wealth continues to migrate to South Florida, that creates elements of need."
From the Homes.com blog: Buying a Condo: A Comprehensive Guide
The Bahia Mar facelift also comes at a time of serious concern for aging condos in the Sunshine State. A new building safety law requires inspections and potentially millions of dollars in repairs at older condo towers statewide. That's leading to questions about the ultimate value of units in structures built before the early 2000s.
But even with Bahia Mar's favorable location and the track record of the developers, including prominent condo builder Jorge Perez at Related, analyst McCabe believes the project carries risk.
"How much is too much when it comes to pricing and number of units?" he said. "I think we're reaching that point now."
During the nation’s historic housing collapse from 2006 to 2010, Miami was one of the nation's hardest-hit metropolitan areas. Once the market bottomed, foreign buyers swooped in, scooping up units on the cheap and eventually allowing developers to start the next construction wave in 2011.
As prices rose in Miami, investors and other buyers moved north to Fort Lauderdale, saying it has much of the same appeal, but at a lower price point. That led to a building boom of upscale condos in Fort Lauderdale. Commuter trains, including Brightline, connect Miami with Fort Lauderdale and West Palm Beach, making day trips across the region convenient for South Florida residents and tourists.
Tate Capital's Jimmy Tate has been working to redevelop the marina for the past decade, but some residents opposed previous ideas, saying they weren't appropriate uses of the city-owned 39 acres. Fort Lauderdale commissioners approved the current plan this fall, touting the $1 billion the city will receive as part of a 100-year land lease with the developers.
The income to the city includes a percentage of the condo sales and resales, according to Fort Lauderdale Mayor Dean Trantalis. He voted against a previous proposal but said this plan is much more favorable to the city and its residents.
"It reduced the size of the original plan by half so there will be fewer units and more open space, especially to accommodate the annual boat show," Trantalis said in an interview.
The Bahia Mar dates to 1966, and an existing hotel opened in 1975. It will be demolished as part of the new plan.