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Palm Beach Daily News

Palm Beach real estate industry escapes housing bubble

Published: 5/18/2008
Source: Palm Beach Daily News
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Viewed 2015 Times

The skyrocket trajectory of the island real-estate market hit new heights last week with a $100 million sale of an oceanfront estate, but only time will tell if there's more fuel in the rocket.

 

Real estate mogul Donald Trump sold the former Abe Gosman estate at 515 N. County Road after floating the idea of razing the mansion and replacing it with a luxury hotel.

 

The Trump sale was the high point of a season of big-ticket real estate transactions.

 

Unlike the rest of the country, which has seen sales and prices fall, the island market is steaming ahead, according to real estate attorney Les Evans.

 

"It's the opposite of a bubble," Evans said. "Demand is increasing while supply is decreasing. I see it continuing. Look at the record sales we've had in the last few weeks."

 

Evans, who regularly produces a survey of the market called The Evans Report, said Thursday the median sale price of single-family homes was up $870,000 to $4.67 million in the first quarter of the year.

 

The median price for condos was $800,000, up $15,000.

 

Evans said the market is growing because investors recognize the growth potential for Palm Beach real estate and are putting their money there instead of in the stock market or other investments.

 

"You can't live in a stock or a CD," he said. "Here you can live and enjoy."

 

In addition, the supply is shrinking because of a trend of combining several smaller properties into fewer larger ones, such as replacing apartment buildings with a few townhouses.

 

"The number of units here is shrinking while you've got the Baby Boomers coming in and others who are looking at it as a safe investment."

 

Here is a look at a few of the notable sales of the season:

 

Trump house

 

515 N. County Road, $100 million

 

Trump bought the mansion at a bankruptcy auction for $41.35 million and spent $25 million renovating it.

 

He dropped his asking price from $125 million but still managed to set a sales record.

 

The main house covers 62,000 square feet. Two guest houses and a 50-car garage bring the total square footage to 81,738.

 

The buyer was undisclosed but is said to be Russian.

 

Although the house is under contract, the sale could still fall through, putting the hotel project back on the table, Trump said.

 

 

Kimmel estate

 

1236 S. Ocean Blvd., more than $75 million

 

Retailer and philanthropist Sidney Kimmel closed in April on the sale of 1236 S. Ocean Blvd. for a price said to be in excess of $75 million.

 

John L. Thornton and wife Margaret bought the Kimmel property. John Thornton was president and co-chief operating officer of Goldman Sachs from 1999 to 2003.

 

The property, on 5 acres with 316 feet of oceanfront, was listed with Paulette Koch and Dana Koch of The Corcoran Group.

 

According to one broker, the oceanfront property wasn't big enough to go around, drawing as many as 20 qualified prospects and numerous bidders.

 

Koch said interested parties included celebrities, sports figures and team owners, wealthy Europeans, a Saudi prince, hedge fund experts, Fortune 500 CEOs "and other captains of industry."

 

 

Lindemann estate

 

60 Blossom Way,

 

$70 million-80 million

 

Entrepreneur and art collector George Lindemann has indicated he will close on the sale of 60 Blossom Way about June 1, at a price said to be between $70 million and $80 million.

 

Venezuelan native Victor Vargas, president of Banco Occidental de Descuento, is the buyer.

 

The Lindemann property was not on the market and was said to be not for sale "at any price." The deal was put together by broker Lawrence Moens, whose speciality is private sales.

 

The Lindemanns' 27,000-square-foot house, built in 2000, was designed by Peter Marino in the Polynesian style of Bali. The 3.7-acre lot has 320 feet of ocean frontage.

 

 

Swanson spec house

 

589 N. County Road, about $40 million

 

Palm Beach developer Dan Swanson of Addison Development Co. in December had his new oceanfront spec mansion at 589 N. County Road under contract for an undisclosed sum.

 

Swanson declined to comment on the deal, but sources in town put the sales price between $40 million and the list price of $47 million.

 

Swanson bought the property for $11.8 million in December 2001 from the estate of Doris Merrill Magowan. It has 1.5 acres with 150 feet of direct oceanfront. A 1962 Bermuda-style home, guest house and staff quarters were razed.

 

The developer replaced them with a Mediterranean compound: a main house with 15,700 air-conditioned square feet, two guest houses and a seven-car garage.

 

 

The Reef

 

702 N. County Road, $31.85 million

 

The Reef, lauded as an architectural gem at The Paris Exposition of 1937, is still a scene-stealer seven decades later, landing $31.85 million in a private, very quiet sale in October.

 

The buyer of the landmarked oceanfront mansion at 702 N. County Road is Stephen M. Ross, co-owner of the Miami Dolphins and chairman, CEO and founder of The Related Companies, a real-estate development empire that created the Time Warner Center and dozens of luxury towers in Manhattan.

 

The Reef was not listed for sale, and no real estate brokers were involved in the deal.

 

Ross, who paid $6.36 million for a condominium at Il Lugano in 2002, is one of the four owners of CityPlace in West Palm Beach, which The Related Companies developed.

 

The sellers were Anita and Stuart Subotnick, executive vice president and partner in Palm Beacher John Kluge's Metromedia empire.

 

The Subotnicks paid $9 million for The Reef in October 1996.

 

 

Myers house

 

460 Worth Ave., $19.94 million

 

Stephen E. Myers Sr., co-founder and chairman of US Cable Group, in February sold his house fully furnished for $19.94 million, plus an unspecified sum for the contents. It had been listed at $23.9 million and came on the market in fall 2006.

 

According to the Palm Beach Board of Realtors, the sale was not within its Multiple Listing Service.

 

According to records at the Palm Beach County Property Appraiser's Office, Karlheinz Andresen and his wife, Marianne, of Hamburg, Germany, bought the property, which is just south of the Town Docks.

 

Myers paid $4 million for the property in June 1993.

 

The Mediterranean-style villa was built in 1991 on the site where society grande dame Sue Whitmore had lived. But in 1920, it was the location of Villa des Cygnes - House of Swans - which Addison Mizner designed for Maj. Barclay H. Warburton.

 

 

Former Wilmot estate

 

1075 N. Ocean Blvd., $23 million

 

The former site of socialite Molly Wilmot's home, developer Paul Wittman bought the vacant land and erected a "pure Mediterranean" design by architect Tom Kirchhoff.

 

In mid-July, exactly three years after he bought the oceanfront land, the mansion was under contract.

 

It closed in September for $23 million. Wittman's partner in the project was Peter Callahan, former owner of the National Enquirer and Star tabloids.

 

The buyers were Michael Schulhof, former head of U.S. operations for Sony, and his wife Paola.

 

The two-story house has 7,390 square feet on the first floor and 4,357 square feet on the second floor. It sits next to the former Kennedy estate, now owned by Marianne and John Castle.

 

 

Gittis estate

 

212 Via Palma, $22 million

 

In January, the estate of Howard Gittis had a contract for his home at 212 Via Palma, which was listed for $23.5 million.

 

The contract price was not disclosed but was said to be about $22 million, not much below the listing price of $23.5 million. More impressive was its short stay on the market - less than six weeks.

 

Designed in 1952 by Marion Sims Wyeth, the home was listed about Dec. 1 with Paulette Koch and Dana Koch of The Corcoran Group. Gittis' estate put it on the market less than three months after his sudden death at his home in New York.

 

Betsy Green, a New York broker with a desk in Palm Beach, represented the buyer, who is said to be Manhattan property baron Lloyd Goldman, one of the largest real estate owners in New York.

 

Records at the Palm Beach County Property Appraiser's Office show Gittis bought the waterfront compound in '01 for $9.95 million.

 

 

Nuestro Paradiso

 

860 S. Ocean Blvd., $16 million

 

Nuestro Paradiso, a landmarked oceanview mansion designed by Addison Mizner associate Julius Jacobs, closed in November for $16 million, more than five years after being reintroduced to the market.

 

Since June 2006, the three-story Gothic-Mediterranean edifice had been listed for $22 million with Cristine Condon of Sotheby's International Realty. Steve Hall of Brown Harris Stevens represented the buyer, shopping center developer John J. Cafaro of Youngstown, Ohio, and his wife, Janet Silvestri Cafaro.

 

According to the Landmarks Preservation Commission, the house is "one of the best and well-preserved examples of the Mediterranean-style villa." It was created in 1928 as a winter home for Ellis Z. Nutting, a sheet-music buyer for F.W. Woolworth.

 

Nuestro Paradiso is on a 1.5-acre lot and includes a 150-foot beach parcel, a large garden terrace, a 60-foot pool and a hard-surface tennis court. The new air-conditioned footprint after renovation was 18,663 square feet.

 

 

Il Lugano condo

 

300 Seminole Ave., $12.1 million

 

Miami Dolphins co-owner Stephen Ross set a sales record of his own - this one for condos - when he sold his penthouse at Il Lugano for $12.1 million.

 

The 5,798-square-foot unit's five terraces offer wide views of the Intracoastal Waterway, Palm Beach and the Atlantic Ocean, according to broker Susan Polan.

 

Lee and Laura Munder of Palm Beach bought the condo.

 

The unit is the only penthouse on the west building of the two-building Il Lugano complex.

 

The unit has its own boat dock, private cabana and four-car garage, Polan said. The cachet of the building makes it special, she said.

 

Developer Richard Schlesinger and his son, Adam, converted the 46-year-old Dorset House's 66 rental units into 14 luxury condominiums in 2000. As part of architect Gene Lawrence's design, a floor was removed to add height to each unit.

 

Pamela Gottfried, president of Martha A. Gottfried Real Estate, said the price per square foot is likely a state record.

 

 

Biltmore condo

 

150 Bradley Place, $5 million

 

Slim-Fast founder S. Daniel Abraham in December let go of one of his properties at the Palm Beach Biltmore.

 

The buyer, financier, Broadway producer and philanthropist Roy L. Furman, paid $5 million for two combined units on a lower floor. The layout has three bedrooms and 41/2 baths, and covers more than 4,300 square feet.

 

Abraham, who owns a few units in The Biltmore, paid $4.5 million in November 2006 for 109-G and 110-F.

 

Furman, vice chairman of investment firm Jefferies & Co., is vice chairman of Lincoln Center and co-produced Monty Python's Spamalot, The Pillowman and Dirty Rotten Scoundrels.

 

 

Smith commercial building

 

201 Chilean Ave., more than $2 million

 

Former Mayor Lesly Smith bought the commercial building at 201 Chilean Ave. that adjoins the Earl E.T. Smith Preservation Park named for her late husband.

 

The one-story structure once housed The Preservation Foundation of Palm Beach, which he co-founded.

 

The undisclosed price was said to be more than $2 million, no extra charge for nine parking spaces downtown.

 

The seller was Palm Beach art dealer John Surovek, who bought the 1,800-square-foot property "for about $1 million" in December 2004 from the Preservation Foundation.

 

Smith, who is president of the Fortin Child Care Foundation and the Fortin Foundation of Florida, said she will use the building to house their headquarters. She will move the groups' offices from rented space at 125 Worth Ave.

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Vice President of Public Relations
p (212) 848-0488
f (212) 415-6064
Director of Public Relations
p (212) 848-0446
f (212) 230-7317
Public Relations Coordinator
p (212) 848-0453
Marketing and PR Director, Corcoran Sunshine
p (212) 634-6521
f (212) 230-4132