Earlier this month, the most expensive condo in the history of Palm Beach hit the market. The penthouse in the ultra-luxurious 2 North Breakers Row is asking $21.75 million.
It’s not as astronomical as it might sound. Another penthouse unit in the other building at Breakers Row traded for $17.68 million in September, according to The Palm Beach Daily — its original asking price of $19.995 million was the record at the time. Dana Koch of the Corcoran Group, who is representing No. N 4, says this listing is even more desirable.
“The luxury market is obviously on fire,” says Koch. “Every month it’s been appreciating.” The penthouse — one of only a handful in the two buildings — is 3,500-square-feet.
The condo at 2 North Breakers Row is “sprawling in the sense that you have eastern views, southern views — southeast — from the terrace. It’s beautiful,” Koch says of his new listing. All of the bedrooms face west, giving panoramic views of the city and the Breakers golf course. His listing also offers 10-foot ceilings, a rarity even in luxury Palm Beach condos. When the COVID-19 pandemic broke out in the United States two years ago, city dwellers with means sought refuge where they could have more space and privacy. “The same thing that happened in the Hamptons, happened here,” Koch says of Palm Beach.
“People were migrating out of the city.” Since it was March and spring break, lots of families were in Florida for vacation “and some of them never left,” Koch remembers. “We had a huge run on seasonal rentals in March and April 2020 and people were terrified. They didn’t want to go back to NYC for obvious reasons.”
People who had been considering a move to Florida, those who had been “dipping their toe in the water prior to the
pandemic,” now made a decision. “They dove into the shallow end. They moved so fast you couldn’t imagine. There was an overwhelming amount of buyers moving from places like New York City.”
• The Real Estate Roundtable: The Great Condo Rush in Palm Beach [RELATED]
Initially, buyers shied away from condos. “What ended up happening was, at the end of 2020 and beginning of 2021, people had a little more of a comfort level of what was going on. The condo market picked up significantly,” Koch says.
And it has not dipped since — not even in June of 2021 when a 12-story beachfront condominium in the Miami suburb of Surfside partially collapsed, killing 98 people. While the exact cause has yet to be determined, the investigation has focused on the degradation of concrete structural support due to water penetration and corrosion.
“It still is a topic of conversation,” Koch says. “As I tell people . . . . Is there a building falling every day? No. It was an anomaly. The building wasn’t taken care of properly,” adding that building codes in Palm Beach are stringent and condo boards are well-versed and diligent.
Buyers are keenly aware of what happened and ask more questions about a building’s structural integrity than ever before, he adds.
Condos Trailed Single-Family Homes, But Not By Much
Rosalind Clarke of Premier Estate Properties, who has 34 years in the business, says the problem is certainly supply and demand. “There is way more demand than we can supply,” she says.
While Florida handled the pandemic differently than New York, “I think there were COVID protocols in all the buildings,” Clarke says, adding that Palm Beach has one of the highest numbers of vaccinations per capita in the country. “I think that made people very comfortable.”
Prices have increased enormously, Clarke says. “I’m finding with the condo market, it actually trails the housing market, but it’s definitely caught up.”
Koch explains there were several factors other than getting comfortable with living in a pandemic. The housing market was moving at such a rapid pace that buyers couldn’t find exactly what they wanted. Condos in quality buildings have been, in some cases, “placeholders,” until buyers can find a single-family home of their dreams.
“Two years ago, people could sit on the Zillows of the world and essentially pick and choose. If they found something they liked, they could tell an agent, ‘I’ll be down in a couple of weeks.’ . . . you don’t have that
luxury anymore,” Koch says. “You have to be ready to act and act quickly.”
Since December 2020 when the condo market picked up again, inventory levels have fallen significantly. At the time of this interview in early March, there were 24 condos in-town, which are at a premium, across every single price point. “There are some buildings in New York that have 24 units for sale!” Koch says. There were 36 condos available on the south end.
“Sixty apartments for sale in Palm Beach — that’s mindboggling from an inventory perspective,” he says. “There’s got to be thousands” of condos, he adds.
The single-family home market is no different. There are more than 2,200 houses in Palm Beach, but fewer than 40 houses for sale, and out of 6,500 pieces of property, only about 100 parcels of land for sale, at the time of the interview.
“We’re selling ourselves out of a job,” Koch says with just a bit of a laugh.
A Penthouse for Everyone
A penthouse that Clarke was representing at the iconic 300 South Ocean Boulevard, on the ocean in Midtown Palm Beach, just went into contract. The one-bedroom apartment was asking $9.3 million.
Though it was on the market last year, the owners decided to take it off the market because they didn’t need to sell it. This time, it went on the market in December, before finding a buyer in early March.
Being a one-bedroom, there may be “a slight deterrent” for some, but Clarke says it is “one of the most exceptional apartments on the island. It has this huge terrace and then fantastic ocean views.”
The 3,864-square-foot pad is located in what Clarke calls a boutique building, originally designed in the 1960s by noted architect Howard Chilton, known as the vanguard of the Modernist movement. “Featuring his signature curvilinear silhouette, the six-floor, 45-unit building is on the corner of Ocean Boulevard and Brazilian, four blocks from tony Worth Avenue’s boutique shopping and fine dining venues,” a description reads.
“A lot of people who live in the building are major art collectors and we happen to have, on loan, museum-quality art in the lobby,” Clarke says. The lobby, recently upgraded, has a midcentury look, with “white-glove services,” including a full-time doorman, onsite manager and maintenance staff, as well as a gym and pool.
Scott Gordon and Mindy Gordon of Douglas Elliman Real Estate brought Penthouse 501S at 3100 South Ocean Boulevard to the market earlier this month at $8.9 million — the most expensive on South Ocean, at press time, Scott Gordon says.
It’s one of just 40 units available on South Ocean Blvd., when there were about 300 pre-COVID. “It’s a great indication of the condominium market,” he says.
With nearly 5,000 square feet of living space, Gordon says it is “a one-of-a-kind” with direct oceanfront to lakefront views with two balconies overlooking the ocean, pool and Intracoastal Waterway.
Located in Palm Beach Hampton, an ultra-luxury oceanfront building, the penthouse offers customized finishes, from custom closets to porcelain woodstyle flooring throughout. There are three bedrooms and five-and-a-half-baths, including an owner’s dual suite with a bedroom, two luxurious bathrooms and an office.
Luxury All the Way
Condo living has its perks, especially in luxury buildings. “It’s the ease of convenience. They can shut the door and not worry about anything,” Koch says.
Many purchasers are looking at condos from a lifestyle perspective. “They are looking for views, on the ocean or the Intracoastal. Does it skew toward an older buyer? Yes,” but the demographic is changing.
Clarke, a British native who moved to Palm Beach in 1979, has lived in a condo since 2006. “I like my beautiful view of the ocean. I like the fact that one can leave town and know that someone is looking after everything. It’s an added feeling of security.”
What amenities are buyers looking for in high-end condominiums in Palm Beach? “I think everybody wants a gym, but there are one or two (buildings) that don’t have a gym. I would say that’s a prerequisite for a lot of buyers. There are some good gyms locally and in some cases, people have a gym inside their apartment.”
“In the old days, the buildings used to have party rooms. They are not as popular anymore,” Clarke remembers. Now, it’s all about “full-time service — that goes without saying. A good manager is also very important,” she says.
“It’s a great choice of lifestyle,” she adds. “I just wish we had more condos.”
What’s Ahead
Downtown West Palm Beach has seen a lot of new construction. In The Bristol, which offers views of the Intracoastal and the ocean, there is not a single apartment left. La Clara, with 83 residences that won’t be completed for a year, is pretty much sold out. Forté, a collection of 41 residences, is 70% sold. Everyone seems to be waiting for the Flagler Towers, a two-building development designed by Robert A.M. Stern Architects, to come on the market.
This article was the cover story for the March issue of Behind The Hedges. Read the digital version here.
Email tvecsey@danspapers.com with comments, questions or tips. Follow Behind The Hedges on Twitter, Instagram and Facebook.
