Kevin Dickenson represents an investment group that tried to buy 125 distressed condos at Marina Grande when Boca Developers lost the building to the bank during the crash. "We were unsuccessful with the bulk purchase, but we did buy a fair number of short sales in the building," said Dickenson.
|Marina Grande 1407|
One of the condos purchased in 2010 was unit 1407 for $215,000. "No upgrades have been done to the unit because it's been a rental property," said Dickenson. This condo is currently offered for sale at $629,900 or rent at $2,475 per month.
In May 2015, the group turned down a $580K cash offer to buy unit 1407 and elected to sign a lease for another 12 months at $2,475 per month.
On the surface it seems like a foolish move since the rental only returns 1.0% over the next 12 months. Why did this investor turn down an offer that returns 270% on their initial investment?
The land acquisitions VP for WCI Communities (developer for One Singer, The Resort on Singer and Evergrene) shared that the cost to build Marina Grande today is $280/SF plus land costs. At $629,900 the price per square foot for Marina Grande unit 1407 is $292. This is why new towers like Water Club in North Palm start at $400/SF for a bottom floor unit and are priced as high as $800/ SF. "This makes it very clear that you won't find any new towers coming out of the ground for $300 per square foot," said Dickenson.