West Palm Beach’s most aggressive developer is offering payouts at one aging condominium that are three times what current market value dictates as the contest to snatch up waterfront land in the burgeoning city rages.

Since early December, a limited liability company whose vice president is a senior executive at Related Ross has bought about eight units at the 44-year-old Southbridge Condominiums across the Intracoastal Waterway from President-elect Donald Trump’s Mara-Lago estate, according to deeds and other documents filed in Palm Beach County official records.

Since early December, a limited liability company whose vice president is a senior executive at Related Ross has bought about eight units at the 44-year-old Southbridge Condominiums across the Intracoastal Waterway from President-elect Donald Trump’s Mara-Lago estate, according to deeds and other documents filed in Palm Beach County official records. The $700,000 sales price listed for each unit comes after Related Ross made an offer in November to buy all of Southbridge’s 60 residences, which are on a prime 1.3-acre lot at 3915 S. Flagler Drive. The total cost at $700,000 each would be about $42 million. The clamor has left some unit owners elated, while others are anxious and suspicious of neighbors’ motives. They find themselves in a high-stakes competition for one-bedroom units that sold for $150,000 or less even during the height of the pandemic-driven boom. “They offered me a ridiculous amount of money and that’s why people are selling,” said Jules Franco, who sold his 600-square-foot unit to Related Ross’ affiliate Southbridge Acquisitions in mid-December. “The offers started at X amount and then it was double X amount and then it was triple, and I said, ‘OK, it’s time to go.’” Franco, a Realtor and real estate investor, was given a recorded $700,000 for his unit. That’s a more than 500% increase from the $113,000 he paid in 2018. The current market value as determined by the Palm Beach County Property Appraiser is about $220,000.

Developers are vying to buy out Southbridge Condominiums in West Palm Beach, which along Flagler Drive across from Mar-a-Lago. The 43-year-old building is part of a short stretch of Flagler Drive with direct views of Mar-a-Lago where aging buildings have become prime property.

 

Related Ross, which is led by Miami Dolphins owner and Palm Beach billionaire Stephen Ross, declined comment for this story. The company is already building or planning multiple luxury waterfront condominiums along Flagler Drive including the South Flagler House, Shorecrest, and two towers expected to rise on land leased to the company by Family Church.

Purchasing, and likely razing, the Southbridge Condominiums would give the company another waterfront foothold in a city buzzing with a planned Vanderbilt University graduate business school, a new Cleveland Clinic hospital and growing reputation as “Wall Street South.”

Related’s offer was detailed in a Nov. 12 memo to Southbridge’s condominium association that was reviewed by The Palm Beach Post. It said terms for each sale would be negotiated with individual owners and included a closing time frame of 270 days.

The company noted that it wanted to buy as many units as possible so it can propose a condominium termination — a process where owners vote to legally dissolve a condominium association.

Why the Southbridge land is so coveted: 'People moving to Florida want to be on the water'

Binder said much of the buzz about West Palm Beach has to do with its overall growth since the pandemic, including the high-end financial and investment companies moving into downtown offices.

“And you can’t develop the waterfront on the island,” she said referring to Palm Beach.

Of the 60 units at Southbridge, just six are homesteaded, meaning the owner considers it their primary residence.

At least 19 are owned by limited liability corporations, or LLCs, tied to affluent businesswoman Nassrine Traverse, according to the Florida Division of Corporations. Another owner has six units under different LLCs.

Messages left for multiple association board members, Nassrine, and board attorney Phil Werner were not returned.

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Unit owner Sarena Weil said she believes the $700,000 offer is a steal for coveted waterfront property within walking distance of Mar-a-Lago, and didn’t like the 270-day closing timeframe included in the November offer. She’s also concerned that some owners of multiple units are in “cahoots” with Related, and that those who don’t sell will be undercut if the company gets enough units to sway a condo termination vote in its favor.

“I just bought the apartment to have an extra apartment. I didn’t know I would be thrown into this mess,” Weil said. “You can’t make this stuff up.”

A letter from the condo association’s lawyer said a plan of termination must be approved by at least 80% of unit owners. If 5% vote against the plan, it may not proceed for 24 months.

Weil said she’s heard no discussion of the potential for massive special assessments to comply with safety laws passed following the Surfside condominium collapse. In some cases, a condominium buyout is a bailout for owners on fixed incomes or who otherwise can’t afford to pay for the new mandates that require repairs be made and money set aside in reserves.

“I don’t think (Related) would have paid what they paid for my unit if they didn’t have enough votes,” Franco said. “In the end, I think this will benefit everyone.”

Still, Michael Gelfand, a West Palm Beach attorney who specializes in real estate and association law, said condominium buyouts can be stressful and a gamble that some people may lose.

“It’s like playing chicken with high-octane fuel,” Gelfand said. “If you wait too long to sell, you get smooshed.”
And Related Ross wasn’t the only suitor for Southbridge. Miami-based Fort Partners made a similar petition to buy out unit owners in September.

Fort Partners, which is known for developing Four Seasons resorts and residences, paid $20 million for two apartment complexes adjacent to and north of the Southbridge Condominiums in November. Combining the properties would give the company more than 2 acres with about 120 feet of waterfront on the east side of Flagler.

The Southbridge Condominiums alone has about 80 feet of waterfront east of Flagler.

“People moving to Florida want to be on the water,” said Douglas Elliman agent Randi Binder, who is listing a $1.1 million unit in the nearly 40-year-old Harbor Towers condominium north of Southbridge.