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New, high-priced West Palm Beach apartments test range for rents

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West Palm Beach landlords are testing the depth of demand for units with monthly rents in the $3,000 to $4,000 range.

A new generation of apartment buildings in downtown West Palm Beach is changing the city’s skyline and — with two-bedroom units asking more than $3,000 a month — reshaping expectations about how much tenants are willing to pay for rent.

More than 1,000 new apartments have come on the market, and 251 additional units are under construction. Landlords now are testing the depth of demand for premium units with monthly rents in the $3,000 to $4,000 range.

“We think they’re a little high,” said Dan Gallien, owner of Rent 1 Sale 1 Realty, a Royal Palm Beach-based brokerage that has represented numerous tenants in downtown West Palm Beach buildings. “Actually, a lot high.”

At Park-Line, the tower near the Brightline train station, fully 54 percent of the building’s 290 units have been leased, the landlord says. One-bedroom units go for $2,100, and some two-bedroom apartments are priced at as much as $3,258 a month.

That’s in line with the asking rents at other new buildings downtown. At Broadstone City Center, units rent for as much as $2,870 for a two-bedroom, 1,086-square-foot apartment.

At The Alexander, prime two-bedroom units with 1,693 square feet of space go for $3,995 a month. The building touts 12-foot ceilings and ocean views from some apartments.

Spending $40,000 a year on rent once seemed a financially foolish strategy. However, in a trend that has grabbed the attention of apartment developers, affluent Americans have cooled a bit on homeownership.

The U.S. homeownership rate was 64.2 percent in the first quarter of 2019, well below the record high of 69.2 percent set in 2004. Many real estate experts say millennials will prove less likely to buy homes than their baby boomer parents, who believed that paying a landlord was akin to throwing away money.

“Renting is a good thing now,” Gallien says.

Even so, downtown West Palm Beach’s apartment boom strikes some developers as a bit too much of a good thing, at least for now. While 251 new rental units are under construction at the site of the former City Hall, four other apartment projects that have been approved remain on hold.

Billionaire developer Jeff Greene in 2017 won city approval to build 348 “micro unit” apartments downtown. However, fearing a glut of new apartments, Greene since said he has decided not to move forward with the project, known as Banyan Place. Greene also shelved Clematis Place, a project slated for 169 apartment units.

Also approved but not under construction are a second phase of Loftin Place and the 400 units planned for the Transit Village project.

In a building spree that is reshaping downtown, 1,069 new units have been completed, 251 units are under construction and 1,110 more have been proposed:

Bargain hunters in search of a tenant’s market might be disappointed, Gallien said. While home sellers consider a listing price a starting point for negotiations, multifamily leasing offices tend to stick to their published rental rates.

“Generally, you’re not negotiating a price with an apartment landlord,” Gallien said.

Even if apartment demand proves a bit soft for now, there are signs that downtown soon could have more workers eager to rent downtown apartments. Next door to Park-Line is the site of 360 Rosemary, a 300,000-square-foot office building scheduled for completion in 2021.

A few blocks away, Greene has broken ground on One West Palm, a development that will include 200,000 square feet of office space. Despite making a big bet on demand for downtown office space, Greene also has complained about what he considers West Palm Beach’s less-than-robust labor market.

“We don’t have that dynamic economy with high wages that other places have,” Greene said in December.

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West Palm man, 58, dies from injuries in motorized bike crash

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The wreck took place in May in Lake Park, the Palm Beach County Sheriff’s Office said.

LAKE PARK — A 58-year-old West Palm Beach man is dead after his motorized bicycle crashed with a car in Lake Park, throwing him to the ground, the Palm Beach County Sheriff’s Office said.

Steven Kinnersley sustained a head injury in the May 13 crash on Greenbriar Court, just east of 10th Street, the sheriff’s office said. Palm Beach County Fire Rescue took him to St. Mary’s Medical Center in West Palm Beach, and he died from his injuries Thursday night at the Trustbridge care center in West Palm Beach.

Just before 9 a.m. May 13, Winner Duversot of Palm Beach Gardens was eastbound in a 2005 Nissan Pathfinder on Greenbriar Court, the sheriff’s office said in a report released Monday. It said Kinnersley rode through a stop sign, then missed the “no right turn” sign and traveled westbound, the wrong way, on Greenbriar.

Duversot’s front bumper crashed into Kinnersley, according to the report. As of Monday, there was no record either of charges or traffic tickets against him.

Reached by telephone Monday, Duversot, 19, said Kinnersley came out of nowhere. He said he was on his way home to get something for school when Kinnersley’s bike crashed into his car.

“I was shocked,” he said. “I was like, ‘Where did he come from?’ ”

Duversot said he did not sustain injuries and that his Nissan Pathfinder’s front mirror was cracked.

Attempts to reach Kinnersley’s family Monday were unsuccessful.

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Cottonwood Residential buys Luma West Palm apartments

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South Florida developer Charles Scardina Jr. sold a new apartment complex to a Salt Lake City firm for nearly $67 million.

Scardina’s Luma at West Palm Beach LLC sold Luma West Palm Apartments at 7130 Okeechobee Boulevard to CC West Palm Beach LLC, which is tied to Cottonwood Residential.

The deal breaks down to about $273,000 per apartment. Luma was built on a 10.2-acre site west of the Florida Turnpike in 2018. Florida Community Bank provided the $35.6 million construction loan for the project.

Cottonwood Communities, a real estate investment trust, announced the deal was under contract in April. The development includes a heated pool with cabanas, fitness center, 5,500-square-foot clubroom, business center and dog park. The units range from one- to three-bedrooms averaging 1,122 square feet.

In August, Cottonwood launched a $750 million offering to invest in multifamily properties throughout the U.S., according to a release. As of February, it has raised $9.4 million in investor equity.

The REIT cited strong employment in West Palm Beach as part of its decision to acquire Luma. Major employers in the area include Florida Power & Light, the Scripps and Max Planck Research Institutes, and United Technologies.

Related Group’s chairman and CEO Jorge Pérez recently said he plans to use the Opportunity Zones tax break to build market-rate apartments in West Palm Beach.

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