How hot is the residential real estate market in parts of western Palm Beach County?
Hot enough that builders are seeking zoning changes to permit them to abandon already approved commercial projects and convert them into high-density residential developments with limited commercial parts.
Jesse Saginor, a Florida Atlantic University professor who monitors real estate trends in South Florida, said the shift shows that builders can get a greater return on their investment by going residential. There is not much of a wait to find buyers, regardless of the price point, for new homes in Palm Beach County, he noted.
The latest example involves the vacant northwest corner of Hypoluxo and Lyons roads in suburban Lake Worth. It may soon be the site of Windsor Place, a 393-unit development that calls for 157 townhomes, 236 rental units and 30,192 square feet of commercial space, including a grocery store and a drive-through restaurant.
In 2005, previous owners obtained approval for 115,078 square feet of commercial space that included a 41,000-square-foot anchor store along with 184 townhouses. The new proposal seeks to more than double the number of residential units and represents a significant decrease in the amount of commercial space.
The parcel is one of the last remaining, sizeable, undeveloped tracts west of Lake Worth Beach.
The development company behind the project is Hatzlacha WP Holdings, founded by Charles M. Scardina, once a senior vice president of Ansca Homes. Scardina was involved in a lengthy legal battle with his former partners, which settled in late 2017. Shortly after that, he bought the 40-acre parcel for $15.2 million.
But Scardina now says in a report filed with the county that the initial plan will result in “an improper use of the site” as there is too much other commercial development in the area. The report noted the changes were necessary because the original project “too closely mirrored” the adjacent Town Commons shopping center on the east side of Lyons Road.
Earlier this year, another company owned by Scardina made similar arguments for his Terra Nova project at Hagen Ranch Road and Atlantic Avenue west of Delray Beach.
Scardina’s Principal Development Group proposed a change from a mostly commercial project to one with 275 rental units and a drive-through restaurant. A group of area homeowner associations banded together to create the Common Sense Development Coalition to fight the plan on the grounds that the residential density is too intense. Scardina is working with coalition members to see if he can address their concerns.
And recently, another commercially approved project at Jog Road and Boynton Beach Boulevard is undergoing a change as the new owners seek permission to build an assisted living facility, which will reduce land devoted to commercial uses by 4 acres.
Residential builder Alex Akel said there is little land left in Palm Beach County to build homes. He said it is possible that residential builders may even buy up existing shopping centers and convert them into projects that would include housing.
Much has been written about how the tax law changes have fueled a luxury-home boom in South Florida but Saginor said the impact has been felt across all price points. Saginor of FAU said there is just as much a demand for homes between $300,000 and $800,000 as there are for luxury homes.
Additionally, with the rise of online shopping, brick and mortar stores are in decline. Strip center stalwarts Toys R Us and Sports Authority are gone. Booksellers, video stores and record shops are nearly extinct. Macy’s, Sears, JCPenney and Office Depot are shrinking.
Copyright © 2019 The Palm Beach Post (West Palm Beach, Fla.), Mike Diamond, Special to The Palm Beach Post. Distributed by Tribune Content Agency, LLC.