Heading northward: both prices and development in Miami Beach are heading northward, as South Beach's building boom begins to wind down, and attention shifts to North Beach

South Florida CEO, April, 2004 by Rochelle Broder-Singer

As little as a year ago, anyone would have said the real estate hot spot in Miami Beach was SoFi, the area of South Beach south of 5th Street that includes Southpointe. That was before Canyon Ranch came to North Beach. The world-famous Arizona spa announced it would open a location in Miami Beach, on a North Beach site that development firm WSG had originally set for an "ordinary" oceanfront condominium. Along with the resort and destination spa would be the first Canyon Ranch immersion-living community.

WSG had scored a major coup. Suddenly, people realized that the area between 60th and 79th Streets had some 2,400 condominium units planned or under construction, with more projects being announced every month. "Where the trendies wouldn't live at 67th and Collins before, now with Canyon Ranch they are buying," says Esslinger-Wooten-Maxwell master broker Kevin Tomlinson. "Celebrities are buying there. Millionaires are buying there."

"It's a phenomenal area to build in," says Eric Sheppard, one of two partners in WSG. "It's just been a resurgence in the past couple years."

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From BSG Development's intimate, 34-unit, 25-story 6000 Indian Creek on the Intracoastal to Merco Group International's 386-unit Akoya on the Atlantic Ocean, North Beach is filled with construction cranes. Part of the attraction two or three years ago, when many projects got their start, was the relative bargain North Beach offered. "Probably the most important factor is that you get to live on the ocean at a very reasonable price," says developer Frederic Karlton of Karlton Properties. Its project, The Collins, is set for completion this month and nearly sold out--at $310 to $315 per square foot. After starting a conversion of The Waverly in South Beach, Karlton says. "We felt that North Beach was going to be the next chapter for Miami Beach."

Those relative bargains are disappearing fast, especially with the arrival of Canyon Ranch Living, which is garnering prices from $500 to $1,200 per square foot. It will rise at 68th and Collins, on six acres of oceanfront at the site of the historic MiMo (Miami Modern) hotel The Carillon, currently an empty shell that will be preserved. With 151 condo-hotel suites and 467 condominium residences planned, the project will offer total immersion into the spa's wellness philosophy--from spa services and an indoor rock-climbing wall with an ocean view, to an on-staff nutritionist, physician and psychologist. The Canyon Ranch name has enough loyalty and visibility that 242 units were reserved before the sales center even opened, largely through a direct-mail campaign to past spa guests. Sheppard says that nearly 97 percent of buyers so far have been domestic. "There's been people from all over the country that never come to Miami," he says.

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While prices are rising, density restrictions and price points that are still better than South Beach have given developers the freedom to do projects such as BSG's Terra Beachside Villas--117 townhomes at 6000 Collins Ave., with a price range of $380,000 to $1 million. "Our thought was that we can develop a 1,500- to 2,000-square-foot product, outfit it with the highest-end finishes, price it competitively with ... single-family homes of the same size in Miami Beach--and have a better product," says BSG principal Ronald Bloomberg.

The same factors have allowed smaller developers to find profitable niches in North Beach, such as Coconut Grove-based The Berman Group's Bayside Homes on the water (which will start at $1 million), and the Linx and Bay Villas condominiums and townhomes, which will be in the $200,000 to $500,000 range. "Our target market is young families that are looking for city living and a quiet, secluded waterfront park area," says Berman partner Shellie Sims.

Further south on Collins, developer Craig Robins' Dacra Development has also targeted families with Aqua on Allison Island, which has garnered considerable national publicity. Aqua's 46 zero-lot-line single-family townhomes (priced from $1 million to $7 million) and 105 mid-rise condominiums (starting at $400,000) were designed by world-renowned architects such as Alison Spear, Elizabeth Plater-Zyberk and Walter Chatham.

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Also in that same neighborhood, Peebles Atlantic Developments' under-construction The Residences at the Bath Club is drawing prices in excess of $1,200 per square foot for its 120 condominiums and 6 oceanfront villas. Developer Don Peebles had vacation home buyers in mind when he purchased the historic Bath Club and decided to build a low density development on its 5.5 acres. While about 5.5 percent of buyers are purchasing second homes, the rest are empty nesters who plan to live full-time in the Bath Club's 2,000- to 8,000-square-foot units. The buyers, like those at Canyon Ranch and Aqua, are not looking for a riotous South Beach lifestyle. "Most people, when they cross that 40 or so age barrier, don't want to live in South Beach," he says.