North Florida Doctor Magazine

September 2004

What’s Behind the North Florida Condo Boom?

By SUSAN BURNELL

Owning a condominium home is becoming a more popular lifestyle choice, and it’s an investment you can enjoy while it’s earning money for you. Doctors around the First Coast are investing in upscale condominiums, using them as primary residences, second homes and investment properties. Heightened interest in condo properties has major builders adding multifamily residences to their product mix, many of them with a luxury amenities catering to busy professionals.

“If the pace of condo sales here continues, Jacksonville will close 35 percent more condos than last year,” says Kevin Cross, Strategic Marketing Manager for Centex Homes. “Owning a condo is a decision more doctors are making because of low interest rates, instability in the stock market, price appreciation in real estate and the low-maintenance condo lifestyle.”

“For me, it’s all about hassle-free living,” says John Soud, D.O. “A condo allows me to maximize my time away from work without having to spend time mowing, raking, and doing all the usual household maintenance." Soud, a physician with Jacksonville Emergency Consultants, chose an oceanfront condominium on Jacksonville Beach as his family’s primary home three years ago. The 28-unit, seven-story building offers covered parking, a pool, and panoramic ocean views.

“Just being at the beach, sitting out on the balcony or by the pool, or walking on the beach is very cathartic in terms of stress reduction,” says Soud. “Emergency medicine is not a typical nine-to-five job. We’re lucky if we get 10 minute breaks for food, and it’s high-energy, high-intensity work. So it’s nice to come home and have the beach right here. The condo lifestyle is great for business and social entertaining too. People seem to gravitate here for functions around the outdoor pool and deck, and it’s more attractive than being in someone’s back yard.”

“There are advantages to having a condo in a good location, especially near the water,” Soud continues. “It’s a more affordable way of having waterfront real estate. The appreciation on that piece of property makes it a very good investment, and you can get a greater return on your money than you would on a house that’s not on the water.”

Some people may have the misconception that condo living, because of its multifamily nature, may be noisier or less private than a single family home. “This is a far stretch from college apartment living,” Soud emphasizes. “Our neighbors are here for the same reasons we are, with the same desire for privacy and relaxation. We respect one another’s privacy and noisy neighbors have never been an issue.”

Along with colleague Ron Koury, D.O., Soud has also invested in Mira Vista, a Centex Homes condo property now under construction along the Intracoastal Waterway south of Atlantic Boulevard.

Koury, who works on staff at Memorial Hospital and Orange Park Medical Center as a member of Jacksonville Emergency Consultants, made his purchase at pre-construction rates and intends to use the property as an investment. The unit prices have already increased several times since he made his purchase. “There are probably six doctors in the practice who have bought or are about to buy condo properties,” says Koury. “My dad just bought an oceanfront condo at Pelican Point on Neptune Beach, and my mom just bought one in Crescent Beach.”

“Florida is an untapped market in terms of condo investment values,” Koury says. “I grew up here, and up until about ten years ago, there were really no condos. But what I’ve seen is a lot of people from up north and out west realized they could get a condo for half of what they would pay in South Florida. Now we’re seeing condos at the beach, on the Intracoastal, and on the Ortega and St. Johns rivers. Some of those are older buildings being gutted and converted to condos. All of a sudden the condo market has really taken off.”

The three-story Mira Vista is being built where Hurricane Hattie’s restaurant formerly stood. Its biggest selling point for Koury was its boat slips for residents. “This is the closest condo to the mouth of the St. Johns River, and it’s the only condo in the area with a place for your boat.” he explains. “If you’re into deep sea fishing, you can get to Mayport and then out to the ocean easily. And if you have a boat, you probably know that most of the marinas in the area have 100- percent occupancy with waiting lists.”

Other amenities of the three-story property include Mediterranean architecture with tile roofs, and common areas including clubhouse and pool. from here. Its location on the west side of the Intracoastal will afford residents sunrise views.

“Having a place to keep a boat is one of the big selling points of waterfront condominium communities,” says Mike Bugg, president of Lifestyles Realtors, which sells and markets condominium properties and lofts as well as single-family homes. “We’ve been selling condos at a rate of more than 100 a month, and condo resales are turning around in 45 days. It’s the first time in history that multifamily homes have sold faster than single family homes.”

“We’re seeing a lot of people make the lifestyle choice from house to carefree condo living,” Bugg explains. “Values have changed. Many people don’t want to be burdened with a yard and the maintenance that goes with it. There’s also a security factor. With a condo, you can lock it and leave it. Many of the communities are gated, and they’re less exposed than a single family home.”

“Doctors and most other investors are taking advantage of interest-only loans while they last,” says Bugg. “For example, we’re seeing doctors from Atlanta buy condos in Jacksonville, planning to move here when they retire. Their investment provides a positive cash flow.” Lifestyles Realtors is also finding a ready market for condo properties among young professionals, especially singles, who would rather buy than rent. “People are remaining single longer, and they can live in a condo or loft for less.”

Some of the hottest amenities include doormen and concierge services, just like fine hotels provide. Media rooms with theater-style seating are popular too. “One community even offers a towel service by the pool,” says Bugg. “And high speed Internet access is pretty standard everywhere now.”

Proximity to St. Vincent’s Medical Center is a big selling point for physicians who have purchased condos or townhomes at VillaRiva, says Bryan Weber, managing director of Flagship Communities, LLC. So are the luxurious floor plans – up to 3,500 square feet, with penthouses even larger. The elegant gated community is slated for completion by May 2005 and features a 13-story, 66-unit tower overlooking the St. Johns River and six low-rise residential townhomes fronting Riverside Avenue.

Flagship specializes in luxury condominium communities, and has collaborated on the finance and development of several award-winning waterfront communities including The Ocean Villas at Serenata Beach in South Ponte Vedra Beach. “Condos have become an appealing real estate investment not only for doctors but for the population in general,” says Weber. “We’ve seen many physicians and medical industry executives purchase our properties over the last few years. One reason is that the condo lifestyle, particularly in Florida, is very accepted and appealing. As an investment, condo properties have built-in appreciation, based on material cost increases alone. The last 12 months have become even more heated in regards to material costs, so that becomes even more of a factor driving buyers to purchase now rather than wait.”

“We see condo sales in Jacksonville looking very successful across all price points, with national builders building moderately priced communities from the $150s to the $300s,” says Weber. “There’s room for high-end properties too – VillaRiva homes sell for between $800,000 to over $2 million. We have already sold out two-thirds of the 66 tower condominium in 14 months,” says Weber. “That’s nearly $40 million worth of real estate, and we’re well on the way to selling out by the time we open.”

VillaRiva’s amenities include expansive river views, an owners lounge, an 800-square-foot fitness center, board rooms for business meetings, concierge service, his-and-hers saunas, a heated lap pool and secured garage parking. Each condo home is wired with state-of-the-art cabling for high-speed Internet access.

“We have very stringent rental restrictions,” says Weber. “Most of our buyers purchase their homes to live in as their primary or secondary residence. But we also have buyers across all industry groups who are buying in as an investment in their portfolio. When they close on the condo they will turn around and list it for resale. In an attractive area like Northeast Florida, where the prices of real estate continue to grow, that is a viable thing to do.”

Soud especially appreciates the investment advantages of his condo investments. “I know my investment here has accrued more equity in last three years than I could have made in the stock market. If you have the ability and opportunity to invest in condo property, specifically on a waterfront or on the Intracoastal, I’d recommend it. Your return on investment accrues faster than almost anything you can find in the stock market or mutual funds. Plus, it’s an investment you can use day to day – while you’re having fun it’s making money for you.”