Downtown St. Pete market ripe for 41-story condo tower project
By Ashley Gurbal Kritzer
Tampa Bay Business Journal
Published: Sep 18, 2014

A South Florida developer's plans for a new luxury tower in downtown St. Petersburg are ambitious and market data suggests the time is ripe for such a project.

The Kolter Group, based in West Palm Beach, is planning a 41-story tower that would include 253 condominium units and a 13-story hotel with 173 rooms on Second Street North, across the street from Jannus Landing, said Brian Van Slyke, an executive with Kolter who's overseeing the project.

Kolter acquired the property in July for more than $17 million. The Edwards Group, who had purchased it in April and flipped it for a seven-figure profit, was the seller.

The construction costs are pegged at $120 million. Van Slyke said Kolter, which filed its initial site plan with the city this week, hasn't yet released condo prices. Condominium buildings typically break ground after about half of the units are presold, and Van Slyke said Kolter would open a sales office in early 2015, once the city signs off on its plans.

"There's not a firm percentage that's been established, but we do want to get a certain level of pre-sale reservations before we go vertical,” Van Slyke said. Data from the Multiple Listing Service shows that prices of luxury condos has risen over the past two years. For units priced between $750,000 and $1 million, the average price per square foot in August was $546, up from $406 per square foot in August 2013 and $325 per square foot in August 2012.

Three condos in that price point were sold in August, and 15 were on the market, meaning there's less than a six month supply of inventory. Months' supply of inventory is a real estate metric that measures how long it would take for the number of units on the market to sell at the current sales rate. Less than a four-to-six-month supply is considered a seller's market.

"We see a very robust market for downtown condos in St Petersburg at this time,” said Charles Richardson, Coldwell Banker Residential Real Estate's regional senior vice president for west central Florida. "The price per square foot has come up considerably over the past two years,” he said.

Van Slyke said that dynamic - and its success in other parts of the Tampa Bay region - is what attracted them to the site. Kolter is also under construction on Water Club at Snell Island, a waterfront condo development in north St. Petersburg, and the Vue in Sarasota Bay.

"If you look at the current condo availabilities, it's very low,” Van Slyke said, "and when condos come on the market they're absorbed very quickly.”

The average square footage of the units is between 1,800 and 1,900 square feet, and Van Slyke said about 25 percent of the units will be three bedrooms. As is typically the case, buyers will need to place a 20 percent deposit on units. Van Slyke said Kolter anticipates many buyers will pay cash, which is common in high end residential real estate.

"We tried to do a varied style of floor plans to attract a broader segment of the market place,” he said.

Ashley Gurbal Kritzer is a reporter for the Tampa Bay Business Journal.