🍊Fresh-Squeezed Condos

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Happy Saturday Highest & Best! And welcome to the new subscribers who’ve arrived through my story in the New York Post last weekend, which I'll cite from below. Here’s the rundown for today:

🫠 Florida condo market braces for a crisis
📈 There’s never been this many Florida homes for sale
😁 ‘Big Money Baller Street’ ?
🌴 ServiceNow considers Florida soon
📚 A new school with that shopping center?

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Let’s get to it!

Florida’s Condo Market Braces for a Costly Crisis

A slow-motion crisis is unfolding in Florida’s condo market, threatening to upend the state’s image as a haven for retirees and reasonably priced beach living.

Owners of the state’s older condos are bracing for steep special assessments, while racing to sell their homes and receiving only tepid buyer response.

Amid a property market that’s still vibrant for nearly every other segment, Florida’s aging condominiums are losing value. And nearly 1,400 buildings are now blacklisted from receiving mortgage financing, making those apartments an even-tougher sell.

At the heart of this turmoil is a basic reality: Florida’s aging condo buildings desperately need repairs, and state officials are forcing them to assess (and pay for) those long-overdue upgrades.

Under a law enacted after the tragic 2021 collapse of Champlain Towers South in Surfside, which saw 98 people lose their lives, condo boards may no longer defer major structural improvements to another day — or decade. The “Building Safety Act” required every condo tower in Florida aged 30 years or older to complete a structural integrity study by the end of 2024, to get a full grasp of what problems need fixing.

This year, the tab for those repairs comes due. Condo boards must now set aside funds to fix the issues found in those studies — from concrete restoration to balcony overhauls. And the assessments on individual condo owners are looking both pricey and unsettling.

“You’re going to see a massive reduction in the value of these buildings based on these giant special assessments and the work that has to be done,” said Orest Tomaselli, CEO of Strategic Inspections, which advises condo boards nationally on how to shore up their reserves.

In Florida buildings he’s worked with, Tomaselli has seen special assessments as low as $250 per month, to a property that levied $2,500 per month, per unit owner, for a three-year stretch.

Fore more details, see my NY Post story, “Inside Florida’s brewing condo crisis”

⏪ Catch up on recent Highest & Best issues:

• Closing Time, February 15, 2025

• Beach Bummer, February 9, 2025

• Lease and Desist!, February 1, 2025

• The Roaring Renties, January 25, 2025

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Florida’s Housing Inventory Hits Highest Level on Record

A surge of condo listings flooding the market across Florida just pushed the state to a new and dubious milestone: the highest number of homes for sale on record.

Statewide housing inventory jumped 23% in January over a year earlier, bringing total listings to 172,209—the most ever recorded in monthly data dating back to 2012, according to brokerage Redfin.

Condo inventory led the charge, hitting an all-time high as owners looked to sell in response to rising HOA fees driven by new safety regulations (see above). Meanwhile, single-family home inventory was just shy of its own record, adding to the growing pile of available properties.

And pending sales in Florida dropped 9.3% in January, further swelling the inventory, Redfin said.

But not every market shares the same overhang. Here’s a look at the Florida locales where active listings—the total number of homes for sale during the month—climbed the most in January:

Big Money Baller Street? Not This Time, Miami

It was a disappointing week for anyone in Miami who’s dreamed of having an address on ‘Big Money Baller Street.’ Same for those who’d hoped to direct their GPS toward ‘Grind With Me Terrace.’

Those were among the new names proposed for a series of streets and avenues in the the Liberty City neighborhood, in homage to rap and hop-hop songs by Miami artists who’ve made it big.

“If you’re from Miami, you know these famous songs and these sayings,” said Miami-Dade County Commissioner Keon Hardemon, who sponsored the resolution for street name changes, according to the Miami Herald.

Hardemon saw the new names as the final touch to a broader revitalization effort, including landscaping, traffic circles, and improved lighting.

But his plan hit a roadblock with a 5-5 vote, falling short of approval to rebrand two dozen streets. Opponents argued that the last-minute pitch gave property owners no say in whether—or how—their addresses would change.

So for now, “Chase Dis Money Street,” ‘It’s Ya Birthday Street,” and “We the Best Terrace,” are on hold.

But the proposal will get another chance on March 18, when commissioners will reconsider it in the presence of three members who missed the fist vote.

ServiceNow Eyes Florida Soon

Silicon Valley software firm ServiceNow NOW ( ▼ 1.9% ) is planning a major expansion in West Palm Beach and has explored relocating its headquarters from California, Bloomberg News reported.

“A range of potential expansion opportunities,” was how a spokesperson for the 26,000-employee firm described its designs on West Palm Beach, the South Florida city that’s become known as ‘Wall Street South’ for its appeal to large financial firms.

ServiceNow, a software firm specializing in business automation and IT management, plans to relocate hundreds of employees to Florida initially, with long-term hiring expected to reach the thousands, Bloomberg reported. Its headquarters may remain in Santa Clara, California, but the firm has discussed “basing a substantial portion of our Americas operations” in West Palm Beach.

The arrival of a major tech firm could be another milestone for West Palm, the Florida city that’s undergone one of the most dramatic post-COVID transformations, and is emerging as a co-mecca for the nation’s wealth. The news also comes as Vanderbilt University moves forward with plans for a new graduate school campus in the city, specializing in business, finance, AI, and computer science.

Building Office Towers? Don’t Forget the Schools

You can build all the gleaming office towers and luxury condos you want, but if your well-heeled tenants and buyers don’t have a place to send their kids to school, you’re only halfway there.

Developer Stephen Ross knows this—and that’s why he’s adding a private school to his ever-growing real estate empire in Palm Beach County.

Ross —the billionaire owner of the Miami Dolphins and CEO of Florida-centric real estate firm Related Ross — is teaming up with school operator ElevateED to open a (not-for-profit) K-12 school on a prime 70-acre lot in Wellington. Half of the land will go to the school, while the other half, naturally, will be transformed into a shopping center, residences, and a hotel, Bloomberg News reported.

“You won’t get people to move if you don’t have great schools,” Ross said at the iConnections Global Alts conference in Miami Beach, according to Bloomberg.

Wellington, known for its equestrian scene and general abundance of wealth, agreed to sell the land to Ross and the school for a combined $47 million. Related will pay $31 million for its portion, with plans to build up to 150,000 square feet of retail and restaurants, up to 500 residences, and a hotel.

The school, meanwhile, bought its slice for $16 million, aiming to open its doors in about three years—just in time for a fresh wave of finance and tech transplants to start planning their children’s Ivy League prep.

That’s it for today!

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