The first time I saw an alligator in the wild, I was jet-skiing in the still black waters of Florida’s St. Johns River, a marshy maze of interconnected waterways somewhere between Orlando and Cape Canaveral. We pulled into a small cove, and less than 10 feet away sat a pair of gators lazily lounging in the swamp and sunning themselves. They looked almost, well, peaceful. They’re not. The alligator’s true nature—as a number of Discovery Channel documentaries and countless YouTube videos can attest—is a vicious, merciless one.
I loathe to say it, but they sometimes remind me of condo developers. This rare breed of real estate executive is skilled at lurking in the shadows, holding out for the right time to pounce. And it seems that every decade, they come out to feed, wreak some havoc, and then sulk away to await the next round.
In the 2000s, however, the prey was far too plentiful—overleveraged investors, aggressive lenders, and unprepared first-time buyers offered countless opportunities for the quick development and turnaround of projects. So naturally, condo developers swarmed into major metros across the country, building tower after tower of high-end, for-sale properties with amenities that rivaled the most luxurious hotels in the world. Florida—and Miami, in particular—is considered the poster child for this proliferation. Today, you can walk certain streets in Miami, look in both directions, and see nothing but for-sale multifamily high-rises.
Unfortunately, the buyers for those units never came. Instead, the recession showed up. Along with the finger-pointing. And condo developers were blasted as the most mercenary of the housing industry bunch, willing to do just about anything to make a buck. As a result, over the past year-and-a-half, most condo developers have slithered away, leaving behind dozens of abandoned, distressed, partially built, and/or mostly unsold projects.
Consider the tale of one buyer, who purchased a unit in Fort Myers’ Oasis I condo community developed by The Related Group and is now living there with his family—completely alone. None of the other buyers at the property who were able to close on their deals have moved in, and this particular resident—a New Jersey firefighter—couldn’t swap units and move to another building. Now, the family walks the spooky, deserted corridors alone during the day while intruders try to squat in the otherwise vacant property at night.
Unlike many other condo developers, Miami-based Related isn’t ignoring the problems. The firm, along with a few others, is assessing its damages and developing pointed strategies for turnarounds. In “Sunshine Sorrows” (on page 32), our senior editor Les Shaver outlines strategies employed by Related, Boca Raton, Fla.-based The Altman Cos., and Atlanta-based Wood Partners to learn how they plan to dig their way out of the swamp. I will be curious to see if the actions of these few forward-thinking developers are enough to redeem the reputations of condo developers throughout the Sunshine State.
The other day, I was talking to a friend about Florida, and he randomly mentioned how much he hates the alligators that seem to run rampant there. “They’re prehistoric and primal, with their death spirals and impenetrable skulls,” he said. “Be afraid, be very afraid. They are freaks of nature.”
Let’s hope the same won’t be said of Florida condo developers.
—Shabnam Mogharabi, Editor