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Neighborhood dive: Boca Raton, no longer an IBM hub, attracts mixed-use development

March 2nd, 2018

For a good part of the 20th century, Boca Raton was the center of technological innovation.

In 1970, IBM completed its 620,000 square foot corporate headquarters and manufacturing plant, where the company built its reputation as the world’s computing giant. Over the next two decades, IBM’s main campus grew to span nearly 600 acres. After IBM closed the massive facility in 1996, the property changed hands three times. Today, the site still pays homage to its techie roots as the Boca Raton Innovation Campus.

Today, Boca Raton is divided into three submarkets: the northwest sector, midtown center area and downtown. Real estate brokers and developers in Boca Raton say there’s a new focus on creating more residential and commercial opportunities citywide. Boca’s city commission has made it easier by rezoning business park properties in the northwest sector to allow for residential, retail and hotel uses.

Signs of change

In 2015, as a result of the rezoning, two associations representing a consortium of 66 property owners rebranded the 750-acre Arvida Park of Commerce into the Park at Broken Sound. The redevelopment consists of 5.2 million square feet of office space plus 210,000 square feet with preliminary site approval; 554,000 square feet of commercial/retail space, plus 81,000 square feet with preliminary site approval; and three residential projects totaling 1,050 multifamily units.

Malcolm Butters, CEO of Coconut Creek-based Butters Construction, said the residential market has seen tremendous growth and will help fuel other real estate sectors, especially office. Butters purchased three office buildings in Boca over the past year. “We have seen positive absorption and rising rents,” Butters said. “There is no new office product, but the economy is nowhere near its peak. It will continue to grow.”

Transportation

Palm Beach County operates seven bus routes that serve Boca Raton. The city’s Yamato Road Tri-Rail Station offers free shuttle service to major destination points in Boca Raton, including the Park at Broken Sound, Town Center at Boca Raton, Florida Atlantic University and Lynn University.

Commercial broker’s take

“There are folks assembling properties and looking to next cycle from retail perspective. There is no vacant land that would accommodate mixed-use retail. When you find a property, the land price is pretty dramatic,” said Keith O’Donnell, principal with Avison Young.

Demographics

Population: 88,187
Median age: 46
Median income: $68,962
Average household net worth: $571,341

Most expensive residential sale

$11.5 million for a modern beachfront mansion with five bedrooms, six bathrooms, and three half bathrooms at 4523 South Ocean Beach

Most expensive home on the market

$29.5 million for a Mediterranean-style estate with nearly 20,000 square feet of living space, nine bedrooms, 10 bathrooms and six half-bathrooms at 3682 Northwest Princeton Place

Least expensive home on the market

$105,000 for a single-story house with two bedrooms and two bathrooms in a gated community at 6646 Northwest 26th Way

Residential price trends

Median sales price per square foot: $202, 7 percent higher than all of Palm Beach County

Decrease in average rent over the last year: 4 percent to $1,730

New developments

Last month, Elad Group began demolition work at 210 Southeast Mizner Boulevard and 398 Southeast Mizner Boulevard where the developer plans construction of an unnamed trio of nine-story condo buildings replacing the Mizner on the Green townhouse development.

Nearby, Penn-Florida Companies recently began clearing a site at 103 East Camino Real where the company plans to build the 12-story Mandarin Oriental Boca Raton hotel. The hotel is part of Via Mizner, a mixed-use project that will also include a 92-unit luxury tower, Residences at Mandarin Oriental Boca Raton. In October, the developer closed on nearly $400 million in financing for Via Mizner.

Meanwhile, CC Residential – a partnership between Armando Codina and Jim Carr, and New York-based Praedium Group – completed a 370-unit apartment complex called 850 Boca that’s the first residential project to go up at The Park at Broken Sound. The development, a mix of five-story buildings and two-story townhomes, sold in late December to AvalonBay Communities for $138 million.

850 Boca has 336 apartments that average 1,093 square feet with average rents of $2,170 or $1.99 per square foot. There are 34 townhomes that average 1,736 square feet with an average rent of $3,855 or $2.22 per square foot.

FCI Residential, the development arm of sugarcane giant Florida Crystals, announced plans for a $80 million rental complex in Boca’s downtown on the site of a now-shuttered shopping center. The two eight-story buildings will have 350 units, two parking garages and a public dog park.

And the Miami-based Related Group is trying to strike a deal with the city of Boca Raton that would allow the development company to build a mixed-use project on a 3.6-acre site in Mizner Park. Related would need to tear down a 15-year-old amphitheater to make way for the new development, which would consist of 300 to 400 residential units, plus restaurants and a parking garage. In exchange, Related is offering to build the city a new a 1,500-seat performing arts center and a parking garage.

Source: TheRealDeal

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