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Commercial Real Estate
Business Observer Friday, Nov. 23, 2018 2 weeks ago

Auteur developer believes new Sarasota condo project will be a work of art

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Despite heightened competition and economic trends, new tower slated to stand apart
by: Kevin McQuaid Commercial Real Estate Editor

Ascentia Development Group’s latest luxury condominium tower — planned for downtown Sarasota in the wake of successful projects on Longboat Key and Tampa — comes long into the economic growth cycle and amid heightened multifamily competition.

But Principal Jay Tallman, whose 18-story Auteur condo tower is being developed together with Githler Development President Charles Githler and company Senior Vice President Andy Dorr and Tampa philanthropist and hotel owner Dr. Kiran Patel as partners, is unfazed.

Tallman contends the 18-story Auteur’s superior design elements, waterfront views and downtown location, combined with macro-economic forces, will spell success for the $170 million project.

“I’ve found over the years that the number one contributing factor to value in condo projects is view,” says Tallman, 61. “There are a lot of new condo projects that have been proposed or are under construction, but very few of them have water views. We remain bullish on Sarasota’s ability to attract well-heeled buyers, and given our views, we think we’ll do well.”

Tallman acknowledges, though, that heightened competition among new residential towers in Sarasota and signs of economic slowdown will likely impact the 56-unit Auteur, a French term that refers to an author or director of a work of art.

“I think we’ll likely see some softening of sales, but because there are so few Class A waterfront properties, and given our development team, I think we’ll be fine. Slower absorption may occur, but we’re well-backed financially, and out site has no debt on it.”

Much of that confidence stems from the involvement of Patel, the owner of the Hyatt Regency Sarasota and dozens of other hotels nationwide and the former head of health care provider Well Care Management Group.

Patel acquired the Hyatt Regency Sarasota in 2016 in a $75 million deal.

Still, Auteur is coming to the fore at a time when more than a dozen other luxury or high-end condo projects are moving ahead.

Taken together, the Ritz-Carlton Residences, BLVD, Epoch, Strand, Mark and other projects under construction or nearly so will add more than 600 new condos to the city’s inventory, according to a review of city development documents.

At the same time, more than 1,000 new multifamily rental units have come online, or are preparing to, in the vicinity of Auteur’s 1.25-acre site adjacent to the 294-room Hyatt Regency Sarasota.

Apartment developers in Sarasota and elsewhere believe they will capture at least a slice of market share from more traditional condo projects by appealing to buyers or residents who want to experience the area without making such a huge investment.

Tallman counters that the price point of Auteur’s units — from roughly $2 million to $5 million — will be less likely to gravitate to an apartment or a condo lacking in views or amenities.

“We’ll be dealing with discriminating buyers, and so the developers that can check more boxes for them will be the ones to sustain themselves, and by that I mean projects that have more attractive amenities, floor plans, architecture and views,” he says.

Tallman says Auteur also will likely benefit from macro-economic changes that are spurring buyers to consider Florida from the likes of California, New Jersey, Massachusetts, Connecticut and New York — states whose higher tax rates came under a spotlight in the wake of the federal tax law change earlier this year.

At the same time, he notes that many high-end buyers today are making residential purchases with cash, even as lenders employ stricter underwriting criteria for debt that has tamped down much of the housing speculation of the past decade.

“We’re not in a bubble like we were in 2007,” says Tallman, who is in the final stages of selling seven-figure units in the 24-story Virage Bayshore condo tower in Tampa and who sold out a 16-unit project on Longboat Key known as Arai, with prices ranging from $3.6 million to $4.4 million, in 2014.

Jay Tallman, principal of Ascentia Development Group, says Auteur will offer water views and unit widths wider than most condos.

“The majority of the buyers we’re seeing in Tampa are cash buyers. So will we see some pull back eventually? Maybe. But we’re also not seeing the leverage and the speculation that were so much a part of the last cycle.”

Closer to Auteur, Tallman says the planned redevelopment of a 53-acre, city-owned tract just north of the project — today the home of the Van Wezel Performing Arts Hall — into open and recreational space known as The Bay will only help boost sales.

“It’s going to be very important,” Tallman says. “We’re going to have a parklike setting, with activities and events and an enhances bayou, right across the street from the project. I think Auteur will dovetail nicely with their first phase of redevelopment.”

Within the project itself, Tallman, designer Curts Gaines Hall Jones and interior designer ForrestPerkins have also made several adjustments that the developer believes will give Auteur an edge.

Chief among them is that the building has been angled so that more of its units will have full water views. The architects have also elevated the entrance to the building from the ground, much as was done with another Tallman luxury residential tower in Sarasota near the Hyatt Regency, Beau Ciel.

Tallman also trimmed the number of units in the project, from 84 originally to 56, in response to neighborhood concerns and focus group input.

Curts Gaines also has added width to each unit — to 75 feet — to add a feel more akin to a single-family home.

“To have a condo be 75 feet wide is unheard of,” Tallman says. “We think a lot of people moving from a single-family residence will find that appealing.”

Tallman says the Auteur development team hopes to break ground in the Fall of 2019, with completion slated for the end of 2022.

“We’re not in a bubble like we were in 2007. The majority of the buyers we’re seeing in Tampa are cash buyers. So will we see some pull back eventually? Maybe. But we’re also not seeing the leverage and the speculation that were so much a part of the last cycle.” — Jay Tallman, Ascentia Development Group

 

 

 

 

 

 

 

 

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