Here's a sign that better times are back: A Boston-based developer is building condos in Cape Coral.
You read that right.
Few areas of the country epitomized the collapse of the residential real estate market more than Cape Coral. In fact, the city was home to the biggest foreclosure anywhere on the Gulf Coast, from Tampa to Naples: the monster $340 million foreclosure of Tarpon Point, a condo complex in south Cape Coral.
Pasquale Franchi, whose Franchi Management in Boston has 1,100 apartments and 500,000 square feet of commercial space, bought a failed development in Cape Coral called Island Pines for $5.2 million. The 30-acre project is located near the intersection of Pine Island Road and Hancock Creek South.
Seven condo buildings are now under construction there, with two ready by January at the development that's been renamed Casa di Fiori. The previous developer, Brixton Development, had built some of the condos before a bank foreclosed on the property during the bust, and Franchi has already sold more than half of the existing 28 units this year.
Like so many others, Island Pines collapsed as speculators fled the market in 2006 and 2007. “It was 80% sold with prices up to $350,000 and not a single one closed,” says Bjarni Jonsson, the development's general manager.
Today, the condo units cost from $119,900 to $140,000 and the buyers are people who intend to live there. “We had two families move in this weekend,” Jonsson says.
Data from the Realtor Association of Greater Fort Myers and the Beach confirms the market is improving. For the year to date through October, 3,346 condos and townhomes have been sold in Cape Coral, an 18% increase over the same period last year. The median price has risen 23% to $111,00 over that same period. Meanwhile, the inventory has dropped 10% to 2,343.
At Tarpon Point, there are just 20 condos remaining to be sold. “We've sold 39 condos since February with three price increases,” says Lauren Hagan, broker for Tarpon Point Realty. Prices now range from $451,000 to $650,000 at the luxury waterfront development.
Still, banks haven't warmed to condo loans yet. To overcome this, Casa di Fiori is providing financing to buyers. In addition, Casa di Fiori will lease a condo to a new buyer for one year with the option to buy, helping those with less-than-perfect credit improve their financial standing. “We recognized the market conditions,” says Jonsson.
Condo construction loans are nonexistent, too. Franchi acquired the property with cash and is spending an additional undisclosed sum of cash for the new construction, amenities and landscaping.
Jim Schuetz, Casa di Fiori's sales and marketing manager, doesn't shy away from telling the development's story of foreclosure. His pitch: You can now buy a condo for $120,000 that someone offered to pay $350,000 during the boom.
Schuetz says buyers today ask all the right questions, even complex ones such as whether the developer acquired the property using leverage. “That's very sophisticated,” says Schuetz, who with Jonsson is a veteran of the luxury Vineyards development in Naples.
Once completed, Casa di Fiori will have 296 condos in 22 two-story buildings. “What's out there is old and beat up,” says Schuetz, who is expecting to sell out the development within three to four years. “We're right on the cusp of greatness,” he says with a booming laugh.