Aging beachfront units in Ocean Ridge sold for $29 million. Now they're slated for demolition.
An Ohio-based developer paid a bullish $29 million for 22 worn studio and one-bedroom apartments in the Town of Ocean Ridge — an investment of more than $1.3 million each for the 60-year-old units.
But it wasn’t the structures that an affiliate of the Edwards Companies was interested in, it was the unobstructed view of azure water steps from the tony Ocean Club of Florida and in an affluent enclave short on beachfront land.
For the owners of the units at 6855 N. Ocean Blvd., which is technically a cooperative, the sale was a chance to escape expensive fixes to buildings eroded by saltwater breezes and ocean maelstroms since 1962, said Brad Capas, executive director of Cushman & Wakefield, which managed the sale.
“The owners elected to sell rather than try to invest significant capital to deal with structural deficiencies,” Capas said. “I gather they had gotten some unsolicited interest from developers.”
Edwards Companies, which closed on the units Oct. 18 under a limited liability corporation named Edwards Ocean Ridge, is also developing Atlantic Crossing in Delray Beach. The mixed-use project will have offices, shops, and condominiums according to the company’s website.
Edwards Companies did not return a request for comment about the Ocean Ridge purchase. Capas said no one lived full-time in the Ocean Ridge units, making the sale easier than dealing with homesteaded condominiums where residents have to find other places to live.
The Ocean Ridge complex is a co-op in which people don't own their unit
The 6855 N. Ocean complex is a cooperative in which people didn’t own their unit. Instead, they owned a percentage of stock in a non-profit corporation that owned the land and buildings.
It was a concept popular in the 1960s that is rarely used today.
Gary Mahler, vice president of the corporation, said there were five offers made on the property. He said most owners used the units for family and friends who would visit or rented them out seasonally.
"Bottom line, the building was deteriorating and we were going to have to put a lot of money in to fix it or we could take advantage of the hot market," Mahler said. "This was the best option for our shareholders."
Plans for the 2.1 acres of oceanfront land south of the Boynton Inlet include 16 to 20 luxury condominiums, Capas said. Ocean Ridge building codes allow for up to four stories on the property.
“Anything waterfront is coveted, and Ocean Ridge has a great small-town feel,” said Christian Prakas, CEO and broker of Prakas Luxury Real Estate in Delray Beach. “There’s no commercial space, less traffic, and it’s close to Delray Beach and Palm Beach but you’re not paying Palm Beach prices.”
Ocean Ridge is bordered by the Town of Gulf Stream to the south and the Town of Manalapan to the north. In marketing 6855 N. Ocean, Capas noted that the three communities combined are home to one of the largest concentrations of wealth in Palm Beach County.
A company linked to billionaire Larry Ellison of Oracle Corp. bought a Manalapan estate in June for $173 million, which set a new record for the most expensive residential property to change hands in Florida. In March, a $33 million sale of an oceanfront home in Gulf Stream was also record-setting for the town.
The town’s website says it has about 1,675 year-round residents and 1,000 seasonal residents. Limited vacant land and strict building codes mean there’s little new construction, Prakas said.
“So, when people do see something new going up that they can purchase without going through the permitting process, it’s definitely appealing,” Prakas said.
The June 2021 collapse of the Champlain Towers South in Surfside increased scrutiny of the necessary maintenance and repairs on multi-story buildings.
The sale of 6855 N. Ocean is part of a bigger trend stimulated by the desirability of oceanfront land, a hot market, and, indirectly, a result of the awareness from Surfside that older buildings have some “pretty significant assessments coming” Capas said.
A new condo law approved during a special legislative session in May is expected to increase costs for owners. Most safety provisions do not kick in, however, until late 2024. The law requires maintenance accountability measures on older condos three stories or higher, such as engineering inspections and dedicated reserves to pay for fixes.
The units at 6855 N. Ocean Blvd. are two stories, thus exempt from some of the new rules. But West Palm Beach attorney Michael Gelfand, who served on the Condominium Law and Policy Life Safety Advisory Task Force set up after the Surfside collapse, said the units would be held accountable for the section in the law that forbids condo and co-op boards from reducing maintenance reserves or using them for other purposes.
Gelfand said he expects to see an increase in condo terminations — where an entire building is sold, usually to a developer — following the law's full implementation in two years. The summer of 2024 will be an eye-opener for many condo owners, he said.
“That is when folks will start to realize there is a bill coming due for all the deferred maintenance and repairs,” Gelfand said. “No one is really educating unit owners as to what needs to be done. At the last minute the bill will drop on everyone’s desk and people will start screaming.”