South Florida Dirt: Cracks in South Florida Real Estate Market

It’s not an easy time to be a developer, even in South Florida, one of the stronger real estate markets in the country. 

Over the past week, we reported on the challenges facing developer Alirio Torrealba, who is at the center of more than a dozen lawsuits from lenders; the Magic City’s sinking skyline; the oversaturated branded condo pipeline (at least 15,000 units underway); and the death of a nearly $200 million condo buyout deal in West Palm Beach. 

Torrealba, founder and CEO of MG Developer, is fighting to hang onto some properties, while admitting defeat on others (he hired brokers to list other sites in Miami). As interest rates rose, an oversupply of apartments slowed leasing and forced a drop in rents. That affected his ability to raise money, and he failed to line up new debt. Torrealba was the victim of bad timing, a lesson many developers have learned during Miami’s busts. But he’s not giving up, and Torrealba has the support of a number of developers who have called or texted him, offering words of encouragement and welcoming him to “the club” of South Florida development. 

Farther north, Orlando developer Chuck Whittall’s firm canceled its contract for a nearly $200 million buyout of a waterfront co-op building in West Palm Beach. Whittall, founder and CEO of Unicorp National Developments, terminated the contract for the 140-unit La Fontana at 2800 North Flagler Drive, on the eve of his deposit becoming non-refundable, according to sources. He sought an extension on the deal. Another buyer will likely step in, but the co-op board will have to start the notoriously challenging process all over again. 

We also analyzed the branded condo market. Across South Florida, 66 branded projects are planned, under construction or recently completed. All developers I spoke to agreed: the market is oversaturated, with roughly 40 brands in the mix. (Check out a map of the projects here.) 

Hospitality branded projects are typically the easiest sell, because buyers can physically test out the brand. But there are only so many hospitality brands to pick from, although more announcements are expected this year. So developers have branched outside the box, tapping fashion brands, luxury car makers, and even watch brands. 

As developer Bippy Siegel put it, “the market has been polluted by brands that don’t have soul.” 

Speaking of condo towers… A new report that follows up on research released last year shows new luxury high-rises are settling at uneven rates, which could lead to long-term structural damage and increased maintenance and insurance costs. This is called differential settlement, which leads to tilting buildings that often result in major structural issues — think cracked pipes and facades, uneven driveways and warped floors. 

The new research said this can affect neighboring buildings as well, and experts suggest that government officials reexamine the current high-rise permitting process and consider implementing a moratorium on narrow high-rises. 

What we’re thinking about: When is someone, anyone, at Miami Freedom Park or the city of Miami going to do about the millions of dollars worth of unpaid work by subcontractors? How does this story end? Send me a note at kk@therealdeal.com. 

CLOSING TIME

Residential: 4521 Pine Tree Holdings LLC paid $30 million for the 8,500-square-foot house at 4521 Pine Tree Drive in Miami Beach. Pine Tree Drive LLC, an entity managed by Richard Frankel, sold the home, which was being marketed as a teardown. The property is now asking $42.5 million, and comes with approved plans for a 25,000-square-foot estate. 

Commercial: Boca-based Grover Corlew paid $69.7 million for the office building at 200 East Broward Boulevard in Fort Lauderdale. The trade marks a 14 percent discount from its last sale in 2017. The real estate investor, led by Anuj Grover and Mark Corlew, bought the building at 200 East Broward Boulevard from sellers Banyan Street Capital and Oaktree Capital Management. 

— Research by Mary Diduch

NEW TO THE MARKET

Every day could be Breakfast at Tiffany’s — only, in Palm Beach. The penthouse above Palm Beach’s Tiffany & Co. is for sale asking $52.9 million. The 9,000-square-foot unit at 415 Hibiscus Avenue was built in 1950 and features four bathrooms, five bathrooms and two half-baths, plus a rooftop terrace. The asking price works out to about $5,880 per square foot, and HOA fees total about $3,000 a month. The unit last sold for $18 million in 2023. Christian Angle of Christian Angle Real Estate has the listing.

A thing we’ve learned

Jimmy Buffett’s estate is at the center of a legal battle between his widow, Jane, and business adviser Richard Mozenter. Both are trustees of the late “Margaritaville” singer’s $275 million estate — but they each allege the other has mismanaged the money, Florida Trend reported. The two have been locked in a lawsuit since last year, leaving it up to a judge or mediator to decide who’ll control the singer’s wealth.

— Alissa Gary

Elsewhere in Florida: Politics edition

• Major tech companies including Google, Amazon, Anthropic, Meta and Microsoft have poured money into campaigns for Florida’s midterm elections, Politico reported. That includes $2 million this election cycle donated by data center developers, including those behind Palm Beach County’s Project Tango.
• Two companies controlled by Erika Donalds, the wife of Republican gubernatorial candidate Byron Donalds, have received $30 million over the past four years from five state-funded charter schools, the Miami Herald reported. One of her companies is set to collect $15.7 million in service fees from an online school for the 2026-27 school year. That means if Donalds is elected, his family could have a direct financial stake in the education policy he would set.
• Voters in seven Florida counties will decide on questions of land conservation next month, the Tampa Bay Times reported. Their ballot measures broadly decide whether to create or renew conservation programs to protect swaths of land from development. Those counties are Brevard, Charlotte, Marion, Manatee, St. Johns, Santa Rosa and Sarasota counties.

— Alissa Gary