Gulf condo projectsSunday, September 02, 2007 By KATHY JUMPERReal Estate Editor
Larry Wireman won't build more condominium units at Caribe Resort in Orange Beach until the market heats up, but he does plan to construct the 14,000-square-foot Caribe Restaurant overlooking Perdido Pass, the Gulf of Mexico and Cotton Bayou.
"It's something I promised the people that bought in here a long time ago," Wireman said. "I think it will enhance the property values. The owners can walk from their unit along the boardwalk to the restaurant."
Almost two years of sluggish condominium sales have caused many developers to kill some new projects and put others on hold. It's difficult to get financing for new condo construction with almost 3,000 units -- about 1,350 of those Gulf-front -- already on the market, agents said. But there are reports that sales are picking up, and at least one local agent said the market shows signs of a comeback.
Another 398 condo units are expected to come on line by the end of the year, according to the Alabama Gulf Coast Convention & Visitors Bureau.
The 31 units at Santorini in Orange Beach had presold before Hurricane Katrina hit in 2005, but most of the buyers backed out because of hurricane-related losses, according to Elizabeth Helton of REMAX of Orange Beach. Her father, Philip Helton of REMAX, is the developer, and he has since redesigned the project, adding more amenities. The project will be renamed by the time presales start in October.
There will be 28 units at prices averaging $1.5 million, she said, adding, "We combined all our favorite projects to create this product."
Sales are flat at the 30-unit Kiva Village, which was finished this summer on Fort Morgan, according to developer Jim Edgemon. The large units range from the $540,000s to $830,000s and are on the 18th hole of Kiva Dunes golf course. With slow sales, he said, "We may just furnish and rent them."
Some condos are moving off the market.
"We're selling a condo a day," said Marie Curren, marketing manager for Orange Beach-based Brett-Robinson, which has projects along the Gulf.
Brett-Robinson started closing on units in its 17th complex last weekend, and some owners are already moving into the 100-unit Phoenix 9 in Orange Beach, Curren said.
"We're very fortunate that we haven't experienced any problems," Curren said. "No one has backed out."
Phoenix 9 presold two years ago, she said, and prices range from $649,000 to $685,000 for two-bedroom units and $875,000 to $995,000 for three-bedroom, 3½-bath units.
Most of the 600 units at Wireman's Caribe development were sold prior to Hurricane Ivan in September 2004, he said. Units in the third building closed in 2006, and none of the buyers backed out, he said. Construction on the first Caribe tower started in September 2000. W.G. Yates & Sons Construction of Philadelphia, Miss., is the contractor and a developer partner in the project.
"Values at Caribe have gone down, but they've held up as well as can be expected, considering the market," Wireman said. The units for resale at Caribe range from $650,000 to more than $1 million for penthouse units.
His Caribe Restaurant was designed by architect Henry Norris & Associates of Pensacola and will be operated by the owners of Cosmos Restaurant & Bar in Orange Beach. The 350-seat eatery will have an oyster bar, pizza bar and tiki bar and open in the spring 2008. The restaurant will be elevated by 6 feet to capture the views through a wall of glass windows overlooking the outdoor deck.
Wireman's other condo project, the 24-story Turquoise on Alabama 182 in Orange Beach, should close its 173 units in April 2008, he said. The units average $1.5 million and the first four floors are parking spaces. He paid almost $40 million for the 30 acres and 900 front feet in April 2004 and started construction on Turquoise in spring 2005
"We stored drywall before the prices went up and we bought the land at a reasonable price," he said.
Wireman and Yates have an adjacent 900 front feet under contract. The second Turquoise building is under construction but has not sold out.
"We sold enough to satisfy the bank," he said. That project is scheduled to be complete in summer 2009.
Helton said that she predicts "a tremendous fourth quarter" in 2007, once the hurricane season ends.
"I think we've bottomed out and are coming back up," she said of the condo market at the beach. "I have been slammed the last two months. It feels like the old days for me."
She attributed the renewed activity to a shaky stock market and word that the Fed could cut interest rates.
"The summer started off with just lookers, but I've written seven contracts since the third week of July," she said. "Not every offer has been accepted, but I've had three closings, and I'm still working with people trying to find deals.
"But sellers are not going as low as they were," she said. "They are tightening up on prices."