A still-timid luxury condo market has put two high-profile Jacksonville projects on hold.
Beacon Riverside, a high-rise on the St. Johns River by NAI Hallmark Partners, suspended its marketing in October.
Also, developers of Aphora at Marina San Pablo reported the tower project is no longer active. Aphora is a high-rise on the Intracoastal Waterway by Bove and Remi Property.
In both cases, presales fell short of 50 percent of the units, the threshold needed for regular construction financing.
Beacon Riverside began sales in 2013. Prices for the tower’s 45 units ranged from the $700,000s to $2.3 million.
Hallmark presold a quarter of the units, but couldn’t overcome the 50 percent hurdle.
“We kept hearing the same thing over and over again, ‘We’d like to see the building under construction and then we’re in,’” said Hallmark principal Bryan Weber. “It wasn’t worth an aggressive marketing effort to keep going.”
Weber will seek gap financing, perhaps from international and New York hedge funds, in order to get construction started. In tight financing times, it’s a strategy that’s been pursued successfully in South Florida markets.
With no such deal imminent, though, Hallmark released funds placed in escrow by buyers.
“It didn’t cost us anything to return the money,” Weber said. “It was the right thing to do.”
Aphora at Marina San Pablo has “changed its focus,” said developer Gabe Bove. Instead of a condo tower, developers will now deliver fee-simple coach houses, which are like townhomes.
“We hope it will foster new activity,” Bove said.
Coach homes can be delivered more quickly — 12 to 14 months rather than 24 months. And the project can proceed in phases, so not as many units need to be presold.
Bove isn’t ruling out a high-rise tower on the parcel in the future.
“We’re just changing our emphasis. Then, we’ll see what the market is like,” he said.
Weber said he still believes in the Beacon Riverside high-rise, which closely mirrors Villa Riva, a luxury condo tower that succeeded a decade ago.
Hallmark owns the land outright and the parcel is entitled for up to 80 units.
Because it’s a small infill lot on the riverfront, a high-rise condo is still its highest and best use, Weber said.
“Its time will come,” Weber said. “We still have a little more homework to do.”
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