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Metropica Developer Keeping Condo Options Open

Plans Call for 2,000 New Units, But 'Market is Going to Tell Us'
March 2, 2018
Metropica, a $1.5 billion development in Sunrise, will have condos, offices, apartments, hotels and retail.
Credit: Metropica Development.

The master developer of Metropica in Sunrise, FL raised eyebrows when it announced plans in 2014 to build roughly 2,000 condominiums in eight towers at the $1.5 billion, mixed-use project in western Broward County.

Real estate observers said that seemed like an ambitious plan, even before the region's condo resurgence started to cool. But now the developer is ready to consider other options.

Bernard Werner, principal of Metropica Development, told CoStar News this week that the firm is not tied to building traditional condos on 20 of the 65 acres located west of the Sawgrass Mills outlet mall at Sunrise Boulevard and Northwest 136th Avenue.

Werner said the developer will look at a variety of specialty uses, including age-restricted condos and possibly a condo-hotel that would allow owners to rent the residences when they aren't living there.

While hotels and apartments are planned for another part of the massive project, Werner wouldn't rule out building more as alternatives to condos.

"The market is going to tell us what we're going to see there," he said. "Our preference is to build as much for-sale product as possible."

Werner and other officials gathered Thursday night to celebrate the topping off of the first condo tower at Metropica. The 28-story, 263-unit building is more than 65 percent sold, Werner said. Prices of the remaining units are the high-$400,000s to the mid-$600,000s, with penthouses available in the $750,000 range. The 5-Star building is due to open this year.

Werner said he is confident the condo will attract more residents who don't want to pay a premium for living on the ocean and who prefer to be near a bustling new community that eventually could feature more than 300,000 square feet of retail, including Urban Outfitters and iPic Theaters, and up to 650,000 square feet of offices.

Werner expects to attract financial services and law firms that want to be in a suburban market to fill the commercial spaces.

Jonathan Kingsley of Colliers International questioned whether there is enough office demand in western Broward for 650,000 square feet, though he added that a big user may show interest as overall vacancies are low, with few large blocks of space available.

The rise of e-commerce has hurt malls and shopping centers, but Werner described Metropica's retail as "aspirational, experiential and outdoor lifestyle," which he insists shoppers still covet. The first phase of the commercial component is expected to break ground this summer and be delivered about a year later.

Werner said he's pleased with the sales pace at the first condo tower, but analysts remain skeptical of the condo market in western Broward.

Peter Zalewski, principal of the condo database for South Florida, said most people in a suburban market such as Sunrise prefer to live in single-family homes. Condos are a better fit on the water or in an urban setting - especially now that the new Brightline commuter train service will connect the downtowns of West Palm Beach, Fort Lauderdale and Miami, he noted.

Zalewski said one of the only ways to attract condo buyers so far west of I-95 is to slash prices.

"They'd be in a price competition war, and that's a race to the bottom," he said.

Miami housing analyst Jack Winston agrees that there is only a small market for condos in western Broward. Even the more luxurious locations near the ocean are seeing a sales slowdown, he said.

"The condo market has definitely reached its peak, and it's on the way down and might plateau a little bit," Winston said. "If it has any legs, it's definitely in Miami-Dade County, and to a limited degree in southern Broward, downtown Fort Lauderdale and certain parts of Palm Beach County."

Winston said Sunrise's condo market likely is limited to empty nesters and second-home buyers. He added that Metropica Development is wise to be considering alternatives.

"The idea that they're going to build that many towers with that kind of limited appeal ... is not going to work," he said.

Paul Owers, South Florida Market Reporter  CoStar Group   
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