Developer Confident Regarding Planned Luxury Condo Project in Daytona Beach

Counting on the sagging market for million-dollar condos to bounce back within the next year, one Florida developer has begun work on a 21-story oceanfront tower on Daytona Beach’s southern edge.

WCI Communities, which has built nearly 300 condo units in Hammock Dunes over the past four years and nearly 80 condo buildings elsewhere, says Daytona Beach will be its next major development area in Florida.

“In a year or two, we’ll be sold out in Hammock Dunes. That’s why Daytona is so hot on our radar screen right now,” said Timothy P. Byal, WCI’s Northeast Florida division president.

Byal said the company intends to develop other oceanfront condo projects in the Daytona area, but has not purchased any other parcels yet, due to the sagging Florida housing market. For now, the company will concentrate on getting the One South Atlantic units pre-sold.

Since buying the project site for a record $23 million in January, WCI has quietly tweaked the design, adding more amenities to justify listing prices that will average about $1 million apiece for the tower’s 134 three-bedroom units. All units will have full or partial views of the ocean.

“The biggest change we’ve made is to reconfigure the elevators so that every unit will have private elevator access. You’ll be able to enter the elevator from the parking garage and take it right up and step out into your own home,” Byal said. “We hope to create a living experience that doesn’t exist anywhere else in the Daytona area.”

However, Karen Ricks, a resident of the Ocean Dunes neighborhood near the construction site, said she and some neighbors aren’t impressed with the project. Florida mortgage costs remain low, but will many people buy into this development after what we’ve seen from the condo market of late?

“I’m sure the inside will be classy but the outside looks dumbed-down compared to what the Bellagio was going to be,” Ricks said. “They met with us and they made some changes - they’re not going to have a big wall around it now - but how can you be happy with a 21-story building in your neighborhood?”

Pricing hasn’t been completed as of yet, but Byal said all units in the facility will cost at least $450 per square foot.

“I can’t imagine any of our units will cost less than $600,000,” he said.

The national developer is moving ahead with the Daytona Beach project even though it’s suffering one of its worst sales slumps in years. Last month the publicly owned company reported its third-quarter profit plunged 73 percent to $10.7 million and new orders fell 82 percent from last year.

Citing “dramatically lower demand for Florida condominiums,” it said it was scrapping land purchases it had planned to make in some areas.

However, Daytona Beach remains a priority. While the luxury housing market is tough to predict, he said the company believes it has reached its low point and will show substantial improvement by the end of 2007.

He said the Volusia County market is attractive to WCI partly because condo flippers have not been as active here as they have in other parts of the Sunshine State. He estimated that about one-third of the area’s newly built condos are owned by investors hoping for a quick resale, while in other areas the “investor overhang” runs 50 percent or higher.

Byal said he thinks One South Atlantic will attract strong interest from local buyers as well as Orlando area residents.

“I may be bullish, but I think I could go to Daytona Beach Shores right now and get 50 percent of our presales purely from current condo owners who want to move up to something better,” he said.