Owner of ex-IBM site to build condos in West Palm

By Paul Owers

05/05/2005

WEST PALM BEACH — The company that owns the former IBM complex in Boca Raton is trying to cash in on the condo craze.

T-Rex Capital paid $22 million for 6 acres in West Palm Beach and plans to build 170 luxury condominiums and villas. The waterfront units will be priced from $550,000 to about $3 million.

The $180 million project along North Flagler Drive at 57th Street also is expected to include a 25-slip marina for yachts. New York-based T-Rex plans to open an on-site sales center in June. The units are expected to be ready in 18 to 24 months.

"The oldest rule in real estate is location," T-Rex President Cliff Preminger said Wednesday.

That said, new condo projects are popping up seemingly every day in all parts of Palm Beach County.

Thousands of units are in the pipeline for downtown West Palm Beach alone. Buyers are eager to tap into a carefree lifestyle that includes such amenities as concierges, fitness centers and controlled-access security.

"I have seen no chink in the armor of the South Florida condo market," said Bill Hall of Illustrated Properties, the firm marketing the so-far unnamed T-Rex development. "Demand hasn't waned. I haven't seen any indicator that says I need to be concerned."

But some real estate experts fear the market soon could be overbuilt.

The condo demand is fueled in large part by investor-speculators who buy units and then "flip" them to third parties at sizable profits.

If market conditions worsen and speculators can't find buyers, developers and lenders will be left with a glut of unsold units.

"It's a game of easy money and Monopoly being played today," said Michael Cannon, managing director of Integra Realty Resources, a Miami-based consulting firm. "Is the user market enough to absorb all that is being developed? That's a question that can't be answered at this time."

Integra estimated last year that 7,000 units were planned for the county; Cannon says it's possible that the number now has quadrupled, although he doesn't believe all of those will be built.

Of T-Rex's 20-story condo building, the first three levels will be for parking, so all of the units will have unobstructed water views.

"You really can see over the top of Singer Island to the ocean," Preminger said. "That's not in every other project."

The company bought the land last month from Aqua Vista LLC, an entity that had planned to build an $85 million condo development.

The condos will be T-Rex's second venture in the county.

Five years ago, T-Rex paid $138.65 million for the 1.8 million-square-foot former IBM campus on Yamato Road in Boca Raton. The property is leased for offices, but T-Rex has since sold the surrounding 300 acres to the city and developers.

T-Rex and its affiliates have investments in more than 7 million square feet of residential and commercial real estate nationwide with a combined value of $900 million.

***