Historic Homes Sales are their Specialty
By Paul Owers

10/23/06

Illustrated Properties has opened an office in Palm Beach County focusing on the sale of historic homes.

The Palm Beach Gardens-based real estate firm hired Molly Douglas from Coldwell Banker to run the new venture. She said she's not aware of another agency having a similar niche.

"That's one of the primary reasons we decided to develop it," said Douglas, who once lived in and restored a Maryland home built in the mid-1800s.

Douglas said she has sold hundreds of historic homes in the past six years in such trendy West Palm Beach neighborhoods as El Cid, Grandview Heights and Prospect Park.

Buying a historic home is different than buying a property built five years ago, she said.

"You can't just change the front façade," she said. "If someone comes down from Boston, and they want to knock down the front door, well, they can't. You need to know what the restrictions are."

Douglas said the new Illustrated office will focus on homes from Delray Beach to North Palm Beach. It has about 30 listings so far. She's still hiring agents and hopes to have 50 to 75 by next year.

The office now is in temporary quarters in West Palm Beach, but Douglas expects to move next year to a historic building in Mango Promenade, the oldest historic district in the city.

The developers who turned the former Blockbuster headquarters in downtown Fort Lauderdale into office condominiums are taking their act to downtown Hollywood.

Nir Shoshani and Ron Gottesmann are spending $1.5 million to make condos out of the former Center Court office building at 2450 Hollywood Blvd. The new name of the 55,000-square-foot property is The Office.

Businesses can own from 300 to 8,500 square feet.

Office condos became popular across South Florida in recent years as interest rates fell. Some businesses can save money by owning rather than renting.

Shoshani and Gottesmann paid $23 million for the old Blockbuster building and renamed it Museum Plaza. The 180,000-square-foot development is nearly sold out.

>It's not just homeowners complaining about insurance premiums and property taxes. Office tenants and landlords are getting slammed, too.

Many tenants are struggling to pony up the extra cash, ultimately bad news for building owners, said Neil Merin, a West Palm Beach real estate broker.

"This sticker shock is going to create so much hesitation on the part of tenants that landlords are going to have to forgo rent increases they thought they were going to be able to get in the marketplace," Merin said.

Merin told more than 400 people at an Urban Land Institute conference that Palm Beach County's office vacancy rate is less than 10 percent now and could fall to 5 percent in the next two years. Broward's vacancy rate and outlook are similar.

"That is a very dangerous place to be," he said. "That means we cannot accommodate growth."

South Florida office vacancy rates were as high as 30 percent at the beginning of the decade. But then the five-year housing boom started, prompting residential developers to outbid their commercial counterparts for prime parcels.

That led to fewer office buildings and a gradual reduction in vacancies.

But don't expect many new buildings in the short term, even though the housing boom is over. A land shortage and rising construction costs have made it hard to justify new buildings.

The increased costs for insurance, taxes and construction leave Merin wondering what kind of tenants will be coming to the area during the next few years.

"For a long time, we were a low-cost provider [of office space]," he said. "Now we're one of the most expensive markets on the East Coast of the United States."

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