Last August, developer Jorge Perez said he had lined up buyers for more than two-thirds of the condos at the 40-story oceanfront project he built with developer Donald Trump.
Peter Zalewski, principal of CondoVultures.com, said similar developments along Hollywood beach are selling for an average of nearly $400 a square foot. But the average price per square foot so far at Trump Hollywood is $616. Zalewski stated: "There's no question that Trump Hollywood is an anomaly in that market, and that's why sales have been so slow."
Tessa Solomon, a sales associate at Trump Hollywood, said the development has 20 completed sales. However, at this time, only four have been recorded with Broward County.
Zalewski also noted that Perez quickly closed sales at his lavish Icon Brickell condo in downtown Miami after beginning price cuts last fall, and potential buyers at Trump Hollywood are counting on the same thing happening there.
Other Perez and Trump projects have struggled amid one of the worst condo downturns in decades. Perez has handed back to lenders the CityPlace South Tower in West Palm Beach and most of Icon, while the unfinished Trump International Hotel & Tower, a condo-hotel in Fort Lauderdale, faces foreclosure.
From 2000 to 2005, investors would buy units in buildings at pre-construction prices and then flip them for huge profits before the condos were completed. The demand caused developers to build more units. But not enough long-term owners bought, leaving investors and developers in financial peril.
According to the Florida Realtors, over the span of 2 years, condo sales have increased while prices have plummeted. The median price for an existing condo in Broward last month was $78,600, a 64% slide from a peak of $216,800 in February 2006.
Greg McBride, senior financial analyst with Bankrate.com stated: "Buyers are definitely looking for bargains."
Trump Hollywood's 16 closings total $28.7 million, for an average sale price of about $1.8 million. Marketing materials last year indicated the condos, which feature Italian cabinetry and wine refrigerators, ranged from $1.3 million to $7 million.
Zalewski concluded that while bulk buyers are snapping up largely empty condo projects across South Florida, a bulk sale probably won't happen at Trump Hollywood. This is because the units are too large, with the smallest at about 1,900 square feet. Therefore, the deal wouldn't make financial sense.
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