A vacant lot in a dozy neighborhood north of downtown West Palm Beach sold this month for an astounding $10 million, proving that even with no house, dirt on North Flagler Drive is a coveted commodity.
The sale price on the less than half-acre piece of waterfront property was nearly three times the $3.4 million it traded for just one year ago.
Developer Foster Kaali-Nagy, who flipped the property, said he had no plans to turn it over so quickly, instead anticipating the construction of a new waterfront home to go with the existing dock and boat lift.
“I’ve been in this business a long time and normally you have to build a house on a lot to sell it,” the Connecticut-based developer said. “I was pretty taken back by the fact that it was as valuable as it was in such a short period of time.”
North Flagler Drive has attracted more attention from deep-pocketed developers with plans for high-rises and homes built on speculation as waterfront land becomes increasingly scarce.
In the past two years, The Related Group of Miami paid $13.9 million for land in the 1700 block of North Flagler Drive with aspirations of building a Ritz-Carlton Residences. It also is building a twin-tower project called Marina Village at 4444 N. Flagler in partnership with Rybovich.
The Frisbie Group paid $24 million for an old apartment building at 5400 N. Flagler. The 22-story Alba condominium at 4714 N. Flagler is scheduled to open in 2025.
Developers see a demand for the new luxe units with well-paid employees drawn to the area by Goldman Sachs and other financial services and private equity firms that are putting down roots in West Palm Beach.
Samantha Curry, executive director of luxury sales for Douglas Elliman Real Estate on Palm Beach, represented both sides on the sale of the vacant residential lot at 3220 N. Flagler Drive.
The land, which is at the corner of North Flagler and 32nd Street, was originally listed at $12.8 million. With few takers at that price, it was dropped to $10.3 million and had two offers in the same day. The seller settled on $10 million with no inspection.
The community where the vacant lot sold is about two miles north of downtown West Palm Beach in the Northwood Shores neighborhood. It was settled in the 1880s when a minister and professor of horticulture from the Great Plains named Elbridge Gale retired there and began growing mango trees. The original name of the town that sprang up was Mangonia.
At the time, the scene across the water to Palm Beach would have been mostly a tangle of scrubby cabbage palms, locust berry bushes and climbing aster vines. Henry Flagler was just opening his luxurious Georgian-style Royal Poinciana Hotel, followed by the beachfront Breakers resort and the Gilded Age mansion Whitehall.
Today, mansions line the Lake Worth Lagoon’s western edge and Curry emphasizes it’s just a four-minute drive from Northwood Shores to the Flagler Memorial Bridge to Palm Beach. It’s also about two miles by boat with no fixed bridges to the Atlantic Ocean through the Lake Worth Inlet, also called the Palm Beach Inlet.
Ten blocks south of the vacant lot, Curry Park is getting a makeover the city of West Palm Beach estimates will cost between $29.4 million and $38.7 million. The redesign, which includes refurbished docks, kayak rentals, a café, a community center and improved tennis courts, was approved by city commissioners Monday.
Northwood Shores Neighborhood Association President Carl Flick said some longtime residents are intimidated by the rapid-fire changes happening in an area known for its “Old Florida” appeal.
“They see their community disappearing around them,” he said. “We’ve been like a hidden treasure.”
The pandemic-triggered growth shows no signs of abating, Realtors said. Although a traditional summer slowdown is happening for the first time in two years, many believe South Florida’s high-end real estate market could be one of the few in the country that won’t feel a big hit from rising interest rates and a faltering stock market.
“There’s only so much waterfront, and you can’t make more of it, so anything on the water is going to command a high price,” said Parkland Companies owner Neil Kozokoff, who is a real estate developer in the Northwood neighborhood.
Kozokoff predicts the limited liability company that bought 3220 N. Flagler will build a house on the land and resell it for about $25 million.
“And they’re probably going to get it,” Kozokoff said.
A waterfront home built in 2007 north of the vacant lot is on the market for $18 million after selling in June 2021 for $8.1 million. The house next door to it traded hands three times last year, starting with a February sale of $3.7 million. That went up to a recorded sale of $5.1 million in July. It sold again in September for $7.5 million.
“Maybe we were just at the right place at the right time,” said Kaali-Nagy. “Everything explodes.”