Sign of the times: Even Lennar is building condos
By Samantha Joseph
Miami-Dade County's largest builder, Lennar Corp., is adding nearly 1,300 condominiums to the market in four suburban projects.
Company officials say market trends, scarcity of land for single-family homes and low mortgage rates are fueling its condo division's growth.
Two of its four developments - the Grand and the Colonnade - are in Kendall, where much of the company's single-family homebuilding was concentrated for years.
The Colonnade, scheduled for groundbreaking in May, features four 10-story buildings with 515 units. The Grand, which is completed, is a 71-unit, eight-story development.
Its two other projects, 360† and Casa Marina, are in North Bay Village. Construction of the 280-unit Casa Marina is expected to begin late this year, and work on the 414-units 360† is set to start this month.
Condos represent a shift for Lennar, which has been building low-rises and single-family homes for more than 10 years.
The company cited land scarcity and the county's growing population as the basis of its condominium division, focusing primarily on mid- to high-rise developments.
With interest rates at a 40-year low, company officials said selling property instead of offering rentals makes better business sense.
"That's what we've done here," said Anthony Seijas, who heads Lennar Development's condominium arm. "We try not to dictate to the market what it wants. We step back, look at what the market is asking for, and we react accordingly."
And what the market demands, said real estate executive Tere Blanca, is high-rises.
"Part of what is happening in South Florida is that we have limited supply of suburban land," said Ms. Blanca, senior managing director for Cushman & Wakefield. "It's a natural evolution for the traditional single-family homebuilder like Lennar to move into the building of high-rise towers."
Lennar foresaw the trend, Mr. Seijas said, and moved toward it before market forces compelled all companies to do so.
"We wanted to get into the condominium market more on our own terms," he said. "Now that the market is strong, we felt there is more of an opportunity."
The focus on suburbia was also deliberate - an effort to avoid downtown Miami and the Miami River, where a staggering amount of development is planned, he said.
"Our philosophy is to look at markets that are not overbuilt; to hit markets where I think there will be a greater demand and not as much competition," Mr. Seijas said.
On several fronts, Lennar stayed on familiar ground. It continues to concentrate on the southern and western parts of the county, and its condominiums, like its single-family homes, fall in mid-market price ranges, from $200,000 to $500,000. The average cost of a new Lennar single-family home is about $230,000.
"We've made it a point to stay out of the high end because we feel that that's probably a little more volatile and more likely to be affected by changes in the economy," Mr. Seijas said.
Lennar builds 700 to 1,000 homes annually in the county. "We have strengths that we could use," Mr. Seijas said, "and piggyback on to become a leader in the marketing of condominiums."