A Home for Those Fleeing High Rents? Developers Begin Construction on Fort Lauderdale Mixed-Use Tower

A steady rise in employment is pushing rent growth in amenity-rich buildings in Fort Lauderdale.

That’s according to Marcus & Millichap’s Q2 Multifamily report, which said that there’s a slower development schedule as it trails a five-year average by more than 600 units, despite large population gains. 

With nearly two-thirds of incoming online inventory in or adjacent to the cities of Hollywood and Fort Lauderdale, there’s a nearly 12% increase in rent so far this year. 

To help make living more affordable for people who may be pushed out due to rising rents, New Smyrna Beach-based developer Prospect Real Estate Development Group and Miami-based Midtown Capital are building Advantis Station Flagler Village, a 12-story, 252-unit, mixed-use building in Fort Lauderdale. 

Prospect chairman, Richard Zahn Sr., said the property will provide much-needed workforce housing in a booming suburb.

“During COVID, we saw an opportunity to buy a lot of land across the U.S. at very competitive rates,” said Zahn. “If you’re poised and positioned in the right location, it all became huge net benefits for our growth. As sad as COVID has been for our country, it’s been a very good opportunity as far as being the right opportunity, and the right time, with the right asset.”

Advantis Station at Flagler Village is one of several joint ventures in which Midtown Capital and Prospect have partnered. BCC Construction of New Smyrna Beach is the general contractor for the project. The developers bought The Red Cross from its lease to obtain the property.

Navish Chawla, managing partner at Advantis Development, said the biggest challenge was navigating the lease and working with different sellers from around the world.

“COVID actually pushed the Red Cross out of that building. It was kind of obsolete and they weren’t occupying it. It was a great trigger point for us to negotiate a buyout that allowed us to move them because they had several years on their lease,” said Chawla.

Chawla clarified that when the company says “workforce housing,” it means building market-rate apartments.

“We call it workforce because in the marketplace today where construction costs are, many of our competitors are building at a basis we think, quite frankly, is not sustainable for the rents they need to achieve. They cater to a very upper echelon of a renter that is paying $3,000 to $4,000 in rent, which makes that project viable,” said Chawla. “Because of our basis, we can attract a much more cost-conscientious renter, the true workforce renter which kind of insulates us from any type of market disruption that you may see because our rents were much more affordable by a dollar basis.”

Chawla said his team looks at Fort Lauderdale as an extension of where people are moving out of.

“If you look at Florida as a whole, you have a strong industry in Fort Lauderdale, you have a tech boom that’s happening in the Miami area and that’s pushing north,” said Chawla. “It was a transaction we worked on for about 14 months to get to a place where we could actually design it and break ground on it.”

Advantis Station Flagler Village, located at 333 NE 6th St., will feature a seventh-floor amenity deck with a pool, and creative features such as a large mural, art columns and sections framed by synthetic wood.

“Fort Lauderdale is a really interesting market that caters to what I call high-rise development. There are not a lot of midrise projects that exist. What we liked about this is that we could build 12 stories at a competitive price given our basis,” said Chawla. “It really positioned us as a neighborhood feel that you don’t get being in downtown Las Olas.”

Each project provides quality, amenity-rich housing in growing metropolitan areas. In November 2021, the partnership also broke ground on another development called Advantis Lake Worth. Chawla said the focus of many of its developments have live/work concepts to them.

“We do a lot of open-floor plans in our units. When you walk into a unit, you’ll see a lot of glass and it provides a lot of light and air. We design product today that is almost a condo-level finish. Predominately because we think people are spending more time at their residence, both in their building, given that the work-from-home environment is very paramount and here to stay,” said Chawla. 

‘Don’t Let Anybody Push You’

For newer developers navigating the currently challenging market, Zahn says his approach is akin to boxing: unless you’re out, you’re still in the fight.

“Pick your product type. More importantly, pick your team, and then put 3,000 pounds of energy and effort into realizing your vision and using your team for good input, but following your own heart, and don’t let anybody push you or strain you off your ball,” he said.

For developers who feel like they have failed, struggling to get financing, deals approved or capital, Zahn said to give him a call.

“You might be a great teammate. You may not be a great business leader on your own, but we would love to talk to people who actually have the skill set in the industry because we’re growing,” said Zahn. “Our doors are open to people who may not have all pieces to the puzzle, but they may very well be the piece we’re looking for.”

Construction is expected to be completed in the fall of 2024. 

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