Miles keeps projects rolling along
The developer trims its sails for sales in a shifting market .
By PAUL SWIDER
Published December 10, 2006
As Miles Development finishes one project and fleshes out another, its principals are adapting to St. Petersburg's changing market as they prepare other developments.
"St. Petersburg hasn't been overbuilt," said Ken Doble, chief operating officer of Atlanta-based Miles. "But it has been overpromised."
While the real estate market has cooled, other builders' projects have stalled or closed, yet Miles is moving ahead. Its first foray, 1010 Central, was a smashing sales success, but buyers are more cautious now as it builds out the Sage.
Plans for another condominium building at 1701 Central have transformed into an apartment complex that will start this spring.
"It's tougher to do presales in this market," said J. Jason Perry, Miles' vice president of development. "But there is a shortage of properties for rent."
Miles has seen the spectrum of activity. When it opened sales for 1010 Central in March 2005, it had a stampede and sold all 114 units in a month.
"People were beating on each other," Perry said. "It was insane."
Sage launched at the end of the boom in November 2005. Miles had half presold before construction started in March, but more than a quarter of its 112 units just south of downtown are still available. With the building likely topping out this year, interest is growing.
"Now that people can get in and see it, sales are picking up," he said.
But the same dynamics that affect individual home buyers are driving Miles' decisions. Sellers think their land is worth more than it is and buyers are waiting for a drop in prices, so nothing happens.
"There's this disconnect," Doble said. "People are just sitting there looking at each other."
Perry said Miles is actively shopping for more land downtown but is running into inflated prices. Some owners cling to dreams of instant wealth and tout their own project approvals as though they increase the land's value. Perry said for Miles, it doesn't work that way.
"The zoning's already flexible here so someone else's approvals aren't an asset," he said. Miles paid $25 per square foot for 1010 Central's land but now turns down prices of $200 to $300. "That market came and went."
The boom also converted lots of apartments to condos, including some Miles did elsewhere in Florida. Now the company hopes to cash in on the rental shortage with 1701 Central's 150 apartments in a four-story building near I-275. Ranging in size from 700-1,250 square feet, the units will rent from $850-$1,400.
"We also see an opportunity to do workforce housing," Perry said. "We'd like to do more apartments, but we also see a strong office and hotel market in St. Petersburg."
Doble said he is also curious to see how the real estate market is affected by legislative fixes for insurance and property tax issues. He said he expects a positive outcome and renewed business.
"It doesn't help the fence sitters," he said. "But we feel like they will solve it. That's why we're so bullish on Florida."
Paul Swider can be reached at 892-2271 or pswider@sptimes.com or by participating in itsyourtimes.com .