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Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

(Bloomberg Businessweek) -- On an almost cloudless, 70-degree winter ­morning in Palm Beach, Fla., real estate broker Rob Thomson sits inside President Donald Trump’s private club, Mar-a-Lago, reflecting on a banner season. “I’ve been selling real estate for 34 years,” says Thomson, a club member and the owner of Waterfront Properties & Club Communities. “This is the longest bull run of my career.”

Large houses, small houses, empty lots, and mansions: They’ve all flown off the shelf, thanks to the state’s generous income tax rate (0%) and Palm Beach’s international prestige. In the past 12 months, three properties in the town sold for about $100 million each. “We’re seeing people pay more for things than before,” Thomson says.

And yet, there’s one notable cloud on the barrier island’s otherwise sunny outlook: the 10 houses sitting unsold within a half-mile, four-block radius of Mar-a-Lago, which Trump designated his primary residence in September.

The property at 1090 South Ocean Blvd. has been on the market since 2016; its asking price is $6.95 million, down 26.5% from an initial $9.5 million. Four listings have languished since 2018 or before; seven have had their prices reduced. This is in stark contrast to the eight luxury Palm Beach homes that sold in the fourth quarter of 2019, whose average time on the market was only 191 days, according to Douglas Elliman Realty LLC.

“The fact that they’re all being marketed at the same time, in close proximity, is not natural,” says Jonathan Miller, the president and chief executive officer of Miller Samuel. “A cluster of listings, especially at the high end, is not likely to reflect a positive condition” in the market.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

But the struggles haven’t occurred only since the time of the 2016 election. Listed with Waterfront Properties for $15 million, 500 Regents Park has been off and on the market since 2006; in 2018, its asking price was $25 million.

Brokers have varying explanations for why this little area has so many empty mansions, but they all say it has nothing to do with Trump. “That’s an aberration,” says Ridgely Foster, a broker with Sotheby’s International Realty Inc. in Palm Beach. “It’s like when people get cancer and then they sue the power company and try to prove it came from the power lines.”

Paulette Koch, a broker with Corcoran Group, says the accumulation of houses for sale around Mar-a-Lago is “all coincidental.” The truth, she adds, is that “you can get a group of people who all want to sell [at once] for varying reasons.”

There are headaches for residents when the president visits, but, Thomson says, the hassle is minimal, even at the club. “It’s not like they’re strip-searching me,” he says. When Trump is there, “you pull into the tennis court, they run a thing under your car, a dog walks around your car, they open your trunk and take a look, and then they say ‘Thank you.’”

Some brokers say that, if anything, Trump’s visits have a positive effect. Jeff Cloninger, a broker for Sotheby’s, says friends who live nearby like walking to the beach without looking when crossing the street. There’s simply no traffic. “There’s a positive side to everything,” he says.

Others point out that the listings, like Mar-a-Lago, are under the flight path of planes landing at the Palm Beach International Airport, a phenomenon so deafening it’s called “the Palm Beach pause,” because people can’t speak over it.

Miller has a different take. “It’s not uncommon to have clusters of people around a celebrity or notable name trying to cash in,” he says. In other words, Trump might not be a deterrent, but he also might not be the draw they think he is. “It’s more about these listings being overpriced.”

Here are eight of the 10 properties.

500 Regents Park Rd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $15 million
Square feet: 5,998
Bedrooms: 7
Bathrooms: 8
Acres: 0.49

Built in 1959 by Palm Beach architect Clarence Mack, the Regency-style house sits at the end of a cul-de-sac and has waterway frontage overlooking the mainland. “It’s very special for Palm Beach,” says its agent, Tamara Jeanne-Fisher of Waterfront Properties. “Buyers can build their own dock.” The entertaining areas are in the center, a massive bedroom suite is to the left, and a kitchen and dining room are on the right. “This is a large property, but it’s compact, almost like a condo alternative,” Fisher says. Nearly every room overlooks the garden and pool. The house has access rights to the beach on the other side of the island. It’s painted in a striking “Russian blue,” though Fisher says that she’s “checked with Russians. There’s no Russian blue.”

137 Woodbridge Rd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $10.38 million
Square feet: 9,220
Bedrooms: 6
Baths: 7 full, 1 half
Acres: 0.47

Built in 2002, the house has been significantly upgraded by its present owner, with a brick driveway and a three-car garage, “which is unusual for this neighborhood,” says agent Alison Newton of Douglas Elliman. There’s also a lot of outdoor space: “It isn’t one of these houses that encompasses every portion of the land.”

1230 South Ocean Blvd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $12.995 million
Square feet: 10,383
Bedrooms: 7
Bathrooms: 8 full, 3 half
Acres: 0.96

This massive, Regency-style home is only three houses from the beach and sits on an unusually large parcel for the area. Prospective buyers would need to complete construction on the building. The current owner “started renovating it and halted construction,” says listing agent Dana Koch of Corcoran. “Buyers can come in and finish it themselves, or they can tear it down. The price is based on the land value.” The house is configured with a first-floor master bedroom suite and already has new marble floors and impact doors and windows.

250 Algoma Rd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $5.495 million
Square feet: 4,703
Bedrooms: 6
Bathrooms: 6
Acres: 0.41

“It has all the charming features that everyone desires on the island,” says broker Michael Korman of Korman Realty. “It’s what people are looking for when they say they’re looking for a Palm Beach property.” The home, built in 1938, has a pool, detached guesthouse, and separate garage. The house is one lot in from the Intracoastal Waterway and comes with deeded beach access.

145 Woodbridge Rd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $6.6 million
Square feet: 3,564
Bedrooms: 5
Bathrooms: 5
Acres: 0.31

“It was just redone,” says its broker, Hilary Musser. The house has “brand-new everything,” like the other houses on Woodbridge, she notes, and “comes with an automatic membership to Mar-a-Lago,” a vestige of when Trump was converting the property into a private club and needed to get approval from his neighbors. Club initiation fees are waived for Woodbridge residents, though they still have to pay annual dues. “A Mar-a-Lago membership has become a premium item in this town,” she says. “A lot of people can’t get in now.”

200 Regents Park

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $11 million
Square feet: 5,450
Bedrooms: 6
Bathrooms: 7 full, 1 half
Acres: 0.71

Last year, the owners of the house finished a gut renovation and redecoration led by interior designer Leta Austin Foster. “She did every inch of it,” says Sotheby’s broker Jeff Cloninger, who represents the listing. “There’s no romance in old plumbing and old wiring, so all that kind of stuff behind the scenes got done, and then everything else that was a classical feature of this Clarence Mack [house] was enhanced.” The ceiling heights, volume of rooms, and elaborate details, he says, “are tremendous. It’s a true Palm Beach house.” Even the bedrooms, formerly for staff, above the garage have been redesigned as a children’s suite. Outside, there’s a covered terrace, pool, and fruit trees.

1090 South Ocean Blvd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $6.95 million
Square feet: About 1,300
Bedrooms: 4
Baths: 2
Acres: About 0.4

Listing agent Bob Jackson says this house is a teardown. “It would be ridiculous to think you’d have a 1940s-era, 1,500-square-foot house that you’d spend $6 million or $7 million to buy,” he says. Instead, the lot is a prime example of an investment property. “If this lot sells for $6 million to $6.5 million and someone spends $3 million to $5 million to build their dream house, they’ll have beautiful ocean views from the second floor,” he says. “If their investment is between $10 million and $11 million, two years from now it has to be worth $16 million to $20 million when it’s finished.” The lot has lingered on the market, Jackson says, because initially it was priced too high. At the current price, “we’re in a much better position,” he says. The initiation fee to Mar-a-Lago is waived for every homebuyer on the block.

140 Kings Rd.

Palm Beach Real Estate Is On a Hot Streak—Except Near Mar-a-Lago

Price: $9.915 million
Square feet: 6,785
Bedrooms: 5
Bathrooms: 6 full, 2 half
Acres: 0.33

“The market is driven right now by a lot of buyers looking for something renovated or new construction,” says Heather Bretzlaff, an agent with Douglas Elliman whose family just built this house on spec. “People like the immediate gratification of moving into Palm Beach and enjoying all its amenities.” The house, she says, is a “classic, elegant design with traditional decor. It’s stately.”

To contact the editor responsible for this story: Chris Rovzar at crovzar@bloomberg.net, James Gaddy

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