High-end condos reach new height in sales

Any doubts New York real estate executive Dan Raffe had about selling luxury real estate on Siesta Key in the downturn have evaporated.

That's what selling $25 million worth of condos in less than 12 months will do to boost someone's confidence. “We've had a killer year,” says Raffe, whose firm, NS/CSE Siesta Key LLC, has closed on 19 condo sales at The Residences on Siesta Key Beach since January. Two more sales, adds Raffe, are in the closing stages.

Raffe is an executive vice president with New York-based NorthStar Realty Finance Corp., which took over the mortgage note at The Residences on Siesta Key Beach in late 2011. The note in the deed in lieu of transaction for the complex, a $100 million project initially built under a fractional ownership model, was worth about $40 million. (See Business Review, Jan. 27, 2012)

A real estate investment trust, NorthStar spent into the millions to rebrand and reintroduce the project early this year. The firm's note on the property gave it ownership of 33 condos, out of 44 total in the six-story building. Sizes range from 1,700 square feet to nearly 3,000 square feet, and high-end features abound in each fully furnished unit, down to the Viking and Sub-Zero appliances. NorthStar, finally, switched the fractional ownership model to whole ownership when it took over the property.

But Raffe nonetheless worried the market wouldn't respond to the project, or the price point: $785,000 to just over $2 million. “There is certainly less luxury product on Siesta Key than in other areas of Sarasota-Bradenton,” Raffe tells Coffee Talk. “There was always a question as to whether the market can support this. The market has now spoken.”

Raffe attributes the success to several factors. The switch to whole ownership resonates with customers, he says. So does the project's partnership with Hyatt residences, which sets up each unit like new for every owner. Buyers, especially snowbirds, like that they can come for a long weekend without the hassle of opening and closing a property.

There are 12 condos left for sale at The Residences on Siesta Key Beach. Raffe, based on the 2012 success, projects those units will be sold by midway through 2013. “It's clear there is a pretty deep pool of luxury homebuyers on Siesta Key,” Raffe says. “People were waiting for this kind of product.”