Case Study #2
Shore Town Residential Project
History:
A developer purchased one the largest parcel in Seaside Heights, Ocean County, New Jersey which was previously used as a miniature golf course obtained approval for 34 condominiums in Seaside Heights. The l was cleared foundations were started when the lender took back the project through foreclosure.
The Issues:
Seaside Heights suffered from a collapse of the residential market there was an abundance of condominium units available at steeply discounted prices. In order to deliver its first unit, the entire building needed to be constructed.
The Process:
Harvestate Group commissioned a market study of Seaside Heights discovered that there were over 200 condominiums for sale but barely a hful had traded during 2011/2012. Another issue was that condominiums were very difficult to finance most lenders required a minimum of 20% down payment while others would not provide mortgages unless a certain percentage of units were sold. While most might associate density with value, the opposite was true in this case. It made no economic sense to build an entire condominium building to simply deliver a hful of units. Since there was no market to support condominium development an alternate use was required.
The Fix:
Harvestate Group worked with the bank to explore alternate uses (commercial, multi-family rental, municipal uses) but ultimately it was determined that the best solution was to convert the project to fee-simple, detached housing. In order to maintain value, Harvestate Group its professional team developed a site sensitive plan of 26 narrow, zero lot line lots with homes enjoying open floor plans which could be built one at a time as they were sold. By using zero lot lines, each home would enjoy outdoor areas on their side yard.
Since the homes needed to be narrow it was necessary to eliminate interior walls to allow for an open floor plan. We also wanted to provide the option for roof top terraces so the owners could enjoy the sunsets sunrises with unobstructed views. The engineering became tricky given the need to build to current hurricane stards but by devoting the time necessary to develop appropriate structural systems, the goal was achieved.
A Homeowners Association was established to provide for common area maintenance lscape services so each home is maintained without the need for the owners to spend time off taking care of their yard. The HOA also provides rules regulations for the peaceful enjoyment of all residents neighbors.
Harvestate Group recognized the desire of vacation owners to be connected to their homes so we brought on a specialized tech company to provide a menu of connectivity options allowing the owners to lock/unlock their doors, turn lights on off, adjust their heating cooling systems, visually monitor their homes turn their security systems on off – all from their smartphone or laptop.
The Recovery:
When the project was given to Harvestate Group to fix, there were no developers willing to take it on as approved (which approval was conforming to existing codes regulations). Harvestate Group identified a financially viable market, assembled a team of professionals most proficient in shore area development used various planning market arguments in support of Planning Board approval of the development. All development permits were amended Harvestate Group secured all local, county state approval.
Harvestate Group entered into a Joint Venture with the bank partnered with a builder to build the homes for individual buyers.
The model home opened in April, 2014 the project is currently under construction. The bank will recover its l investment share in the profits of the construction of the homes.
To view the development currently under construction visit: www.IslBeachWay.com.