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Developers step up apartment projects in Volusia, Flagler counties amid growing housing shortage

With the population continuing to grow in both Volusia and Flagler counties, developers are stepping up construction of new apartment communities here.

Projects already underway including the first new apartments to be built in Palm Coast in five years and 1,800 new units in Volusia County.

“There’s a big demand for apartments in the Daytona Beach area right now,” said Luke Wickham, senior vice president of multihousing investment properties at the Orlando office of commercial real estate brokerage CBRE.

“Daytona Beach has really improved and stepped up its game,” he said, adding that the increase in employment opportunities and addition of new entertainment/retail amenities such as One Daytona, Tanger Outlets and Tomoka Town Center are adding to the area’s appeal.

“Historically, Daytona Beach has been a blue-collar/Walmart type of economy, but that’s really changing with the new headquarters for Brown & Brown going up in downtown Daytona Beach, the new Amazon (last-mile delivery station) facility and the hospitals expanding,” he said.

In the past two-and-a-half years, Volusia County has seen the completion of new apartment complexes that have added 900 units, more than twice the number added the previous four years, according to CBRE data.

Developers are expected to add another 588 new apartment units in the county by year’s end, according to the report.

Apartment projects currently under construction include the 301-unit 500/East Apartments on LPGA Boulevard, east of Clyde Morris Boulevard that is expected to welcome its first residents in November, the 282-unit Icon One Daytona apartments that are expected to welcome its first residents in October, and the 292-unit Springs at Port Orange complex going up on the northwest corner of Summer Trees Road and South Williamson Boulevard, across from The Pavilion at Port Orange shopping center, that’s also expected to have some units available for occupancy by year’s end.

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Young professional: I love luxury apartment living

The current surge in new luxury apartment projects does nothing to fill the Daytona Beach area’s need for more affordable housing, but local observer G.G. Galloway believes it could be helping address another chronic problem.

“For years, our greatest export has been our young people,” said the longtime commercial Realtor, referring to the “brain drain” trend of homegrown talent leaving to pursue opportunities in larger metro areas.

“Now we’re starting to keep our greatest asset, the young minds being educated right here,” said Galloway, a partner with Coldwell Banker Commercial Benchmark Properties in Ormond Beach. “An aging community dies. We need to keep our young people here.”

Keys to attracting and retaining young professionals include creating more high-paying jobs such as the ones being offered at companies like Daytona Beach-based Brown & Brown Insurance, Ormond Beach-based Security First Insurance, both of which are building new headquarters in the area, as well as medical products manufacturer B.Braun.

Other keys include opportunities for millennials to connect with one another, such as the Volusia and Ormond young professionals groups and the need for amenities such as a greater selection of shopping, dining and entertainment options, which are being created in places like Tanger Outlets and Tomoka Town Center shopping centers as well as the One Daytona complex across from Daytona International Speedway.

But there is also the need for housing options that can appeal to young professionals.

That’s where luxury apartments, such as the new Tomoka Pointe Apartments set to welcome its first new tenants next to Tomoka Town Center, and Icon One Daytona Apartments along International Speedway Boulevard come in.

Christian Harris, 22, is an account executive with Brown & Brown who has enlisted two friends, both also in their twenties, to become roommates with him in one of the first apartment units at Tomoka Pointe.

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Rooms to rent: Luxury apartments booming in Volusia, Flagler

When Eastwind Development officials visit Daytona Beach to check on the construction of their Tomoka Pointe Apartments, they can’t help but notice the growing number of competing projects underway in the area.

Those projects include the Icon One Daytona apartments going up next to Cobb Daytona Luxury Theatres, the 500 East apartments along LPGA Boulevard, apartments planned just east of Volusia Mall and across from the AdventHealth hospital in Daytona Beach and The Pavilion shopping center in Port Orange as well as along Ridgewood Avenue in South Daytona and at New Smyrna Beach’s Venetian Bay community.

Apartments are also planned off of State Road 44 in New Smyrna Beach, on both sides of Reed Canal Road near Atlantic High School in Port Orange, across from the SunRail station in DeBary, at the Town Center complex in Palm Coast and west of Belle Terre Parkway in Bunnell.

Consolidated-Tomoka Land Co. also is seeking to team up with a developer to create a grocery store-anchored mixed-use development on the soon-to-be former First Baptist Church block in downtown Daytona Beach that would include apartment units, and another project just south of the Ocean Center that would include high-rise apartments as well.

All have one thing in common: they are being touted as luxury apartments with “resort-style” amenities.

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Apartment boom in progress

The influx of newcomers to Volusia and Flagler counties is not only creating a need for more new homes.

It’s also creating increased demand for apartments.

And investors and developers have taken notice.

“Daytona Beach was one of the top rent growth markets in the country last year,” observes Michael Donaldson, senior vice president of investments for the commercial real estate brokerage Marcus & Millichap in Tampa.

The average rental rate for apartment units in Daytona Beach is just over $1,000 a month, a 5 percent increase compared to a year ago, according to Donaldson, who oversees his firm’s national multi-housing group.

The national average rental rate has increased 4 percent in the past year, he said.

The average occupancy rate for apartments locally has also risen to 96.4 percent, exceeding the state and national averages of 95.5 percent and 95.4 percent respectively, according to Donaldson.

“Developers are typically attracted to strong demographic trends and employment growth,” said Donaldson, noting the growth in apartment developments throughout Central Florida, especially in the bigger cities.

As the cost of building new apartment communities in Orlando and Tampa rises, “developers are migrating to secondary locations such as Daytona Beach as they can typically acquire land for much cheaper and there is less competition,” he said.

New commercial developments locally such as the One Daytona entertainment/retail/dining complex across from Daytona International Speedway and the Tanger Outlets and Tomoka Town Center malls next to the Interstate 95/LPGA Boulevard interchange are also spurring the increase in apartment projects here, according to McDonald.

Apartments under construction in Volusia County include the 276-unit Tomoka Pointe apartments rising up behind Tomoka Town Center in Daytona Beach, and in New Smyrna Beach, the 264-unit Messina by the Lake apartments in the Venetian Bay community.

Those projects are just the start of a surge in new apartment developments throughout Volusia and Flagler counties.

In Daytona Beach, multifamily housing projects in the works include developer Unicorp’s plans to build 340 apartment units as part of its Tomoka Village development just north of LPGA Boulevard, between Williamson and Clyde Morris boulevards, Indigo Development’s plans for the 301-unit East LPGA Apartments complex along LPGA Boulevard, east of Clyde Morris Boulevard, developer Next Chapter’s proposed 210-unit Dunn Avenue apartments on Halifax Health-owned land next to Volusia Mall, and Prime Group’s plans to build 276 apartment units on the east side of One Daytona.

In addition, Consolidated-Tomoka Land Co. recently acquired much of the downtown Daytona Beach block where the old First Baptist Church is located with plans for a mixed-use project that will include apartments.

The impetus for Consolidated-Tomoka’s project is national insurance giant Brown & Brown Inc.’s future headquarters campus two blocks away on North Beach Street.

The 11-story office building is expected to bring hundreds of white-collar professionals to downtown Daytona Beach when it opens in late 2020.

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Commercial developments surge in Volusia County

With builders poised to construct the most new homes in Volusia County this year since 2006, commercial developers are also picking up the pace.

Through the first six months of 2018, 127 permits have been issued for new commercial projects in the county, equal to or more than the full-year totals of any year since 2008.

“Everybody’s on a roll right now,” said Dick McNerney, a commercial real estate agent with Adams, Cameron & Co. Realtors. “There’s so much momentum now.”

McNerney recently helped negotiate the sale of 24 acres of wooded property owned by Volusia County Schools to German medical products maker B.Braun for a potential expansion of its manufacturing facilities along Mason Avenue, just west of Bill France Boulevard in Daytona Beach.

He is also assisting the family of the late Joseph Fisher in planning a 100,000-square-foot industrial building on Mason Avenue, just east of the Trader Joe’s distribution center.

The build-to-suit project being developed under the name Tiki Supreme is across the street from the site of two planned industrial buildings, one 251,000 square feet, the other 66,000 square feet, that VanTrust Real Estate is looking to develop.

Other notable commercial developments recently begun include the future headquarters for Security First Insurance, a $30 million 4-story, 136,000-square-foot building that raised its first walls in early August at Ormond Crossings in Ormond Beach, and the first of three planned retail buildings in front of Volusia Mall.

“The countywide commercial new construction permit activity reported for the second quarter of 2018 was, in a word, spectacular,” said Rob Ehrhardt, Volusia County economic development director.

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276 ‘luxury’ apartments to be built near Daytona’s Tanger Outlets

Developers hope to break ground in late March on $39M community

DAYTONA BEACH — The new Tanger Outlets mall and the planned “power lifestyle” retail complex under construction across the street will be getting a bunch of new neighbors next year.

Site work is expected to begin in early March on a 276-unit luxury apartment community on the northwest corner of Mason Avenue and Williamson Boulevard.

The project’s developers expect the first residents to move in by spring 2019, said John “Jack” Weir, whose company, Palm Beach Gardens-based Eastwind Development Group, is teaming up with Canada-based North American Development Group to build the multiple-building apartment community.

“The goal is to raise the bar when it comes to apartment living in Daytona Beach,” said Weir of the planned “class A” development.

Amenities will include an 8,000-plus-square-foot clubhouse with a community room, fitness center and yoga/spin room, business center, a “cyber cafe” for residents that will include USB ports where they can plug in laptop computers and other mobile devices, game room, community swimming pool and deck area, walking trails and a dog park.

The 17.7-acre Tomoka Pointe apartments will consist of three four-story buildings that have an elevator, five three-story “garden apartment” buildings, parking garages as well as surface parking, and a pond.

The apartments will include one-, two-, and three-bedroom units, with some that will be loft-style. All units will feature 9-foot ceilings, tile and wood plank flooring, stainless steel appliances, granite countertops, bedroom ceiling fans, and energy and water conservation features.

Weir said his company also plans to build an east-west access road at the north end of the apartment community that will connect Williamson Boulevard on the east with the Tanger Outlets mall on the west.

“We’ll be building out the full southeast quadrant” of the 235-acre Tomoka Town Center development area that includes Tanger Outlets, which opened in November 2016, the retail center that North American Development Group is building directly east of Tanger whose tenants will include Dave & Busters, Academy Sports + Outdoors, Hobby Lobby, and a planned Sam’s Club membership warehouse store.

Tanger’s project is set to open this fall.

“We are very excited that this high quality multifamily development is getting closer to breaking ground,” said John Albright, the president and CEO of Consolidated-Tomoka. “Daytona Beach is in desperate need for new multifamily inventory to meet the high job growth creation that our area is experiencing.”

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