Rebuilding a neighborhood: Will Olara, Temple Israel, Ritz condos remake West Palm's north end?

Waters off the coast of West Palm Beach can run deep. But just how deep is the market for pricey condominiums on the waterfront north of the city's downtown?

Olara Residences by Savanna Fund of New York is about to find out.

The 1.6-million-square-foot residential complex at 1919 N. Flagler Drive is entering its second winter sales season, this time with a posh sales center. The sales gallery opens later this month at 300 Butler St.

Christopher Schlank, Savanna's co-chairman and president, is optimistic that sales momentum will accelerate once buyers get a peek at the floor-to-ceiling windows, recessed lighting and contemporary design in the model unit.

Condo prices start at $2 million, and will go up to $10 million for penthouses in the 26-story tower overlooking the Intracoastal Waterway. So far, the project has sold about 13% of the units, which average about $4.7 million each.

Miami-light? West Palm Beach's waterfront draws new luxury high-rise towers

Despite the perks and the presales, real estate experts say the Olara project is no easy lift.

Unlike the established luxury condominium market on South Flagler Drive, the pricey Olara tower is being built on North Flagler, in a still-gritty part of the city. On a recent visit to Olara's sales center, police cars swarmed a building just around the corner from the Butler Street sales center.

"I'm not sure the neighborhood has caught up yet to these prices," said Alan Ciklin, a longtime West Palm Beach real-estate lawyer.

While condos like The Bristol on South Flagler can fetch millions of dollars per unit, "Do I want to spend millions here?" Ciklin said of North Flagler.

In addition, two other boutique luxury condos planned for North Flagler could start sales in the coming year, providing competition for luxury condo buyers willing to take a chance on this section of the city.

The condos include a luxury condo tower by Related Cos. of New York coming next door to Olara, on the Temple Israel site at 1901 N. Flagler Drive. The property will block some views from Olara units.

Schlank shrugged off the neighborhood challenges, saying the area is changing for the better.

He should know. The company controls 40 properties on seven acres in this section of West Palm Beach, and Savanna plans other developments adjacent to Olara.

Will Olara's sales accelerate this winter?

Olara is the largest project slated for this section of North Flagler Drive, and the furthest along.

Sales of the Olara's 275 condominiums began in late January. Even without the benefit of a model unit, the project has clocked more than $100 million in sales.

This winter, Savanna hopes to sell $150 million worth of condo units, or 40% of the tower, Schlank said.

Despite high interest rates and other economic uncertainties, Schlank is optimistic about sales. He said Olara offers buyers a unique experience, different from existing or planned condominiums along the city's waterfront.

Amenities are the lure for this 2-acre, wellness-focused project, he said.

Among the perks: A 13,000-square-foot indoor-outdoor fitness center, a spa, two swimming pools, a gourmet food market, a restaurant and a private six-slip marina with two boats for residents' use. "What we're providing is something that doesn't exist ... you can come here and never leave," he said.

Olara even is throwing in a one-year membership to Sollis Health, a concierge health care clinic with a location in Palm Beach.

Olara isn't just for homebuyers, either. The project also will feature 170 rental apartments in a separate tower.

In recent months, demolition crews have cleared the site in anticipation of construction starting in early 2024.

Schlank said he's so committed to building the twin-tower complex that even if Olara doesn't sell enough condo units to hit requirements for a construction loan, he'll just "put in more equity."

He also pooh-poohed problems that Savanna is having with its New York office building portfolio, which is struggling with increased vacancy rates. Schlank acknowledged that office buildings in New York "are under stress," but said there are no plans to give back any buildings to lenders.

"We don't do that," Schlank said. "We're putting in more equity and extending the debt."

Schlank added that the New York office portfolio is "totally separate" from the company's projects in West Palm Beach, including Olara.

More luxury condos coming to North Flagler Drive?

In addition to Olara, a project by Related Cos. of New York is slated to come to North Flagler Drive, too.

Last October, members of Temple Israel voted to authorize the temple board to negotiate the sale of their waterfront land to Related Cos. The vote came after the temple also received proposals from several other real estate developers, including Savanna Fund and Related Group of Miami.

On Monday, the temple obtained West Palm Beach city commission approval to increase the property's zoning height from 202 feet to 306 feet, the same height as Olara. The higher zoning height is expected to boost the sales purchase price, according to temple members.

Related plans a tall condo residential tower on the 1.5-acre temple property. People familiar with Related's conceptual plan describe the tower design as cylindrical or oval.

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A sales campaign on the condo could start within the next couple of months.

In an interview, Temple Co-President Marty List would neither confirm nor deny the property's pending purchase, including Related Cos.'s role as the buyer.

But sources said the temple won't leave its prime waterfront spot. Instead, in an unusual design, the temple sanctuary, offices, library and social hall will occupy the first couple of floors of the condo high-rise. In addition, a preschool will be built on the west side of the temple tower.

Schlank said he's been up front with potential Olara buyers that a condo tower will rise on the south side of his condo. He said the tower's curved design will minimize, but not eliminate, the blockage of views from Olara.

Related, a global real estate firm that built Hudson Yards in New York and The Square in West Palm Beach, is a longtime builder and owner of commercial office towers in West Palm Beach.

The company now also wants to build luxury condos in the city. Last month, Related paid almost $200 million for land on South Flagler Drive slated for the South Flagler House twin-tower luxury complex. Related is led by Miami Dolphins owner Stephen Ross.

Plans for Ritz-Carlton condo advance

Meanwhile, two blocks south of the temple site, Related Group of Miami is hoping to obtain a city zoning change to allow for construction of a tall Ritz-Carlton Residences condo on a shopping center site at 1717 N. Flagler Drive.

The zoning request could be reviewed by a city planning committee this month.

If eventually approved by the City Commission, it is possible that the Ritz-Carlton tower, which already has a website, could launch sales in the new year. A Related Group spokesman declined to comment.

Related Cos. of New York and Related Group of Miami used to be affiliated but are now separate companies.

This means that both entities, along with Savanna Fund, all could be angling for luxury condo buyers in 2024.

Savanna a key player north of downtown West Palm Beach

Many of the properties adjacent to Olara are boarded up or down-and-out properties. For the most part, they are owned by Savanna Fund.

In fact, Savanna Fund owns properties that stretch west from the Olara sales center to Dixie Highway, as well as properties west of Temple Israel next door, Schlank said.

The company's control of acres of prime land north of the downtown has the potential to remake this section of the city.

Schank said Savannah may eventually build rental housing west of the temple property, while some sort of mixed-use commercial development could be built west of Olara.

Alexandra Clough is a business writer and columnist at The Palm Beach Post. You can reach her at aclough@pbpost.com. Twitter: @acloughpbp. Help support our journalism. Subscribe today.

This article originally appeared on Palm Beach Post: West Palm Beach's waterfront; Will pricey condos at Olara draw buyers?