- March 21, 2013
Matt Kihnke has experience building condominiums in Sarasota, but he thinks the site at 1335 Second St. presents a distinct challenge for a developer.
“I think that location necessitates, kind of, an epic building,” Kihnke said. “That’s really what we were looking for — a boutique, high-end product for downtown.”
Kihnke, president of MK Equity, plans to build a 10-story, 12-unit condo on the 0.24-acre downtown property. The developer, which also built the Sansara condo at 300 S. Pineapple Ave., filed preliminary documents with the city Jan. 31. Kihnke hopes to begin construction within six months.
Located down the street from Selby Public Library, the Second Street site is zoned downtown core. Although the heart of the city is teeming with construction activity, much of the residential building is focused on the bayfront and the Rosemary District.
In designing the project, ARS Architecture Principal Eric Allyn sees the Second Street condo as an important venture into a less-explored segment of downtown: the area bounded by U.S. 41, U.S. 301, Fruitville Road and Ringling Boulevard.
“A lot of the waterfront sites have been built upon; there’s not a lot of those sites left,” Allyn said. “That is allowing us to look inward at the new frontier of building in Sarasota, which is urban construction and urban living, our focus for this project.”
The market for downtown core residential construction isn’t totally barren. Other new downtown core residential projects include The Mark, a 157-unit condo at State Street and Lemon Avenue, The DeSota, a 180-unit apartment complex at 1415 Second St., and BOLD Lofts, a 97-unit apartment building near Fruitville Road and Goodrich Avenue.
Brian Jones, president of Jones Development Co., has worked on three of those downtown core projects, including the 1335 Second St. condo. He said it’s still not a well-tested residential market, but agrees it’s the next frontier for developers who have few remaining opportunities to offer residents water views.
Despite the size of The Mark, The DeSota and BOLD Lofts, Jones said not to expect many large-scale residential projects in the downtown core going forward. Jones said it’s difficult for developers to gather more than a quarter-acre to build downtown. And the downtown core comes with a height limit of 10 stories, a step down from the 18 stories allowed on the bayfront.
Meanwhile, developers say the maximum density of 50 units per acre is forcing builders to concentrate on luxury projects. Condos at the 1335 Second St. project will range from 2,500 square feet to 3,500 square feet. Those units will sell for between $1.3 million and $3.3 million.
“The zoning prohibits us from building what we would ideally like to build: larger, taller buildings with more density,” Kihnke said. “We’re directed into building more higher-end, boutique and architecturally important buildings.”
With a hard cap on the number of buildable units, a developer has the choice of, say, building 15 mid-sized apartments or 15 large condos. From a financial standpoint, the latter usually makes more sense.
“I’m going to build them as large as I can, because that’s the only way I can make a profit,” Jones said. “Everything’s super luxury.”
And despite the influx of new condo product, there’s no shortage of demand for high-end units downtown.
“Sarasota is an inverted market,” Jones said. “In all these buildings, we sell the penthouses first. People are coming off the barrier islands, buying these units cash.”
Bob Vail is president of Kolter Urban, the developer behind The Mark. He said sales are going well for one of the first new projects in the downtown core, with 60% of units sold as construction is still ongoing. He doesn’t see the market as totally unfamiliar, comparing The Mark to residential towers built in the downtown core in the 2000s.
“It’s a more current version of the buildings that came in the last cycle — 1350 Main, Plaza at Five Points,” Vail said.
Even though The Mark is also marketed as luxury living, Vail sees room for some stratification within the downtown marketplace. He said about half of Kolter's units in The Mark and the bayfront Vue Sarasota Bay condo sell for between $600,000 and $1.2 million, which means the developer’s target demographic is broader.
“We aren't waiting for that select individual that drives up in the Bentley,” Vail said.
Kihnke said the 1335 Second St. project could be complete 14 months after construction begins. As plans for that site move forward, residents can expect to see increased development interest in the downtown core.
“It’s just the natural progression,” Jones said.