A wave of projects sees this once-quiet area filling up with hotels and new housing, but amassing land for redevelopment remains a challenge.
Tucked between South Florida’s two biggest cities, Hollywood is getting the type of large-scale real estate developments that have reshaped Fort Lauderdale and Miami. And while many of Hollywood’s biggest projects unfold along the city’s oceanfront, in the last year or so several major projects have emerged farther inland.
Hollywood has little undeveloped land but includes plenty of older property suitable for redevelopment, which makes the area increasingly appealing to developers. However, acquiring several parcels to pull together is no easy feat. For example, multiple aging motels were demolished to make way for a 307-unit condo hotel, called Costa Hollywood Beach Resort, opening this spring. “It was very complicated, buying little motels and attaching them,” said Moses Bensusan, the Canadian-born developer of Costa Hollywood.
Big construction projects preceded by teardowns have increasingly popped up throughout Hollywood. And similar growth in both oceanfront and inland development is happening in other beach towns in Broward and Palm Beach counties, according to real estate analyst Jack McCabe of McCabe Research & Consulting, who cited Boynton Beach, Lake Worth and Riviera Beach as examples.
Outside South Florida’s two largest cities, “you’ve got a lot of coastal markets that are ripe for redevelopment,” McCabe said.
Developers shopping for land in Hollywood find that, even after teardown expenses, “the cost of the land, compared to Fort Lauderdale and Miami, is considerably lower,” he said.
A new hotel haven
Major hotel developments along Hollywood’s Ocean Drive have been a big part of the city’s building boom in recent years, particularly the 2015 opening of the 349-room Margaritaville Hollywood Beach Resort, a hotel brand inspired by the hit song of the same name by Jimmy Buffett.
McCabe said that the highly publicized launch of Margaritaville Hollywood brought fresh attention to the city and subsequently encouraged other large-scale real estate investments on and off the beach. “It’s hard to get that momentum, but once you get it, it can snowball, and that seems to be where Hollywood is right now,” he said.
The original developer and one of the owners of the Margaritaville hotel, Lon Tabatchnik, agrees. “We proved to the market that there’s credibility here on Hollywood Beach,” he said, asserting that there’s evidence of their influence. “We’ve seen our neighbors do capital improvements to their façades and their restaurants,” Tabatchnick said.
Hollywood is part of a larger hotel market across Broward County that appears robust. Occupancy rates in July, August and October at Broward County hotels were higher or basically unchanged compared with the same months in 2016. (Hurricane Irma caused a significant sag in September occupancy countywide.)
Hotel investment in Hollywood has picked up just west of the beach. A 111-room hotel from the Circ brand is scheduled to open this spring as part of the mixed-use Hollywood Circle development downtown. Future guests had already reserved more than 2,000 nights as of late February, according to Chip Abele, the developer of Hollywood Circle.
Abele has plans for another hotel on a nearby site in downtown Hollywood where he’s looking to build a 103-room Hilton Garden Inn as part of a 19-story mixed-use development called Block 40. It would include 166 rental apartments, a 391-space parking garage and 11,920 square feet of retail space, plus separate swimming pool decks for hotel guests and residents. Abele, who has secured site-plan approval from the city for Block 40, was in the permit application phase of the project in February. “By summer, Block 40 could be under construction,” he said.
Another hotel construction project in the city’s downtown area is pending on a site near Hollywood City Hall, where North Carolina-based CN Hotels reportedly bought just under an acre last year for $1.05 million. The company plans to build a 119-room hotel there, the Sun-Sentinel reported. Anit Patel, managing partner of CN Hotels, did not return a call for comment.
Near the city’s western fringe, Hollywood’s biggest hotel development by far is the $1.5 billion expansion of the Seminole Hard Rock Hotel & Casino, featuring a hotel tower in the shape of a giant guitar. The expansion, which is expected to be completed by mid-2019, will add 806 guest rooms and suites, including 638 in the tower, which is designed to resemble back-to-back guitars with a height of 450 feet. The expansion will nearly double the current size of the Seminole Hard Rock’s casino.
Housing projects rising
Near the site of the Hard Rock project on State Road 7, Tabatchnik is working on a mixed-use project with a residential core. His firm, Lojeta Group, along with PrivCap Companies, is developing 441 Rock as a 180-unit rental property together with a Wawa convenience store, a Wendy’s restaurant and a self-storage facility. He said the expansion of the Seminole Hard Rock will benefit his 441 Rock development “just from the amount of employees they are going to have to bring on … We’re across the street.”
Other sizable residential developments have popped up west of Interstate 95 in Hollywood. Among the biggest is Parkview at Hillcrest, a sprawling development between State Road 7 and Interstate 95 that will ultimately contain 645 new residences in a roughly even mix of houses and townhouses. Atlanta-based homebuilder Pulte launched sales for the development’s second phase on Dec. 1 after selling nearly all 151 homes in the first phase of the Hollywood development. The development site is a former golf course Pulte acquired in 2016 for $25 million.
And local heavyweight Related Group has fared well with its 342-unit Hyde Beach Resort, under construction on Hollywood’s South Ocean Drive. About 80 percent of the 77 condos have been presold and the remaining 265 units will be hotel rooms, a Related spokeswoman said in a Feb. 26 email. Completion is scheduled for 2019.
Off the beach, Hollywood’s condominium market appears thinner. Consider the fate of a project called H3. Just west of Hollywood’s downtown core, originally named H3 Hollywood and conceived as a condominium project, the development will be renamed and will operate as a 247-unit rental complex. Stalled construction of the complex is expected to resume by April, according to Vivian Dimond, a real estate broker who formed a group of investors that took over the project.
For his part, the original developer of Margaritaville Hollywood may hatch another big development on the beach someday. As he advances his 441 Rock development near the Seminole Hard Rock out west, Tabatchnik still looks east for new opportunity along Hollywood’s oceanfront.
“I think you’ll see some redevelopment from Hollywood Boulevard to Sheridan Street,” said Tabatchnik. “I love the city.”