1355 Flagler Drive Waterfront Parcel Sells for $195M

An affiliate of New York-based Related Cos., led by billionaire and Miami Dolphins owner Stephen M. Ross, paid $194.57 million for a waterfront condo development site in downtown West Palm Beach.

Flagler Towers Project Dev LLC, a partnership between Palm Beach-based luxury developer Frisbie Group and Houston-based real estate giant Hines, sold the 3.4-acre site at 1355 S. Flagler Drive to SFH Owner LLC, an affiliate of the Related Cos. The deal included $159.57 million of seller financing.

The developer purchased the property from Palm Beach Atlantic University for $41.5 million in July 2022. It currently has student housing, which will be demolished as PBAU already opened new dorms.

Frisbie and Hines launched sales in May for South Flagler House, featuring two 28-story towers with 89 units.

However, Frisbie and Hines were forced to halt the project after Two Roads Development filed a lawsuit against them in November 2022. That case was settled in July, allowing the project to move forward.

Instead of building, Frisbie and Hines elected to take a big profit on the land by selling it to the Related Cos.

"We began working on this project in early 2020 and are excited for the next phase in its evolution," stated Juan Jacobus, managing director of Hines. "This great outcome will allow Hines to continue to invest in the growth of our South Florida platform, and allows us to shift our focus to other compelling development and acquisition opportunities across the region at this point in the cycle."

Related Cos. said Robert A.M. Stern Architects designed the building, its first luxury condo in South Florida. Suzanne Frisbie will continue leading sales for the project.

The developer said pricing starts at $7.5 million and it plans to break ground in 2024.

“Continuing our longstanding industry-leading partnership with Robert AM Stern, Related will deliver South Flagler House with the absolute best standard in residential living," Ross stated. "We will bring the industry-leading luxury quality that we’re known for across the country to West Palm Beach with timeless elegance that will be unmatched by anything the market has seen to date."

This deal increases Ross’ investments in downtown West Palm Beach, which until now have mostly focused on office, hotel and retail. Related Cos. developed CityPlace, now known as the Square. It’s the largest owner of Class A office space downtown and it has one office under construction, plus two more seeking approvals.

All of those office buildings are bringing companies to the city, and those well-paid employees need somewhere to live. That has led to more multifamily construction in the city, a trend Ross now looks to capitalize on.

“West Palm Beach has seen amazing growth and development in the last few years and a residential development of this stature signifies an exciting new chapter for the community that we feel will attract discerning buyers seeking the best in luxury living,” stated Kenneth A. Himmel, president and CEO of Related Urban.