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Surfsedge homes sell at record pace during pandemic

STORY BY STEVEN M. THOMAS (Week of April 15, 2021)

When real estate developers from Florida’s Gulf Coast bought a 5.2-acre tract of land in Indian River Shores at an auction four years ago, they could hardly have anticipated that a pandemic would turn the luxury subdivision they envisaged into one of the hottest developments in Vero history.

But that’s exactly what has happened at Surfsedge, where the 10 available homes – starting at $1.76 million for the least expensive – sold out in a two-month period this spring to buyers from as far away as Texas and the Northeast.

“Once we signed the first contract, it was like dominos falling,” said Megan Raasveldt, the Dale Sorensen Real Estate agent who leads the sales effort at the 24-home luxury subdivision, which includes 12 single-family homes and 12 oceanfront condos priced at up to $3 million for the largest condo.

The first of three model homes in the subdivision was completed on Jan. 5, which seems to be what buyers were waiting for – the opportunity to walk through the finished product before committing to a purchase.

The first contract was signed two weeks later on Jan. 18 and Raasveldt sold the last of 10 available homes on Good Friday.

In one sense, the pace of sales is not surprising, with island home inventory at all-time lows and a continuing influx of pandemic-driven buyers eager to purchase in Vero Beach.

At the same time, the $20-million burst of sales is remarkable – and highly gratifying to Raasveldt and Michael Hoyt, the Lutgert executive in charge of the project.

But this “overnight” payoff did not come easily – or quickly.

The story of Surfsedge actually began when Hoyt, who grew up in Vero Beach before heading to the University of Florida for a degree in building construction, joined The Lutgert Companies 26 years ago.

Lutgert is a top-notch developer that’s had great success on the Gulf Coast of Florida, completing dozens of major projects in and around Naples, but the company had never built a subdivision on the east coast of Florida.

At some point, Hoyt began to lobby company leaders to seek development opportunities on the Atlantic side of the state – specifically in his hometown.

“It took a lot of convincing,” Hoyt says. “Most people don’t know about Vero Beach, so they were skeptical, but after I got them to come over and look around a couple of times, they said, ‘How did we not know about this place?’”

With company chairman Scott Lutgert and company president Howard Gutman onboard, Hoyt teamed up with Raasveldt and started looking for land.

After several years of effort that included a failed attempt to acquire the old Surf Club Hotel property, Raasveldt zeroed in on the Surfsedge site.

“I heard the town of Indian River Shores was starting to have conversations about selling off this piece of property,” Raasveldt says. “I was patient and attended every town council meeting for about a year where that was on the agenda to get as much information as I could and then shared the information back with Mike and Howard.”

The town had no need for the land – 5.2 acres north of Tracking Station Park – and decided to auction it off to raise revenue. Lutgert spent six months doing intense due diligence prior to the auction, figuring out what to build and how much to pay.

“The property was originally zoned multifamily and approved for 32 units, but when we looked at it, we thought the best use was some type of hybrid, a mix of single-family and multifamily,” Hoyt says.

Working closely with town officials and consulting with Raasveldt, Dale Sorensen Sr. and Matilde Sorensen to come up with the best product for Vero Beach, Lutgert developed a preliminary plan and showed up on auction day, snagging the land for $4.4 million.

That was in May 2017.

Lutgert and the Sorensens unveiled a finished plan for the site with two gala events in December 2018 and the company broke ground in August 2019, after getting the property rezoned as a planned residential development.

Seven months later the pandemic began, throwing the future of the Surfsedge into doubt.

Against the odds, the real estate market quickly rebounded, and the project got back on track, but months of uncertainty still lay ahead.

“We finally felt safe to open the sales center last August, but there were definitely some dog days of summer and fall,” Raasveldt says. “Through August, September and October there were many times when we saw only one or two prospective buyers in a week.

“Traffic finally started picking up in December, and as the model started getting closer and closer to completion, I could feel the energy change.”

With inventory low, buyers flooding in and the model complete, the dam broke on Jan. 18 and all the years of effort paid off.

Raasveldt says buyers have come from all over. About half bought their houses as second homes and half as primary residences. And the homes are actually sold, not reserved. All buyers have put down a non-refundable 10-percent deposit.

There are three models in the subdivision, including 1- and 2-story homes, ranging from 3,017 square feet to 3,513 square feet. The homes will be built simultaneously, making for a busy construction site over the next year or so.

“We expect to be built out in 12 to 14 months with folks living in their homes,” Hoyt says.

Raasveldt’s focus now has shifted to the condominium, which includes 12 luxury units on two floors ranging in size from 2,880 square feet to 3,122 square feet and in price from $2.5 million to $3 million.

The building also includes six garages with 20-foot ceilings, which with a car-lift can house four cars. They will be sold for $65,000-$75,000 on a first-come, first-served basis. Buyers who don’t purchase a garage will have two covered parking spaces.

With the first-level garages that tall, both the second-floor and third-floor condos will have wide-open ocean views over a buffer of seagrape dunes.

There will be a lap pool, fitness center and “really cool rooftop amenity that Vero has not seen before in place of a clubhouse,” according to Raasveldt. “There will be a summer kitchen, hot tub, fire pit, water walls, conversation area and little pet walking area on the roof, all with spectacular views.

“We are kind of flipping the switch on a traditional clubhouse and having something open-air and oceanfront, rather than having something dinky back on the land side where they can play cards.”

The rooftop, pool and fitness center will be for the use of the single-family homes as well as condo homeowners.

“The rooftop amenity helped us sell the houses,” Raasveldt says.

Only one condo unit has been sold so far but the instantaneous sale of the single-family homes once a model was built has given Lutgert the confidence to forge ahead with construction.

“As we have seen from the single-family homes,” Raasveldt says, “if you build it they will come.”