In the News

ZUCKERMAN GROUP EXPANDS OPERATIONS AND GEOGRAPHY

Florida Real Estate Journal

Zuckerman’s growth runs in the family.

The Zuckerman Group may not be the biggest South Florida home builder, but it is one of the oldest. The family owned company, celebrating its 80th anniversary this year, is made up of three generations and includes not only, Zuckerman Homes but its own mortgage company.

Last September, Coral Springs based Zuckerman homes bought 50 acres at the Medalist golf course development in Martin County, where the ' company intends to build the 87-home Medalist Country Club Estates and Spa at Hobe Sound, one of the most upscale of the Zuckerman developments.

At $25 milIion, the land in Hobe Sound was expensive, but well worth the price, said Andrew Zuckerman, president of Zuckerman Homes. All of the infrastructure is in place, and there is a fully developed clubhouse. The Medalist Golf Club and accompanying spa is known worldwide in golfing circles, he said. Plus, it is surrounded by, 80.0 acres of a nature preserve. "'The land is pristine," said Zuckerman.

In 2003, Zuckerman Homes had a sales volume of $45million. This compares to only $20 million in 2002. "We, expect to do even better in 2004," Zuckerman said.

Zuckerman Homes is purchasing the land at the Medalist development in stages (thanks to a rolling option), beginning with an initial payment of $2.35 million. In this way, said Jack Winston, senior consultant at Miami-based, Good¬kin Consulting, the company can buy land only as it needs it.

"It is not easy for the smaller merchant builders, such as the Zuckerman Group, to compete with the large merchant builders," said Winston. "The small builders are custom builders, who build very expensive homes, a market which many large companies don't deal with," he said.

At the top, there are big public companies like Lennar, Centex and Toll Brothers who have a broad range of market areas,” said Winston. "Lennar develops in all brackets; Toll Brothers is only in the higher end,” he said. In the middle are the mid-sized builders” who cherry pick the narrow price points” that the larger builders do not focus on, said Winston.

Master developers sell off pods in major developments to mid-sized builders like Zuckerman, who want only 50 to 125 lots, said Winston. In contrast, the major builders buy large tracts of land, do the development work, and build all of the product,” said Winston.

Zuckerman Homes has current projects in West Palm Beach, Naples and Martin County, among other locations. The company is going where the market is, said Winston. As South Florida approaches buildout, there is no choice but for home builders to look beyond the region. Zuckerman builds moderately-priced units as well as luxury homes. At the higher end, the Medalist development will feature homes priced from the upper $700,000s to $1.5 million.

In the Naples area of Collier County, Zuckerman is developing Mariposa at Whippoorwill, a 180-unit development that broke ground Feb.1. It will feature town homes and coach homes which are condominiums with separate garages. They are selling for $200,000 to $300,000.

At Andros Isle, a master planned community in West Palm Beach, Zuckerman Homes is selling single-family and attached homes. At Brittany Bay at Andros Isle, homes sell for between $200,000 to $350,000, and at the Estates at Andros Isle, single-family homes sell for between $300,000 and $500,000. Both developments are scheduled for completion by April, Zuckerman said.

At Ibis Country Club, a large, master-planned development in West Palm Beach, Zuckerman recently finished two small communities: The Legends Club with about 30 units and Monte Verde with 20 units. A third section, Terra Lago ,a development with 53 single family homes priced from $375,000 to $550,000, is still under construction.

Other Zuckerman developments include Summerfield in Stuart scheduled for completion in about a year, and The Reserve at Windemere in Jensen Beach, also in Martin County, which was recently completed.

In October, Plantation-based Metropolitan Financial, a Zuckerman Group subsidiary and the company's mortgage arm, which placed about $130 million in mostly residential financing since it was established in 2001, received a state license to open Cooper-Horowitz of Florida, a branch of the New York-based mortgage broker specializing in commercial lending.

Branching out into commercial lending is a natural adjunct to The Zuckerman’s Group's business, said Andrew Zuckerman - whose uncle, Barry Horowitz, owns Cooper-Horowitz. In New York, the company brokers almost $5 billion a year in commercial mortgages, he said. In South Florida, said Larry Zuckerman, president of Metropolitan Financial and of Cooper-Horowitz of Florida and brother of Andrew Zuckerman, the company plans to make commercial loans of $5 million and over.

In October, Plantation-based Metropolitan Financial received a state license to open Cooper-Horowitz of Florida.

Cooper-Horowitz of New York has done financing for some of the largest developments in South Florida, including $54 million for the Bay Club of Aventura a luxury rental development, $51 million for the Streets of Mayfair, a mixed-use project in Coconut Grove; and $47 million for Brickell Key II, a high-rise residential development in downtown Miami.

Currently, Metropolitan financial and Cooper Horowitz of Florida have about $400 million in deals in the .pipeline for both residential and commercial mortgages, said Larry Zuckerman.

Even prior to teaming up with Horowitz, the Zuckerman subsidiary did some commercial real estate loans in the past three years, although the primary focus has been residential, he said.

Having a brokerage arm is more than a convenience for Zuckerman customers, Winston said. "Their customers have to get mortgages anyway, so the builder gets the fee instead of another mortgage company," and thus the company has another profit center. "It is unusual for a company the size of The Zuckerman Group to have its' own mortgage company, Winston said.