A unique spec house has just come on the market at 980 Crescent Beach Road in Castaway Cove that may be the start of trend.
Joe Foglia bought the worn-out oceanfront property in August, but instead of doing a cosmetic rehab and reselling it, or tearing down the existing dated home and starting from scratch, he used the shell as the basis for what amounts to a new home.
There is nothing unusual about buying an older home, fixing it up and reselling it; what makes this project different, a spec home instead of a remodel, is that Foglia took the interior back to the block walls and trusses and completely rebuilt and reconfigured the house using luxury custom home materials and systems, giving it a stunning modernist look and adding enough value to make the six-month project well worthwhile.
Foglia says he was attracted to the project because he wanted to get back into speculative development after several years of building large custom homes on the island. Most builders got burned on their spec houses when the market crashed in 2007 and there has been little speculative building on the island since then.
Foglia has done well as a custom builder, often in partnership with Vic Lombardi, building the 18,000- square-foot modernist home at 3400 Ocean Drive, just south of the Jaycee Park boardwalk for businesswoman Katherine McConvey, and nearing completion on a 40,000-square foot house in the estate section, which is the largest residence on the island by a big margin. But he was itching to get back into development.
“I got to the point where I felt I needed to do something else besides working for people on their land, to stay busy and be more diversified. I liked this property because it is in Castaway Cove, which is great neighborhood, and because it has such a deep oceanfront lot. I probably would have paid $1.9 million for the lot without a house on it.”
As it happened, Foglia paid $2,150,000 for the property and has sunk well over a million into the reconstruction. “I put a fortune into this place,” he says, shaking his head. “That new stainless steel staircase is the most expensive staircase I have ever put in a house. It alone cost $47,000.”
On the plus side, by reinforcing and reusing the existing shell, Foglia shaved nine months or more off the project time, allowing him to turn his money around much faster than if he had started with a teardown or an empty lot, presuming the home sells in a timely fashion.
“If time is money, it is much quicker to buy an existing home and rebuild,” says Buzz MacWilliam. “Builders tell me it takes a year to complete architectural design, engineering and permitting for an oceanfront home. I think we will see more and more [projects like Foglia’s] . . . not just on the ocean but in other residential areas, on the riverfront, on golf courses and in Central Beach.”
Businessmen often look at deals in terms of how much return they can get on their capital how fast, and it is that formula that could make this new type of spec house trendy. Getting a job done quickly also reduces net costs if a builder is operating on borrowed money.
“If you are borrowing at 4.5 or 5 percent, turning the project around nine months faster makes a big difference,” Foglia says.
A shortage of oceanfront and other inventory on the island is another potential driver of a new-type spec home trend.
“I know for a fact we have half the inventory on the barrier island we had two years ago,” says MacWilliam. “That is forcing people to get creative.”
One possible disadvantage to a rebuilt spec home is that some buyers may have their heart set on totally new construction, but opportunities for that type product on the ocean are extremely rare on the island at this point and the quality of Foglia’s work is probably sufficient to overcome any such objection.
He and his crews not only took the interior back to block, they then reinforced the block walls, adding steel rebar and filling more hollow cells with concrete to make the structure stronger. He re-strapped the trusses put on a new roof and added key exterior features, including a newly-designed front entry with what he calls “the most expensive mahogany door you can buy,” and a new roof over the ocean-facing balcony in back. He also expanded the kitchen and incorporated what was a sunporch fully into the house while still making it possible to open the entire area up in nice weather.
The reconfigured open-floorplan interior is rich in natural stone, Venetian plaster, exceptional doors, millwork and tile. And then there is the stainless steel and glass staircase, the signature piece that set the tone for the rest of the home.
“The guy that built that is an artist,” says Foglia. “He did a lot of the metalwork for me at [the McConvey residence].”
The house, which is being sold with brand new furnishings, sits on a deep lot with 100 lineal feet of frontage on an accreting beach that gets wider each year. It has 4,200 square feet of air-conditioned space and 5,500 square feet under roof. Just completed, the home comes with a full one-year builder’s warranty. Listed for $3,995,000 with Cindy O’Dare and Clark French of Premier Estate Properties, it is available for viewing by appointment.
“I am looking all down the island, from Central Beach on south, for another one like this that we can work on,” says Foglia.
