5 Questions With Ari Pearl of PPG

With $4 billion of projects in his pipeline, Ari Pearl sees a continued boom for South Florida.

“South Florida is the center of the universe right now,” said Pearl, founder and CEO of PPG Development, which is based in Hallandale Beach, Fla.

The company’s projects include five golf-focused developments in South Florida, along with a 250-unit luxury apartment complex in Hallandale Beach and an office development. Pearl recently caught up with Commercial Observer about being the “only developer in the state of Florida saving golf courses,” as well as South Florida’s housing and hospitality.

The following conversation has been edited for length and clarity.

Commercial Observer: Everyone thought there were just too many golf courses in South Florida, that golf course development had run its course. What do you see in the golf market?

Ari Pearl: That was pre-COVID. Post-COVID, that entire world changed. Before COVID, we were the only developer in the state of Florida saving golf courses. People thought we were nuts. But as a company, and me personally, we have a passion for the game. Not only for the game itself, but for the architecture. 

A golf course is an incredible canvas. People want to be on the water, or they want to be on golf courses. There are actually a very limited number of golf courses south of Boca Raton down to South Beach and Key Biscayne. 

Golf courses pre-COVID were disappearing at the most staggering rate. But they say that COVID did more for the game of golf than Tiger Woods. At every level, from the beginner golfer to the professional golfer, from a golfer that is in a lower income bracket to the mega-wealthy, golf has been propelled to a much higher level than before.

At the Shell Bay Club in Hallandale Beach, the initiation fee is $1.35 million. It’s the highest initiation fee in the state of Florida, one of the highest in the United States and in the world, for that matter. Dutchman’s Pipe in West Palm Beach has a $350,000 initiation fee. We cover the gamut here in South Florida with different levels of golf. In Shell Bay, the demand has been staggering, and we have a waiting list.

What do members get for the $1.35 million initiation fee?

At Shell Bay, we’re selling really well, even in summer months, because the project is unique, because of the amenity package. We built a championship golf course with Greg Norman at the highest level. We have a 48-slip marina. We have a tennis complex with all four Grand Slam surfaces. We have grass, an Australian court, Roland Garros red clay. We have a U.S. Open hard-court surface. We have a pickleball complex, we have a padel complex. We have an amazing members’ spa.

There’s an idea that the housing market in South Florida is slowing, that the multifamily and condo markets are overbuilt.

Our philosophy is we don’t do run-of-the-mill projects. Every project that we do has to be special and has to have a story. We believe that buyers, renters, investors and lenders want to hear a great story behind every development. And we’re not buying the average development sites. Every single one of our projects is unique and has a great story and is in an area with a high barrier to entry. 

Our Palm Aire project in North Miami Beach is a low-rise project on eight acres. It’s literally building a new neighborhood in an area where middle-income residents want to be. It’s super unique, so I’m not looking at all of that high-rise competition that’s around because their rents need to be much higher, and their construction costs are higher.

Speaking of stories, the Altair Hotel is your kosher property in Bay Harbor Islands. Why did you decide to do that project, and what were some of the unique challenges of doing a kosher development?

It’s our smallest project in our entire portfolio. During COVID, that property had come to me a few times. It was on the verge of foreclosure, then went into foreclosure, and there were over 60 groups bidding for it. 

During COVID, that area became very popular amongst the Orthodox Jewish community, very walkable. I just thought that it was a perfect opportunity for the Orthodox Jewish community because of the attention they’d been paying to that area, because of all the kosher restaurants and the synagogues. 

The problem with that property was no one — out of the 60 groups bidding on it — was able to figure out how to take it down. Hotels were closed in South Florida, and no lender would finance a hotel. And this property is not zoned for residential. So, you couldn’t do a straight residential play because it was zoned for hospitality, for transient use. When I walked the property, it just hit me; we could do a condo-hotel concept for the Orthodox community.

I found the lender Arbor Realty Trust, who understood the market because the main principal in Arbor has an apartment and lives a few blocks away. He came and met me on the property, and he understands the market, and he understands that community, and he fell in love with the idea in a minute. 

In that one visit, we shook hands, and he agreed to finance it. We actually paid off the loan within six months because of the success of the sellout. We’ve sold 86 out of 96 units there.

What is your biggest challenge?

Making sure that we stay focused on the projects that we have — because we have $4 billion of projects in our pipeline. We had the pandemic, we had all of the political noise from the campaigns, rising interest rates. These are all things that are going on in the world that we can’t control, but we just stay focused on our projects and on the narrative of each.

We don’t have any major challenges as a company or as developers; South Florida is the center of the universe right now. We’re seeing an influx of money from California and people moving from California, more than we’ve ever seen in the state of Florida. California is exorbitantly expensive for what you’re getting there. For young families, it just doesn’t make sense anymore. And the politics have just made it extremely, extremely difficult.

Jeff Ostrowski can be reached at jostrowski@commercialobserver.com.