840 Gulf Shores Pkwy Unit 2101, Gulf Shores
Pre-construction Condo Purchase Advantages (and disadvantages)
Some of the buildings I've listed have not been finished. So a word about "pre-construction" is needed. Pre-construction involves purchases before construction begins, or shortly after. The purchase is directly from the Developer. At that point, you are buying a planned condo. There is no deed yet because the condo has not been completed with issuance of a Certificate of Occupancy.
The deal can mechanically differ from developer to developer. But for the Phoenix properties you have a closing where you pay the agreed price and get essentially a contract that says you get a particular condo when the building is finished. At that point, you go through a second, small "closing" where you get a deed and you pay recording fees. Other ways can include a $25,000 "reservation" with a closing about 3 months later. In other words, you are given time to get your finances in order. I've heard that in some past instances a reservation held your spot until the building has been completed.
The term pre-construction is also commonly used for the re-sale of a previously purchased interest in a condo, as described above. This is where the original purchaser sells their interest before completion of the building. There is in fact a healthy pre-construction re-sale market.
So, why buy a condo you can't yet sleep in,... and earn rental income? Because pre-construction prices involve some speculation, also called risk. Early on in development, prices are much lower. The purchaser stands to gain considerable equity when the building has been completed, also even as construction is ongoing.
People have done spectacularly well with these during my time at the beach. For example, an early purchase several years back of a 4BR at Phoenix Gulf Tower from the Developer, Brett Robinson, was for $870K. In about 3 years or so, that purchaser sold her interest for $1.7M! The building was still about a year from completion (it opens June, 2023). The second owner will have gained $300K equity during his year of pre-completion ownership. That condo is worth $2M today, maybe a tad more. That original $870K became 2M!
These two purchasers came out pretty well. But, they had to let their money simmer for a while, earning no rental income in the process. And while this developer has a sterling reputation and proven past success with about 20 buildings here along the Alabama coast, there was still an element of risk. Things can happen.
"Need not be built" is a legal term in Alabama that means what it says. It applies to pre-construction condo sales, and quite literally. The developer can abandon the project with little to no recourse for investors. Can this actually happen? You better believe it. But not in recent memory here and certainly not during my real estate practice, at least as far as I am aware. I'm told of litigation following projects that fell through and some instances where the buyers lost their money. This is why it is critical to go with a Developer like Brett Robinson, and to inquire whether the entire project has been financed.
Of the existing pre-construction opportunities now available, the one I am most excited about is Phoenix Key. It will be the Taj Mahal of Alabama! I look at the 4BR Turquoise prices as indicative of what the premier building will be in 3-4 years. It will have all of the premier luxury aspects, but will be the new kid on the block, so to speak. I predict that a 4 BR at Phoenix Key will have gained a million dollars in value when the building opens.
New Construction Condos

© Baldwin County Association of Realtors, Inc. Information deemed to be reliable but not guaranteed. The data relating to real estate for sale on this website comes in part from the Broker Reciprocitysm Program. Listing broker has attempted to offer accurate data, but buyers are advised to confirm all items. Information last updated on .