The Anatomy of a Spread: Deconstructing the Casamar Delivery

The Anatomy of a Spread: Deconstructing the Casamar Delivery

A study on the Pompano Beach "Pre-Construction Arbitrage" trade via my Foundations series.

The Executive Thesis: In the luxury market, "Alpha" is often generated not by timing the market, but by arbitraging the timeline. The recent delivery of Casamar in Pompano Beach offers a textbook case study on the "Illiquidity Premium"—the wealth created by locking in pricing before the physical asset exists.

We tracked three specific transactions from the recent delivery cycle (Q3/Q4 2025). The data confirms a massive divergence between Contract Basis (Risk Price) and Resale Value (Market Price), but it also reveals a critical lesson: Not all spreads are created equal.

1. The "Prime" Signal: The 01 Line (Oceanfront Corners)

The "01" line (SE Corner) represents some of the building's premier inventory. Here, the spread between the pre-construction price and the finished market value was most aggressive.

Case Study A: Lower Penthouse 01 (LPH01)

• The Asset: 3,158 SF | Direct Ocean Corner

• The Basis (Risk Price): Closed Aug 2025 @ $4.02M ($1,274/SF)

• The Exit (Market Price): Closed Sept 2025 @ $5.10M ($1,615/SF)

• The Spread: +$1.07M Gross Equity (+26%)

• The Lesson: With 0 Days on Market, this unit sold immediately with a buyer already in hand to pickup the new contract. The end-user paid a $1M premium for certainty—the ability to walk in and see the view and condition today, bypassing the 3-year+ construction risk.

Case Study B: Unit 1101

• The Asset: 3,158 SF | Direct Ocean Corner (Lower Floor)

• The Basis (Risk Price): Closed July 2025 @ $3.18M ($1,009/SF)

• The Exit (Market Price): Closed Oct 2025 @ $4.60M ($1,456/SF)

• The Spread: +$1.41M Gross Equity (+44%)

• The Lesson: This early contract holder captured the maximum "Alpha." By locking in at ~$1,000/SF years ago, they exited at nearly $1,460/SF. Even with 22 days on market, the demand for the finished product absorbed a $1.4M markup.

2. The "Interior" Signal: The 02 Line

The spread still exists for interior units, but the magnitude confirms the "Flight to Quality."

Case Study C: Unit 502

• The Asset: 2,632 SF | Interior/North View

• The Basis (Risk Price): Closed July 2025 @ $2.39M ($911/SF)

• The Exit (Market Price): Closed Nov 2025 @ $3.01M ($1,146/SF)

• The Spread: +$617k Gross Equity (+25%)

The Comparative Analysis: While Unit 502 generated a healthy 25% return, the raw dollar spread ($617k) pales in comparison to the prime 01 line ($1.4M).

• Prime View Spread: ~$440/SF Gain

• Interior View Spread: ~$235/SF Gain

This validates our core investment axiom: In a correcting market, "Generic" inventory stabilizes, but "Prime" inventory accelerates. When buying pre-construction, the "stretch" for the best view offers the highest margin of safety and the deepest liquidity on exit.

3. The "Certainty Premium"

Why did the second buyers pay millions more just weeks later? They paid for Certainty.

• The First Buyer (The Investor): Acted as the "Bank." They financed the construction risk and the time delay (36 months). They were paid the "Spread" for their patience.

• The Second Buyer (The End User): Paid the "Market Price." They bypassed the dust, the delays, and the imagination gap. They paid a premium to have the keys now.

4. The Forward Look: Where is the Next Spread?

The "Pompano Discount" of 2022 is gone; Pompano is now a blue-chip market trading at $1,400–$1,600/SF for new, luxury product on the ocean. The smart money has already moved to the next dislocation.

We are currently tracking two pre-construction opportunities launching in Q1 2026 that exhibit the same "basis spread" metrics and opportunity that Casamar showed three years ago—where entry pricing is currently detached from future replacement cost.

Connect withh me for the 2026 Development Watchlist.