Is Azalea Commons, an enclave of three new West Indies-inspired homes clustered under an old oak canopy three blocks from the ocean, the future of Central Beach?

Vero Beach developer Bob McNally and his Douglas Elliman broker Sally Daley think so.

“We feel this is the future because it is reflective of the architecture and lifestyle the consumer now wants,” says Daley, of the new Central Beach residences that will go on the market this week for $4,875,000.

“We hear two things over and over from buyers,” says Daley: “‘I love Vero, but everything is so old. What do you have that is new?’ And, ‘I really want to be close to town,’ which is why you see a disparity of values east and west of A1A.”

In Azalea Commons, you have brand new homes a block or two from The Tides, Chelsea’s and Casey’s, and within easy walking or golf cart distance of all the other restaurants, shops, resorts and cultural amenities in Central Beach. The ocean is a mere 600 feet to the east.

“These are open-concept homes with flexible spaces where you can age in place. They are sensitively designed to fit into the natural world beneath an old oak canopy. They are brand new and up-to-code with the finest contemporary finishes and fixtures but also harmonious with the rest of Vero.”

In many cases, lots in Central Beach have become too valuable for the small, dated houses that occupy them. With Florida’s stringent building codes, remodeling 40- and 50-year-old homes in a way that captures the attention of buyers while also maximizing the value of the land is increasingly difficult.

Prices have literally gone through the roof in Central Beach in the past four years and that process is ongoing. The price future of the area can be seen in Naples, Florida, a city Vero is often compared to in discussions about island real estate.

Look on Redfin or Zillow at the beachside residential section there, north and south of Naples’ Central Avenue, and you will see the small blocks studded with homes on dry lots – six and eight blocks back from the ocean –  priced between $4 million and $10 million, with outliers over $20 million.

McNally, who has built approximately 300 custom homes, follows the market with a magnifying glass.

“What I have seen over the past 18 months is that a knock-down in Central Beach is going to cost you $1.4 million to $1.6 million, all day long, assuming it is on a decent lot that can be redeveloped,” McNally told Vero Beach 32963.

“Meantime, construction costs are up 42 percent over the past three years, and it will cost $700 to $800 a square foot to build a new home like this. Add that up and at this point a one-off custom home in an established Central Beach neighborhood comparable to these houses would be a million dollars more than our price.”

McNally is able to offer his new houses at a lower cost because he bought the land for the small development more than three years ago, paying $1.9 million for all three lots before island property prices doubled. That gives him a land cost of about $630,000 per home, an enviable  place to start.

Buying multiple lots and building all three houses at the same time, as McNally and his investors elected to do, brings another big advantage for buyers, according to Daley.

“I can’t overstate the value of buying in an enclave like this,” she says. “If you build a one-off in an existing neighborhood, you don’t know if neighboring properties are ever going to be developed in a way that supports your value. You don’t know what is coming.

“Here, you have three architecturally similar houses that fit together beautifully and have equivalent values. You don’t have to worry about construction on an adjacent lot a year from now,” or an old, worn-out house next door depressing value of your new home.

Building an enclave instead of a one-off also allowed McNally to create a mini neighborhood occupying much of its block, where he preserved the oak canopy and pushed garages to the rear of the lots where there is a common “alley.”

“This is zoned single family, and everything is supposed to empty out onto Azalea, but doing it that way would have meant tearing out the old oaks. I am a tree-hugger and didn’t want to do that, so I went to the city for a variance, which was unanimously approved by the planning board and city council.”

McNally’s New Urbanist move makes the houses much more peaceful and private in front, with mature landscaping and a gently curving sidewalk instead of a neighbor’s boat or big truck parked in a driveway.

Because of the eco-sensitive layout and investment in landscaping, the brand-new houses look like they have been in the neighborhood for years.

“Bob has a beautiful knack of understanding what fits the land and making things look like they were always there,” says Daley. “He designs and builds to improve not just the lives of the people who live in the house but to improve the overall neighborhood.”

The neighborhood was at the core of McNally’s thinking as he conceived the project.  “We are selling the neighborhood as much as the homes,” says McNally.

At the same time, the quality of the houses is at the core of the value proposition, and they fully live up to Daley’s description of them as “custom homes which just don’t have owners yet.”

“The quality of the craftsmanship, materials and design are on the level of a custom home more than a typical spec house,” she says.

Marble and walnut floors, 10-foot sliding glass doors, extensive millwork, Sub-Zero and Wolf appliances, concrete roof tiles with copper flashing and mature landscaping are examples of the custom quality.

“Those concrete tiles will basically last forever if you take care of them,” McNally says. “The ones on my house are 65 years old and in great condition.”

The elaborate trimwork, which is one of McNally’s calling cards, is fit, in his words, “to a gnat’s eyelash,” and feels smooth as glass to the touch, with four coats of paint, each one finely sanded before the next coat is applied.

“Our goal is to build a classic product that will wear well for decades, not a trendy one,” McNally says.

“All the houses are built to the same quality and have the same style architecture, but each one is a little different,” Daley adds. “They are more like cousins than identical twins, which we think buyers will appreciate.”

“Bob has a great track record and builds a high-quality product,” says ONE Sotheby’s broker associate Cindy O’Dare, who knows the high-end island market as well as anyone. “I think they will do well with that project.”

The westernmost house, at 765 Azalea, has three bedrooms, including an ultra-luxurious, first-floor owners suite, a large sunny office, an L-shaped great room/kitchen/morning room space that opens onto a large, covered lanai and has views of the back garden and swimming pool. Both upstairs bedrooms are ensuite and there are spacious covered balconies front and back.

One lot to the east, 775 Azalea has a similar floor plan, with three bedrooms and 3.5 baths, but is slightly larger. It will be listed this week for $4,985,000.

785 Azalea, which borders Eagle Drive on its east side, has a courtyard configuration with a detached office/cabana, three bedrooms and three bathrooms, along with a great room, morning room, upstairs family room and two-car garage.

The house at 765 Azalea is complete in every precise and polished detail and the other two homes will be finished by the end of the month – which is by design.

“October has always been a good month for me for selling my houses,” says McNally, who besides being an accomplished developer is a hands-on builder, handling all negotiations and planning with clients and walking his jobsites each day. “I think this October will turn out that way, too.”