One Bal Harbour Condo Closings Appear to be Troubled

December 28, 2007 by Lucas Lechuga

One Bal Harbour

Last week, a client called me to let me know that he would be flying into Miami Beach and would specifically like to take a look at One Bal Harbour. He wanted to schedule a showing for Monday afternoon. I contacted a WCI agent today to find out if we could get in to see some units on Monday. I was told that WCI has decided to take a holiday leave until Wednesday. Unfortunately, my client will be flying back to Canada on Monday evening.

After hearing this, I was thinking to myself “Wow! WCI must have closed a lot of condos these past couple of weeks in order to take a vacation”. I was curious to find out what their latest closing rate was since closings began on condos. I got back to my office and checked it out. The following graph reveals that 33.51% of units have closed at One Bal Harbour. December 8, 2007 I revealed that only 23.24% of units had closed since November 16, 2007, the first day that closings began.

One Bal Harbour

Does this look problematic to anyone else? If I were a developer in this position I would be holding 24/7 open houses and not taking a holiday leave. Oh well…my client will return in a few months when those who do close are really struggling and condos will be much more aggressively priced. We’ll see if WCI can remain afloat until then. It looks like prices at One Bal Harbour will only go down over the next six months.

The most humorous quote to me was Realtor Linda Gustafson saying in an article published on August 17, 2007 that she was “very confident that every single unit will close”. I hope she meant eventually every condo will close. If she meant that every contract holder will close then I think she was being way overly optimistic.

The closing rate cited above was obtained from public records.  There can be a 2-3 week lag in getting a closing recorded although most closings are records within the first 7 days.  

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54 Comments on "One Bal Harbour Condo Closings Appear to be Troubled"


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Anonymous
BFG
8 years 9 months ago
“Realtor Linda Gustafson saying in an article published on August 17, 2007 that she was “very confident that every single unit will close”” I don’t know why real estate agents even say things like that any more. All they are doing is setting themselves up to look like fools later on. Nobody in their right mind could possibly think that One Bal Harbour will have anywhere near a 100% closing rate. In that same article where she is quoted, they also mention that nearly half of the buyers were speculators. Meaning that a huge portion of the “buyers” weren’t really… Read more »
Anonymous
ana
8 years 9 months ago

it amazes me how realtors can be so proud, the conditions across the country are very unstable, has anyone been paying attention to wall street? especially with the numbers today.

Anonymous
8 years 9 months ago

One Bal Harbour IS a great building and IS a great project but the facts are the facts. How can they remain so rigid knowing the conditions of the market place?

It’s with quotes like those that agents loose credibility, no doubt about it.

Anonymous
fuled
8 years 9 months ago

You seem to have all these clients contacting and visiting from abroad. You are so fortunate.

Anonymous
Perez
8 years 9 months ago

I don’t know the total number of units, but closing on 1/3 of the building in only 6 weeks sounds pretty good to me, and may pick up after the new year. Regardless, someone should have been made available on a Monday to show the units.

It has a very unique location, but it seems like you’d have to get in your car to get anywhere. Maybe your client would be interested in Canyon Ranch in North Beach, with similar amenities, but more commercial diversity within walking distance.

Anonymous
8 years 9 months ago

i heard the slow closing is due to the issuance of COO which has been delayed. is this still true?

Anonymous
8 years 8 months ago
I’ve been inside One Bal Harbour several times and it is one of the best new condominium developments. However, I am concerned about the closing rate. Perez, closing on 1/3 of the units within 6 weeks normally would be okay given the state of the market. However, WCI gave everyone a closing deadline the first week of December. I think the deadline date was December 6, 2007. That means that everything is basically said and done. I know a few people who have been able to get extensions but those extensions are going to be expiring by the end of… Read more »
Anonymous
OBH Investor
8 years 8 months ago
I’ve been looking at OBH for over several months, beginning with Lucas’ add in late September. It is truly the best condo in Miami and the hotel units seem attractive to a New Yorker like me who will probably use it 3 or 4 weeks a year tops. But once I started digging into WCI, it becomes clear this company is 3 months away from bankruptcy. The CFO promised closing all of the condo units by late December and hotel units by early January. According to his statements late last week, they supposededly closed approx 100 units and wont even… Read more »
Anonymous
8 years 8 months ago

Just saw Fight Club last night, and just adapted a very memorable quote (the survival rate one) from the movie.

“In a long enough timeline everyone [condos] closing rate increases to100%!”

Anonymous
Bill
8 years 8 months ago

This interesting piece was in the New York Times last week:

http://www.nytimes.com/2007/12/26/business/26real.html?pagewanted=1&ref=patrick.net

Anonymous
BFG
8 years 8 months ago
From the article linked to above: “The market changes have forced a third developer, Mr. Pérez, who has built 50,000 condos in Miami over the last decade with Related Group, into a defensive position. Now he is battling a lawsuit from buyers of 38 apartments at Harbour House and 26 condos at Biscayne Bay. His company is operating in emergency mode. He has set up a team to raise capital to buy back apartments that he expects buyers will not close on…” Guess this sheds more light on what he is really doing with this “vulture fund” he is supposedly… Read more »
Anonymous
Bill
8 years 8 months ago

Lucas..

Do you have the original pre-construction prices for the One Bal Harbor units? If so, would you please post them or I’ll send you my email address if you prefer.

Great blog and info!

Anonymous
8 years 8 months ago

Bill,

On the right hand side of this blog you will find a section that says “File Sharing”. In there you will find a file called “One Bal Harbour pricing sheet Dec 2003”. I think sales began in the summer of 2003. While that price sheet won’t give you initial prices it will give you an idea.

Anonymous
Bill
8 years 8 months ago

Thanks Lucas.

Anonymous
David
8 years 8 months ago

I have been looking for some time to purchase in the Miami, South Beach, etc. area, but with personal experiences similar to the one mentioned by the prospective buyer of One Bal Harbour, I will just “sit tight” for a while. I can afford to wait. How long can you (developers/sellers) afford to wait??

Anonymous
AlaBill
8 years 8 months ago

Looking at the Dec 2003 One Bal Harbour sheet and comparing it to present listings, it appears current asking prices are around 10% UNDER

Anonymous
AlaBill
8 years 8 months ago
sorry… did not mean to hit submit… …it appears current asking prices are aroung 10% UNDER the 2003 price sheet and that’s with about 35% of the units close. Assuming 50% of the units or so do eventually close at the pre-purchase price, what do you expect the eventual prices of the remaining units to sell for? It seems probable to me that many of the current closings are being made hoping to resell. If WCI reduces the prices of the unsold units then won’t that put pressure on the price of the sold units as well? In any event,… Read more »
Anonymous
Marcus Bui
8 years 8 months ago

Hi Lucas,
Thanks for all your efforts . Love your blog, and I always know where to get the right info.
I would love to get one of these units at OBH, can you represent me? I know from your earlier blog that you represent buyers at auction. Do you think some of these units will go to auction since the development appears to be in trouble based on your stats? what do you think is a fair auction price and how much off the current price will they bring at auction?
Happy New Year!
Marcus

Anonymous
Marcus Bui
8 years 8 months ago

Oops I forgot, what do you think of the cond-hotel section versus the residence as an investment. They are I understand the same building? How do you think the condo-hotel is going to do?

Anonymous
perez
8 years 8 months ago

WCI is also the developer of Mosaic on Miami Beach. Most closings took place from 12/06 to 9/07. According to their website, they have only one more condo to sell. It seems they didn’t have too many walkways and were sucessful. Does anyone have any insight into this project?

http://www.wcicommunities.com/default.asp?pageID=home&siteID=53&vid=53_6&url=www.mosaicwci.com&col=0

Anonymous
8 years 8 months ago

Perez,

Mosaic is a fantastic project. However, the market has changed dramatically over the past 1.5-2 years. I think One Bal Harbour is nicer than Mosaic and should eventually become a better long-term investment. OBH, unfortunately, was complete at the wrong time and a lot of the purchasers were speculators.

Anonymous
Julian
8 years 8 months ago

Except over half of Mosaic’s condos are on the market!! Drive past it…empty.

WCI flop.

Anonymous
8 years 8 months ago
One of the things we have to keep in perspective is that not every building or location is created equally. Usually every different area of South Florida has a few stand-out properties. Also some buyers are specific about their location requirements – close to work, family, etc. No matter what the price, not many people would want to buy in Bal Harbour if they work in Downtown and vice-versa. It would be nice if the media did a better job of segregating all of the areas in terms of “condo units hitting the market.” I believe all of the units… Read more »
Anonymous
JT
8 years 8 months ago

Spoke with WCI, and was told most units will close (anticipated 95% close rate.) More than 50% of the units have closed already. Maybe the buyers/speculators do not to lose their deposits. I have seen a lot of resale listing so maybe the buyers are closing on the units and have relisted them.

Anonymous
RA
8 years 8 months ago

I think the important thing to remember is that these units are just about 1million bucks!

Let’s face it Millionaires just don’t pop up to buy condos or atleast not everday so you gotta expect that it will take some time to find people with this type of money and willing to buy in that property. We walk around everyday and how many people do you know personally who are millionaires. Bottom line the majority of incomes mostly middle class inventory is what should get absorbed at a faster rate vs the million dollar properties.

Anonymous
Julian
8 years 8 months ago
The listings have been on for ages, so they are not to re-sell! You’d have to be crazy, even a cash buyer like myself wouldn’t close. Forget about depreciating asset or not, but you have locked yourself into an almost wholly illiquid asset at almost any price except a fire sale for probably a time period of between 1 and 3 years. Unless you expect the $ to appreciate, or the real estate value to be significantly higher in 3 years than your price today and with holding costs, your opportunity cost is too big. Unless you genuinely have money… Read more »
Anonymous
John Boyle
8 years 8 months ago
My name is John Boyle and I am very proud to say that I have been with WCI Communities for six years and am dismayed at the negative comments that are made in this blog about One Bal Harbour that are completely baseless. I was a part of the pre-construction sales team at One Bal Barbour and Linda “G” was the top producer for three years running. WE KNOW THIS PROJECT like no one else. Here’s the skinny. .. We are closing units daily and have now closed well over 2/3 of the building. I personally give 8 to 12… Read more »
Anonymous
8 years 8 months ago

As I’ve mentioned in previous posts about closing rates, there can be a 2-3 week lag in getting a closing recorded although most are recorded within the first 7 days. I did not get these numbers out of thin air. I obtained them from public records. At the time of this post there were 62 closed sales that were recorded. There are now 90 closed sales, or a 48.65% closing rate. There may in fact be more closings if there has been a delay in recording the closings with the county.

Anonymous
One Bal Harbour Insight
8 years 8 months ago
Lucas, Why don’t you post some accurate up to date information, instead of posting out of date information with a chart that does not reflect the current closing rate. Your damaging the building and other buyers property values, and WCI share value by such inaccurate information you insist on posting, now with a disclaimer warning people that the information is out date. So what is the purpose of posting out of date information, whom do you have an axe to grind with? I hope the condo association sues you, if WCI and Regent does not first. Maybe you should refund… Read more »
Anonymous
8 years 8 months ago
OBH Insight, I guess you expect me to provide you with a daily update to that post. I wrote the post on the 28th so the information is dated now. Take it in the context of the date that it was written. When posting closing rates for other buildings in the past I have always stated that closings can take 2-3 weeks to be recorded. People who regularly read my blog know this. It isn’t a sudden disclaimer that I just added. Most closings are recorded, however, within the first 7 days. Although the information may be a bit lagged… Read more »
Anonymous
BFG
8 years 8 months ago
Looks like Mr. Boyle has been posting the same message wherever he finds negative comments on WCI: http://tinyurl.com/2uunkq I don’t think anyone is doubting the quality and location of OBH. But saying things like OBH is “immune to the Real Estate downturn in Florida” gives everything else in his message less credibility. Nothing is “immune” to a terrible market. Maybe WCI will be lucky with this one and get a high closing rate. But I doubt the default rate will be in the single digits, as suggested. I think that Lucas is taking the correct approach and simply reporting the… Read more »
Anonymous
RA
8 years 8 months ago
I have to agree with the posting This blog has done a great job is highlighting how great OBH is. No one denies that. I just think Lucas is correct in showing his information that is made public. Obviously he is very clear to state that that is the information from public records at the time he posted it. And goes far enough to say that there is that lag in documenting the closings from the City. However, to critize him is ridicoulous. He does a great job and I think eveyone is gettign upset because if you read it… Read more »
Anonymous
Perez
8 years 8 months ago
I think any blog would benefit from the input of insiders like John Boyle. We should appreciate his input. Lucas was reporting on a snapshot of what the public records indicated about the closings. There was no factual errors. In his opinion the closing rate was slow. If you’ll read my prior comment, I didn’t agree with him, but that’s Ok. We all benefit from the transparency of information; opinions may differ on the facts. This blog tracks closing of various projects and I personally was looking forward to an update some time in the future. But if anyone wants… Read more »
Anonymous
8 years 8 months ago

Mr. Boyle: I think it most unfair of you to attack Mr. Lechuga for reporting the facts as he saw them on the date of his post. If you are correct, the facts will be there for all to see. You have nothing to fear from anyone that maliciously or otherwise doubts your success. If OBH is a success, I am sure you will look back on all of this and have a good laugh on those that doubted it. In the meantime, there is nothing wrong with this blog following the developments and reporting them truthfully.

Anonymous
Julian
8 years 8 months ago
Let’s be honest though. If Mr Boyle’s statements were verifiable and true then the banks would be happy to negotiate the new loans because the cash to repay them would be in the bank. Instead they get week by week waivers. I.e. they are watching and waiting like we are. Further, if this is material non-public information that Mr Boyle is publishing (I think it is – it probably determines the future of WCI) then Mr Boyle should watch his door for an SEC notice and his managers at WCI should suspend him. In addition, if the information is public… Read more »
Anonymous
8 years 8 months ago

Now that its all over the news that WCI is goi ng under what is the verifiable closing rate on OBH?

Anonymous
8 years 6 months ago
We have been working on upgrading a condo in OBH since the first week of December and thanks to the help of the management office, the city of Bal Harbour and WCI., we were able to complete our quickest renovation to date. Don’t mistake my generous complements with the inability to identify a building that does not stand up to its hype. We have worked in many “luxury buildings” and its actually when you need to get something done that service is really put to the test. Getting the subcontractors in and out of the building was a breeze, however… Read more »
Anonymous
Regent Pulls Out of Boston, Battery Wharf
8 years 2 months ago

Bal Harbour next, what have you heard?

Anonymous
john smith
8 years 1 month ago
Has anyone seen the Regent and WCI what they are doing to current owners? The have failed to disclose fees, and quarterly charges. Owners are now at a brick wall…8,000 for advertizing, Administrative “COSTS” over 5000.00 and so many pumped up, over inflated (Maid service $175 to make up a room? I doubt the maids are piad 10.00 a hour and it would take more than a hour to do a general room make-up). WCI has filed for BANKRUPTCY-meaning they are looking for anyway to collect monies un-ethically-especially in concert with the Regent management. If anyone has just gotten their… Read more »
Anonymous
Tim Hamilton
8 years 1 month ago

I just got my statement. I have a studio condo and am shocked at the undisclosed fee that I received…$177.00 per night for maid serive….over $7,000 for marketing, $3,000 for admin fees? The list goes on and on. We need to get together in a class action suit. We cannot let them get away with this! We will never make any money in the rental program….we will owe money. WCI is in trouble and must show high recievables on their balance sheet…we are the scapegoats….e-mail me at timothyflorida@yahoo.com asap!

Anonymous
Lucas Lechuga Puts Nail In Coffin Of WCI
8 years 1 month ago
Way to go Lucas you really put the nail in WCI’s coffin on your blog, One Bal Harbour and Regent Hotel. Millions of investors around the world were alerted to WCI going bankrupt before they did, and the many valid issues about One Bal Harbour you pointed out. Glad to see you were able to steer investors and prospective buyers around the world on your high profile influencial investment blog, http://www.miamicondoinvestements.com away from a property and company with so many serious issues. I am sure Tim Hamilton wish he had not bought at One Bal Harbour. I might add that… Read more »
Anonymous
Three Star Rates at The Regent, Bal Harbour
8 years 1 month ago

John,

Seems like they are giving away room rates at 3 star prices. $265 dollars a night is certainly not a 5 star rate. I think that is less than the Marriott on south beach.
Who sets those prices? Or maybe we should ask, who gives away the rooms at such cheap prices so the losses are so steep?
for your info follow the link below:

http://www.regenthotelsmedia.tekgroup.com/article_display.cfm?article_id=403

Anonymous
Regent Pulling Out of One Bal Harbour?
8 years 1 month ago
What have you heard? Regent pulled out of Battery Park, Boston after nearly 6 years being affiliated with the project. It is now opening in August/September as the The Hotel at Battery Park; A few years back Regent pulled out of South Beach after approximately 9 months; Regent pulled out of Winter Park, Florida high end highly promoted condo and hotel deal; Regent Costa Rica project was highly advertised on regent’s website. Now it is off the website, is this one gone too? Oh, I think Regent pulled out of the Regent Beverly Wilshire Hotel, such a nice hotel, what… Read more »
Anonymous
Once Again
8 years 1 month ago

I think these hotels ar estarting to be more of a marketing ploy more than anything.

Think about it. They use the Regent or other other name such as St regis etc…to intrique you to buy into a project and then a few month later they pull out an dyou’re stuck with a no name hotel project.

Sounds to me they may be benefitting from the franshise naming right fees and then have the option to pull out.

Seems a bit shaddy!

Anonymous
Un-Related
8 years 1 month ago
Once Again said: “Think about it. They use the Regent or other other name such as St regis etc…to intrique you to buy into a project and then a few month later they pull out an dyou’re stuck with a no name hotel project. ” Not exactly. Condo franchisor from the high-end names like Regent, Four Seasons, Ritz Carlton, etc. generally make every effort to keep their names off of condo-hotels. When they do permit a franchise, the rules are extremely tight and the use their legal exits to pull out.They make way more money franchising a property to a… Read more »
Anonymous
WCI and One Bal Harbour
8 years 1 month ago

Unrelated,

Regent does not own anything at One Bal Harbour, they are just operating/managing the property. WCI Communities is the owner of the actual hotel/condos and then of course the other owners. Anyone know how high the maintenance has shot up?
Based on prior posts and it’s history Regent does not seem to be a reliable operator, ie. announcing then pulling out of properties. Thoughts?

Anonymous
Un-Related
8 years 1 month ago

WCI and One…

I realize that regent is only the franchisor of the property involed at Bal Harbour. IThe employees of the property are employees of the franchisee (the owner(s)…

Anonymous
Regent Hotel at Bal Habour Scores 1 1/2 stars out of 5
8 years 1 month ago
The new restaurant One Bleu at One Bal Harbour-Regent Hotel seems to have blown it. It had a scorching honest review of how bad the restaurant was. Uneatable food and 30 minutes between servings. One diner of two had to wait 30 minutes for the other diner’s food to arrive. Just an example. My opinion and prediction is the restaurant closes down and the Regent leaves. I ate their and the food was uneatable one month ago. Glad to see the word is out at what a sham the regent is running in bad service and food. On top of… Read more »
Anonymous
Regent Hotel at Bal Habour Scores 1 1/2 stars out of 5
8 years 1 month ago

The review mentioned above was a full page in the Miami Herald, August 15, 2008

Anonymous
New One Bal Harbour Lawsits Filed...
6 years 3 months ago

This is a great blog. What about the new lawsuits filed. Including mold in condos. The building before was torn down because of mold contamination. Wow! A repeat?

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