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This will be an interesting one to watch for sure. The more details the better. If it is a true arms length transaction then I would be surprised to see some fire sale prices here. Sub $200/s.f.???
– All the macro econ indicators continue to show cliff diving: higher unemployment, higher strip mall vacancies, major commercial mall construction/renovations starts DOA for years, $2T pullback over the next 12-18 months in credit card consumer credit, massive worldwide wealth destruction, deflation, consumer spending down, mortgage equity withdrawals DOA, there simply is nothing left to prime the consumer credit pump. The credit bubble has burst, time to move on.
“I wouldn’t be surprised” – oppps!
wow! a prime location on the bay must do a bulk sale. this does not bode well for many of the buildings in brickell which are not bay side. cant wait to hear the price. i assume this bulk sale exceeds 10% of units, so they may have just locked out the building from standard mortgages, for all intents and purposes. sucks if you own there and are going to try and sell-you wont even be able to sell at a loss because nobody can buy into the building. from the sale price, we can also get an estimate as to the future rental rates for bayside units.
No doubt AJ bought these to help prop up the market for 1800…….ROFLMAO!!
Lumping all your eggs in one basket is never a successful real estate method. Now your getting the Stupids from other countries. I bet this investment group doesn’t have much experience being an American landlord.
PHIL ………………..is that you?? Not Phil from Toronto…..are you PHIL from THORNHILL?????If you are…..DO I HAVE A DEAL FOR YOU.
only: Phil from Toronto…but not Thornhill..I lived in downtown Toronto. I must be a different Phil than the one you know. : )
Phil….Good luck in your search for a winter get away.there are all kid’s of GOOD Deal’s coming onboard everyday.I’m looking myself and the price’s keep Dropping & Dropping.
only spec…good luck to you too. Yes prices have dropped a lot the past year…and they seem to keep dropping every month. I am really tempted to buy something…but after reading everything here and the fundamentals of the economic situation….I am going to restrain myself and wait another 6-12 months…it appears prices are going to drop a fair bit more. cheers
Fisher Island: Still a Refuge, but Not From the Downturn
http://www.nytimes.com/2009/02/01/business/01fisher.html?_r=1&ref=business
“That has caused some tenants, like Mr. Goodwin, whose annual expenses run to $80,000 for a 720-square-foot home, to put his property up for sale.”
Anyone have any idea what’s going on at 900? Closing, defaults, etc
Can anyone confirm that 1 of the pools only gets a couple of hours sunshine per day?
Better get up early if its true – Shine On!
DL – 1 pool has AM sun and the other all afternoon.
Lucas, once you know the price and details of this deal please post them asap since I have a unit there though I planned to keep it for the next 5-8 years. Still concerned about impact on the prices.
Seems bulk sales are finally start to happen. This is a good sign.
anyone know who brokered the deal?
Another Brick in the Wall. Finally, the beginning of the end…..
the sooner we get all these units sold the better. I hope we get more bulk deals.
chris, raffi,
I agree.
I do not even mind cram-downs.
This establishes a comp of sorts, to the neighbors anyway.
WHEN WILL PRICES BOTTOM?
1. Prices will not bottom until two things happen in Miami. High maintenance fees, i.e. windstorm and homeowners insurance goes down – and the only way that is possible is for the Federal Govt to backstop windstorm in the same manner as national flood insurance. A better possibility with democrats in control. But dont count on it.
2. The end of the rape, pillage, and plunder by the city and county employees unions who have blackmailed property owners into near insolvency with outrageous retirement packages. Heres how the scam works. Most Fortune 500 companies have discontinued defined benefit pension plans. Probably less than 20% do so today.Yet if you work for Miami Dade County – City of Miami – school district etc., the benefits are outrageous compared to the private sector. Cops, teachers, firemen, sanitation workers etc. can retire after between 20 and 30 years of service. But if you game the system by working long overtime hours a year or so before retirement your defined benefit goes up accordingly. Then if you were to never take any of your alloted personal days (ha ha) or nver used all of your vacation time (ha ha) you get a lump sum payout for accrued time lets say for a 20 year accumulation of such. You have people retiring with $60,000 to $70,000 anuual fixed benefits with cost of living escalation clauses , including health care for you and your family. The Miami-Dade county attorney who was recently hired for this job after retiring from the departmaent only a few years ago is getting a close to $300,000 salary with his new hire in addition to a $70,000 pension from his first hire and then claimed hundreds of thousands of dollars in un-used vacation and personal days. I have a friend who was a dispatcher for city of Miami beach for over 25 years as a supervisor – retired two years ago with close to a $85,000 benefit by piling up huge overtime pay in her final year or two. Cops and firemen retiring with huge pensions and health care provided after working 20 years. A friend of mine recently only half joking that he is thinking of advising his college aged kids to forego the $100,000 it would cost him for their college degree and get a county or city job at 18 yrs of age and then retire at 43 yrs of age and collect the pension and then get another job in the city next door (because I now have all this govt experience) for another 20 yrs or so and double dip on us poor suckers. The solution is real simple if they dont go broke beforehand as San Diego is about to and probably the whole state of California. The solution is to wean them into 401k retirement accounts and to eliminate pay for unused sick and vacation pay. Use it or lose it. This is the next shoe to drop in this financial meltdown. Then when your maintenance is $300-400 per month and your property taxes are a reasonable $300-400 per month will this real estate market finally bottom.
Kramer said: “The solution is real simple if they dont go broke beforehand as San Diego is about to and probably the whole state of California.”
How true. Twenty years ago, a cover of LA Magazine read: “Get Rich! Work for the County!”
One reason why people are receiving their refunds of State Income Tax (11%) in State IOUs rather than checks. Illegal aliens, however, are still getting free education, in-state tuition rates, and emergency room treatment!
California will soon be the next Michigan and Silicon Valley the new Detroit.
Are you kidding me Kramer. This is all the fault of county employees. Gimme me some of what you are smoking.
Of course there are some employees gaming the system but that goes for every industry. Most county employees are not getting rich or even well off working for the county. You are insinuating that police officers and teachers are milking the taxpayers. Come on.
http://www.iht.com/articles/2009/02/01/business/wealth.1-419895.php
🙂
lucas – third hand info….average comes out to 175sq ft. first hand info…this group will be doing more deals in the coming year.
Renter Tom… you can almost count on under $200/sf… my guess is $170/sf.
I think the developers of Quantum are the same guys who built 900 Biscayne, those buildings in Dadeland called Metropolis, and the bankrupt condos in the 60s and Collins called Cabana and Cabana on the Beach.
lucas
is there a reason why icon brickell isn’t showing up on your condo buildings view?
Kramer, I could not agree with you more.. Prices will continue to drop until the taxes and maintenance return to the mean.. It is so out of whack due to the inbalance of all of the lose money they that was added in due to FRAUD AND GREED.. City workers.. Give the gravey train pulled out of town a couple years ago. Making $28K in 2001 and then $60K in 2007 in not normal.. Local government needs to be reined in.. All the FRAUD that led to unreal appreaciation of property is gone.. The local gevernment needs to get their heads out of their a$$es.. The party is over..
Hugo P – I bet you are right…..wait a minute, my post was a guess, yours was 48 minutes after jcrimes’ post! LOL
They do have to leave “meat on the bone” for the bulk buyers but that will still affect market prices in the building for those who are trying to sell now. Looks like $175 is about HALF the average list and sale prices which according to one website was $362/s.f. and #333/s.f. respectively…
Talking about “fraud and greed”…
Has anyone learned of meltdown-related civil RICO actions against banks, developers, derivatives spinners, CDO swappers, Ponzi sustainers and/or other meltdown initiators and potential miscreants?
It appears that several plaintiff groups are looking to bring legal action against Madoff and others under the Racketeer Influenced and Corrupt Organizations Act (18 USC 1961 et seq). Apparently, private attorneys general can bring civil actions under RICO and recover treble damages.
RICO has teeth so why stop at Madoff et al?
http://www4.law.cornell.edu/uscode/18/1961.html
Question for jcrimes or connected others…..Any news on Marquis? When will closings start? Are the Israelis trying to bulk it out now that their multi parking lot deal fell out? Do they have construction loans on this project? If so which bank? Thanks in advance!
Guys, have you noticed less bentleys and rolls royces on the roads? Renter tom, did you stop driving your bentley?
Local government needs to sub contract the jobs in order to skip the benefits. Retired lifeguards have a pension of more than working school teachers. Cops make over $100,000 year with overtime watching construction sites in an a/c car.
HOA + Taxes are totally insane in Miami, they are higher than mortgages which really doesn’t make sense to me.
I think that $400/mo HOA for a 2/2 and $400-$500 taxes should be possible as long as board members don’t get money under the tables…and that appraisers stop appraising based on 2006 figures.
By the way, what the heck with the Condo deals page of this site? Are these qualifying for deals really?
Who gets stuck with this? Lev Leviev or Shaya Boymelgreen?
… on Marquis, that is…
Swiss
my understanding is that leview expressed some time ago, after visiting the site, that he wanted out of marquis. the story i was told that around the time he pushed out boylmegren, he reviewed the sites the partnership held and decided to flush soleil and vitri. marquis however, was already out of the ground, thus, there was no other choice but to continue building. not sure about the financing…i know there was a financing of some type before boylmegren parted. perhaps it was a refinancing of the original acquisition/construction loan.
not sure about closings…lucas probably knows more on that.
this project will be a massive failure based on preconstruction pricing. if memory serves me right, preconstruction started at $600s+ q ft.
Bmw m3 – Drice my Bentley????…..don’t be silly, that is what chauffeurs are for! Just kidding…..I would never put that much money into a depreciating and consumed asset just for myself. I have been known to buy an exotic car now and then only to resell it for more a year or two later…..wouldn’t buy one that would tank….too frugal!
Out of curiosity what is everyones opinion on MET 2? Will the fact that it is office/hotel/residential mix shield it enough to keep it viable?
H20
GT is the anchor tenant so the project should be in good shape
GT?
greenberg traurig
Met 2 has NO residential.
As many of you know it is part of Metropolitan Miami which is Met 1 (residential), Met 2 (Office/Convention Hotel), Met 3 (residential…but who knows…maybe just parking garage for now) and Met Square (retail)
Met 2 has a lead tenant, and a good team leasing the building.
Many leases from the last wave of Office building construction are coming to an end. Once again, we are faced with oversaturation (1450, Brickell Financial, and Met 2) ++.
Met 2 should have relative success. There is a need for Business Hotels downtown, and what is left (except for the new Kimpton brand) is very dated and not attractive. Hotel will be 2 brands (JW Marriott Marquis, and a boutique “Beaux Artes” on top)
iStar is the lender on Marquis, they are screwed
iStar (Symbol SFI)
Intraday High $1.12
Intraday Low $1.02
52 Week High $27.69
52 Week Low $0.78
Looks about right…
http://www.reuters.com/article/companyNews/idUSN0243576920090202?rpc=11
No surprise in the Reuters article: “Corus Bankshares needs capital, sees no TARP money”.
Corus shares: $.063 Down 43% from Friday. $0.55 is today’s low.
Condos-R-Us (Co-r-us) should be at the mortuary by week’s end unless the Obamunists throw good money after dead money. Corus is from Chi-town so who knows…..
Lucas,
The following is from one of your earlier posts:
The following are some of the condo developments in South Florida in which Corus Bank still has an outstanding construction loan along with the original loan amount:
Artecity – $60,300,000
Caribbean – $124,700,000
Infinity at Brickell – $140,300,000
Ivy at Riverfront – $130,400,000
Jade Ocean – $288,115,000
Mint at Riverfront – $191,800,000
Onyx on the Bay – $44,100,000
Paramount Bay – $216,000,000
Question: Is it still accurate?
I got those figures from the Corus Bank website. Closings have begun at Jade Beach and Infinity at Brickell. I’ve heard that closings at Jade Beach are going well.
Renter Tom: LOL, had the website open for a while and I hadn’t read jcrimes’ post!
The $170/sf price is a result of going back to more regular renter/cap rate terms.
Seeing the Caribbean mentioned reminded me of the old Saxony Hotel, which is/was supposed to be the Cipriani but I drove past there yesterday and it never got off the ground. I wonder what will become of gutted hotel buildings like that?
I heard that Cipriani is still a go but not until the economy turns. Deep pocket owners here.
If this deal leaves this group with more than 10% of the building I’d be very interested to know what their return and timeline assumptions are. If they will own more than 10% of the building this is a very ballsy move since the building will essentially be shut out to non-cash buyers.
Hopefully they are getting it cheap enough and they will make some money on this deal.
Lucas,
Out of the super Six you only did a story on the ICON. You have not done a piece on either Everglades or Infinity (both of which have commenced closings). Can we expect a pictorial on these two just like the one you did for ICON?
Then that would only leave Epic, Marquis and P’Bay, which you could tackle when they start closing.
Kramer,
Those Miami city employees are peasants compard to the City of Omaha employees. It is the norm for a regular patrollman to retire at about 100-115K per year plus benefits. Keep in mind that these guys retired making 60-65K per year. Firemen with 20 years on the job retire with full benefits. All of these guys get to average the last two years salary including overtime. Even though they are over a hundred million or so under-funded in the retirement account they just retired another 20 years on the job, 65K per year guy at somehthing like 110K per year. Miami’s problem is property taxes and HOA dues. That’s what’s keeping me from buying.
I have 4 questinos:
1. what is going on with Onyx O2 ???.
2. Is Onyx O2 (the land) in forclossure???.
3. What type of Loan did KENNEDY FUNDING did to the Developers of ONYX O2???.
4. Is it true that Kennedy Funding loaned over $8.000.000 for that Land???.
Can someone explain what the Fannie/Freddie rule that no more than 10 percent of the total units in a condominium project may be owned by a single entity means in practical terms?
I have inferred from the postings that it means that any new buyer will not be able to get a mortgage backed by Fannie/Freddie. Essentially they would have to be all cash deals.
If that is correct, what are the implications for buildings like the 1800 club and Quantum where it appears they are over the 10% rule. Also, does anyone know whether 1800 club is exempt from this rule since it was already over the 10% when the rule went into effect.
BTW – this is my first time posting and just want to thank all the contributors and Lucas – this is a great resource for information and dialouge.
The 10% rule does mean no Fannie/Freddie securitization but it does not mean an all cash deal. It would just mean that the bank would charge the same rates as for jumbo loans, which are also outside of the GSE range since they are above the conforming loan limit. Banks may also have tighter lending requirements for such loans especially in some of these buildings, if they have not blacklisted them completely. This would include greater scrutiny of income ratio and credit scores as well as a larger down payment requirement. Jumbo mortgages are currently charging a 7% rate so that would be an additional negative factor for affordability in such buildings.
Thanks, Petronius. I think its interesting that Fannie/Freddie put these rules in place at the same time the Gov’t is trying to make mortgages cheaper by buying mortgage-backed securities.
Ocean5, it’s not really a contradiction since while the Gov’t may want to make mortgages more affordable, they also want the lenders to have a good sense of the property’s value, and appraising a unit in buildings with bulk investors is difficult because of all the self dealing involved.
Fannie Mae and Freddie Mac are run by the government now. I guess the Gov’t is concerned about the Florida market.
Cipriani got full financing a few months ago, and is under construction. It is going slow only due to the fact the the City of Miami Beach drags their feet on construction permits.
city of MB is real busy right now too. and haven’t they had +/- 3 years to get the permit?
Silk- my thoughts exactly. Berkowitz sold the old Saxony sometime in 2005!
Does anyone know anything about Hilton Bentley Beach condos (the condo hotel) in South Beach – directly across the street from Prime 112 – and which now has the new restaurant “Prime Italian” on the ground floor? I am considering making an offer to buy one and would appreciate information from anyone who has heard anything positive or negative about the place.
Everyone knows that the Israelites are card carrying members of the Smart Money. Therefore don’t be surprised when you see the square foot price for this bulk sale part the red sea in the $125.00 to $150.00 range.
The Smart Money in action again!
So what price did this deal go down at? Anyone?
M3, I’m guessing the developer just gave em away for a box full of envelopes and some jawbreakers.
(quoting movies here)
Seriously though, I’m curious to know the sale details too. Lucas, inquiring minds want to know!
The Ace,
From what I hear, you’re in for a big surprise. They must have left their Smart Money card at customs.
The Ace:
Why are you so deferential? So whipped? You presume far too much. Really!
Well tell us what you’re hearing lucas. Why so bashful?
a bargain whatever price lol because I am IN tel aviv at the monent and nice apts on ocean are app 1000 US$ per sq ft and UP -no kidding
The Smart Money can only assume that Samson – Post# 71 is one of the dunder head whippees that paid $400.00 plus per square foot between the columns, for everyone knows that The Smart Money are whippers not whippees . $125.00 per square foot is close at hand, whoopee!
How’s that for deferential.
The Smart Money.
Lucas – Any idea when the details on the Quantum deal would be public?
Nope. I have no clue when they are scheduled to close.
Very Interesting. Somebody know what is the name of the israeli group?