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The buyers of these 5 units just overpaid by 40% – 82%. $75/ft is what any of these units are worth and no more. They will be plucking their feathers out in depression when they see their “investments” plummet gradually over the next 5 years.
The Beak has Spoken
$75
We The Smart Money profusely apologize for overstating the value of Miami Condo’s at $125.00 per square foot owing to the fact that Unit 2214 at The Club at Brickell Bay sold for $122.00 per square foot.
The Smart Money.
Thank GOD …..I held off buying at Christmas…and my all cash offer was rejected on a condo in Aventura…………..I hate to admit it…but THE SMART MONEY is right again.
i’m a little surprised by the jade price…especially in this market. seems a bit high. lucas – know anything about the unit.
if someone remembers…did jade start off in preconstruction at 500sq ft?
When Lucas mentioned the Parc Loft deal a few weeks (months?) back, I said it was a good deal. Some guys rubbished it. Well it sold for full LIST Price of $210,000.
The No Penny Boys Club can keep flocking a dead horse and excellent deals will all go by while they are watching.
As I reapeat once again, I do not know what will happen to entire buildings in jeopardy such as Icon, Infinity, Wind, Mint etc where closings are so meagre. But as far as the other buildings go, foreclosures – short sales are the way to go. It is universally acknowledged that once these things dry up, which is expected to happen in the next 6-12 months, then deals will be hard to come by. Sure the market will be depressed for some time, you can always snag a place in the next couple of years for a decent price but killer deals will be hard to come by.
No wonder the bird gives a new meaning to birds brain when declaring that the Club on Brickell needs another 40-80% off. Yeah, I will buy 5 of those if it ever happens, my depreciating cars will be worth more than that! In your dreams!
Jade is the worst deal of all. With an obscene HOA of $1500+ it is a no go. Only partial bay view too.
Let me mention this again to all those who are on the side lines and read this blog.
In the real World, out of prospective Miami flat buyers waiting on the sidelines, only a small percentage read this blog (and it is a shame) and are even influenced by the NPBC (No Penny Boys Club). When they see a good deal like that of Brickell Bay or Skyline or Parc Lofts, they will buy it.
The stated goal of NPBC is to discourage anyone from buying a condo in Miami so that they can beat down the prices in the absense of any competetion to secure a pad for themselves (no kidding, as stated in Mo’s blog). But the market is too big to be influenced by rantings of a few Birds with matching brains.
Every economy will turn around including this one. And when it does, it will roar like a lion. Why, I have complete and utter confidence that the Green tech and the Nano tech will be the new industrial revolution that is going to change the face of the Earth, our way of life and fortunes. And I am not talking 20 years down the road, more like 5 to 10.
We owned an 07 line at JADE and paid 1.150 million for it in 2003 pre-con……really loved living there and these are 3 bedroom flow through units with full bay view out the front and full city view out the back and have double balconies as well with private elevator access to the apartment…..was a great group of people living there (Lot’s of sports and TV folks, restauant owners, artists, models, business execs, etc), and wonderful staff on site too……..Then a tsunami of greed took over and we saw trouble on the horizon so sold out in 2006……..that 4507 unit for 869K sold very quickly…. we did not even have a chance to view it…..Would consider going back if the right deal presented itself…..JADE should be priced higher than Marina Blue which bulked at 200+ so 300-450 psf seems fair…..Now those folks who currently have the same units on lower floors listed for over a mil, well “Houston we have a problem”………..
Lucas, you are again misleading readers. Unit 908 at jade sold for $269/sf (2 and 2). In january a 1 and 1 sold for $240/sf.
Aj, your 6 to 12 month prediction is absurd. 1 out of 5 floridians aren’t paying their mortgage. The banks won’t get around to foreclosing these units for 1 to 3 years.
AJ – You are sooo silly. Green tech only adds cost at this point. We could all be green right now you silly dodo but energy costs would be 4-10x’s what they are right now and that would crush the world economy. Think about all the complainers of $4/gallon gas complaining at $20/gallon. We use oil for one reason…it is CHEAP! Cheap compared to other energy alternatives. Energy is fungible. We could go solar now but your light bill would be $1,000 – $2,000 per month and people would not stand for that. If I can charge everyone even just twice as much for electricity, I could create a million new jobs….but that wouldn’t help the economy one bit. On the other hand, Nano tech holds promise….. You need to stop reading headlines and actually do some research.
Why do you stress about the No Penny Boys Club and then state that these few people can have no effect on the market? Why worry then? I guess it is like your rant on insurance companies but weren’t smart enough to by their stock if you think they made unjust and excessive profit.
AJ,
After months I have you figured out.
I remember when you said that Jorge Perez was reading this forum and was worried about what I wrote.
I remember that RT replied that you were delusional at the time for thinking Jorge Perez would be reading this forum.
It took a while but now I see it.
You think that you’re job as an investor is to lead a cheerleading crowd.
You honestly and sincerely believe that through your efforts and others you can change this market by staying positive and on message.
You believe that you are defending your investments/ego by speaking up.
All this is delusional.
The market will do what it will do and doesn’t care about you or me or RT. In fact it doesn’t even care about the President or Helicopter Ben.
You lost.
You will lose a lot more.
It’s not personal.
RT ,
I said in 5 to 10 years. Not right now. Of course alternate energy is too expensive right now. But all that will change, sooner than you think. In 5 years there will be only hybrids or all electric vehicles on the road. There will be no more pure petrol driven vehicles except for some sports cars or specialty cars, and I bet they will be taxed out of anyone’s brains who insist on wanting them.
re#8, OK instead of 6-12 months, let’s say 12-18 months. Happy?
NY TIMES
Looking for Bottom in N.Y. Real Estate
“Some industry observers foresee market drops of 40 percent, while others think that is too extreme and suggest that price reductions of 25 percent will more be likely the new norm… Large drops in prices are not new in the city. The last decade-long increase in prices was followed by about seven years of falling prices starting in the early 1990s, said Ingrid Gould Ellen, the co-director of the Furman Center for Real Estate and Urban Policy at New York University School of Law. Prices fell about 29 percent.”
Of course the loses were much steeper when you look at inflation during the 90s.
Also rentals are dropping.
Finally, this isn’t the 90s. No more rate drops to stimulate the economy.
Anybody here own in Manhatten?
How could you have figured me out, when until yesterday you were not even sure if I was Candela ot GT or doctor or 300K to blow or the many other names you thought I was. C’mon now!
AJ,
“OK instead of 6-12 months, let’s say 12-18 months. Happy?”
Try 6-8 years in nominal terms.
Inflation adjusted dollars —-> YOU WILL NEVER SEE 2005-2007 PRICES IN YOUR LIFETIME. EVER.
Take your meds and get over it.
AJ,
You are real. Nobody could fake being this stupid.
It’s not possible.
How many aliases you have here in your pitiful attempt to prop up this market by being a cheerleader?
That I do not know.
BMW M3 (Mo),
You obviously have no clue about the units at Jade. Unit 908 faces the street and an empty lot while unit 4507 has a direct water view. Do me a favor and stay on your own blog so you can continue to pretend to be an expert about condos. I find it humorous that you are paying people to write a review about each condo building. You should get off your lazy ass and actually visit the condo buildings in Miami if you’re going to write and pretend to be an expert about them.
Now THATS a smack down!!
AJ,
green energy and nano offer promise, but you are a decade away at least. the problem is we have not had any corporate or government leadership in the past to push these industries-which are vehemently being opposed by existing energy and construction companies. as RT said, green is still an excessive cost which will not be overcome during a severe recession.
nanotech holds promise, but again is mostly in the domain of academic researchers and a few high tech companies. its mass impact on society at large is a decade off. the recent push by the administration for additional spending by nsf and nih will help-but most of that money will go to older established researchers who will fund obsolete research areas and not up and coming ideas and research groups.
IF by chance we get some inspired government and corporate leadership, these technologies could transform the world. but most of the leadership i see, such as pickens on energy, is just an incremental change towards new energy technologies and not a paradigm shift. this requires an entire new energy infrastructure-and i am yet to see this country accept the cost of such a shift. hopefully it will before its too late.
AJ,
As for the short sale deals you talked about, in the past i did agree with you that you should pick them off now if you want a shot at a deal. now i feel over the next year we will see even better units (location in building, etc) become available as the more well to do investors collapse under the financial catastrophe we are experiencing. keep an eye out on whether this trend develops. up until now, many of the foreclosures have been on the “cheaper” units that amateur investors bought and immediately fell underwater. if the better view units begin to appear on the mls, you know the sickness is spreading up the food chain. if this occurs, prices will truly collapse in many of these buildings. certainly is interesting times we are living in.
gables – My point is Green tech IS here, right now. But the economics makes it a non-starter. That is how it has been for decades. Everyone bellyaches about using oil but UNTIL the economics makes green tech feasible (and not just silly tax credit stuff but the REAL economics) we will keep using what is cheaper…oil. I do think, a very focused research system on making solar economically feasible is our best path…….non silicon thin film with nano tube multi-angle lens film is getting us closer. And once battery tech catches up, which is close, it’ll make internal combustion engine vehicles economically obsolete.
Here is a “must read” on iceland……. that hotel with the decor reminds me of something. ICONic. LOL
http://www.vanityfair.com/politics/features/2009/04/iceland200904
Lucas goes Pimp Slappin BMW M3 (Mo)
The Smart Money is on Lucas.
RT,
i certainly dont disagree with you. the only way oil disappears from our energy policy is if we develop an alternative portable energy infrastructure. one major improvement would be significantly upgraded electrical grid. the other, more likely needed for overall change, will be the introduction of hydrogen infrastructure. energy requires portability and/or transmission which oil provides with our current infrastructure.
the best future green energy approach will be to develop power plants which create hydrogen, which may then be transported, stored and converted to energy on demand. reliance on hybrid/batteries may not work because of environmental effects associated with battery power. this may become nothing more than a niche market. all of the green efforts in building construction will be made obsolete once cheap sources of hydrogen are commercialized-and we are not far from that point.
The Ace
“Lucas goes Pimp Slappin BMW M3 (Mo)
The Smart Money is on Lucas.”
Of course 🙂
Muir, did you have a Sunday Epiphany?
oops. I presumed Jade did not have full Bayview. My bad. Even then $1600 HOA is a killer. I don’t even want to think about the taxes. For that kind of bread, I would prefer Continuum II.
Hey gables – I have to quash the hydrogen concept as the future. It isn’t. Battery tech is….that includes newly developed nano anode lithium ion batteries and further research on instant charge capacitor batteries. The advantage to batteries is simple, pull into any place…..a McDonald’s parking lot for example and swap out a few 20 lb. battery packs for a newly charged set. It is quick and easy. One concept is to have a battery trailer that you load in hundreds of battery packs and the trailer is driven to the power supply source (no need for all the smart grid to implement plus no transmission energy loss……no need either to plug in at home) and the batteries are charged right in the trailer, then the trailer is parked just about anywhere for battery swaps. Basically, you pay a battery deposit fee up front, then can exchange them for charged ones as you go (and obviously you pay for the charge). Another advantage is if you ran out of juice, any car could pull up and swap out a pack so you can get to the next battery exchange station. It would be faster then filling up gas or hydrogen and without all the EPA crap associated with the old technologies for a particular location (think of all the gas station EPA stuff that would be eliminated). That is the future and you would have a lot less maintenance then for gas or hydro cars. Basically, this system bypasses 98% of the infrastructure investment that smart grid and hydrogen requires….it SOLVES the chicken and the egg problem. It is the future. I have spoken.
RT, your idea is fine but we do not have the electric infrastructure in place to keep a new fleet of batteries charged in that manner. hydrogen will allow the country to produce a small economical electric plant anywhere it is needed. each house and building will be able to create its own power through hydrogen conversion. this will introduce resiliency into the electrical grid as well. not saying batteries are not part of the solution, but the new energy infrastructure will be hydrogen based because it is cheap, plentiful, clean and safe. batteries will form just one component of this new energy complex. homes and condos will use, say solar, to store energy in the form of hydrogen and then convert and use as needed. batteries are extremely inefficient compared to this handling of energy.
AJ,
I agree that the HOA fees are high for the unit at Jade. However, you have to realize that the HOA fees are based on the square footage of the unit. Unit 4507 has 2,130 square feet. It’s a big boy!
Muir –
I own a 1,800 sq. ft. loft on Broome Street in SoHo. Last I knew, they were worth roughly $1,000K/sf. There are less than 10 units. One of us is trying to sell now. I’ll let you know what he gets.
As for Miami and Miami Beach, having been looking for a year in SoFi and finding nothing of interest for less than $1MM, I am making an offer on a 1,500 sq 2-3/2 unit at Icon Brickell for roughly $400/sf. Obviously, I think it is the best value out there. Let’s see.
gables – Not to stay off topic here … and get people mad, but hydrogen fuel is produced by electricity and would REQUIRE upgrading to a smart grid system for widespread adoption in the way you propose (like at each gas station). Estimates for a smart grid system top a $1 Trillion (10 years to build out….and to drive you need it built!)f. Even today’s batteries are efficient enough with the Tesla sports car getting 200-250 miles on a charge….with nano anode tech the same size and weight of batteries would give you a 2000-2500 range. So you could reduce the cost, size and weight of the batteries by 70% and reduce the range to 500 miles. Hydrogen requires a much larger infrastructure investment and is hobbled by the chicken and the egg problem…..esp with having to set up sooo many fueling stations…..swappable batteries solves that problem with nearly zero investment compared to the alternatives. Moreover, batteries could be charged by solar, wind, etc. too AND even integrated solar cells on the roofn (of your car and house) so if your car sits in the sun while you work all day you’ll leave with charged batteries …. FOR FREE, there is NO WAY hydrogen cars can do that. Battery cars are the future and hybrids are simply a stepping stone as range extenders. Mark my words…..it is the future! LOL
Ace is a fraud! Ace is a fraud! Ace is a fraud! Ace is a fraud! I know him personally and he lives with his mom, he couldn’t even afford $1.25 per square ft!
Did anyone just watch Squawk Box? I think Warren Buffett sounded like an idiot. He was asked some tough questions but I would have thought that someone as seasoned as him would have been able to answer them.
RT, hydrogen can be created on site with solar cells-you have your electric power source right there, and off the grid if desired. both hydrogen and batteries serve as storage and transport of energy-hydrogen is just much more efficient at this point. it also allows flexibility of moving the energy to a factory, auto, house, etc without compatibility issues related to batteries. at the end of the day we are arguing for the same thing. you are focused a bit more on end product details and i am focused more on the overall energy system. but we agree a new system of energy creation, storage and transit will occur in the next advancement in the energy infrastructure.
sorry for straying off topic, will return back to condos. the emerald deal is the interesting one for me. this is an upscale building and shows the direction prices may go for such units. the effects of HOA and taxes are apparent on such a unit. if emerald begins to sell for $200 sf, then the average unit in miami will sell for a 25% discount, my estimate for what the luxury premium should be.
Enough about the energy- this is not an energy blog.
Lucas, Yes, it is the size of a 4 or 5 BR apt. and hence a steep HOA. I Guess it is not for a regular Joe but only for a GWM (guy with money).
I read the Warren rantings and he is all over the place. The poor guy is old and all that bridge with Bill Gates is taking its toll.
Muir,
Just saw your comment from last week. FYI… I’m definitely not AJ, but I’m glad to see what I’m saying is resonating enough for someone to remember.
Lucas,
Thanks for the new data. Also, if Buffett sounded like an idiot I think its because he wanted to, for some reason.
Doc
Samson,
I’m sure you’ll do great.
However, with patience on the buying side, you’ll do phenomenally well.
It’s not like prices will jump tomorrow in Miami is it?
Global recession could last til end 2010 or longer: Report
http://economictimes.indiatimes.com/News/Economy/Global-recession-could-last-til-end-2010-or-longer-Report/articleshow/4238518.cms
I think that $100,000 condo is a great buy for investors. Again do not mix up investor’s mentality and end buyer’s one.
Also about NY real estate market. Historically overall for the past 30 years prices in Manhattan did not fall more than 10-12%. There were some extreme cases but in general that’ what it was. The situation now is unique. So we cannot predict exactly what will happen.
In Miami we should watch for new buyers from Latin America. Political situation there is very troublesome. The majority of people over there are very poor. But in case of relatively wealthy people particularly in Venezuela I would pack my suitcases and leave ASAP. Some other countries in this region are facing trouble as well. So things can turn out to be unexpectedly different than the normal course of economic development.
doctor,
My bad.
I’ve come to the conclusion that AJ is a real person and only one person and not someone’s alter-ego.
However unlikely that is.
lara – I would say the same thing about America right now…..pack your bags and your portfolio and head to Canada! LOL
Lara,
re: “Historically overall for the past 30 years prices in Manhattan did not fall more than 10-12%.”
_____
NY TIMES
Looking for Bottom in N.Y. Real Estate
“….starting in the early 1990s, said Ingrid Gould Ellen, the co-director of the Furman Center for Real Estate and Urban Policy at New York University School of Law. Prices fell about 29 percent.”
Some glimmer of hope
http://finance.yahoo.com/real-estate/article/106700/Signs-of-Life-From-the-Real-Estate-Market
Lara,
Historically, Real Estate only rises 3% a year, and that’s on average, many times it has declined.
RT and I have posted a number of links.
There is even a long term (400 year study of the SAME houses) in the Netherlands.
Case-Schiller in the US for the past 100 years are also there for viewing.
It SOUNDS reasonable and intelligent to say “The situation now is unique. So we cannot predict exactly what will happen.” but is wrong on both counts.
First, if anything was unique, it was the scale of the bubble(s) and, what we are now seeing is a reversion to a means, nothing unique in that.
Second, it is very easy to predict what will happen in the immediate future, prices will continue to go down, and in inflation-adjusted terms it is also easy to see where prices will be in 5 years; down. What none can see is the nominal price in 2 or 3 years.
RT,
Staying tight with CDs?
It’s disconcerting to see Sheila Bair reassuring us that everything is ok.
If S&P approaches 4000 I start buying in $50K blocks until I’m all in.
Stock Market will rebound many years before Real Estate.
lara
many rich folks in venezuela invested in stanford…there’s nothing for them to invest in now – their money is gone.
I thought someone will give an update on the Walmart project but looks like no one is making an effort.
The deal between McClatchy and Terra should have been done by the end of 2008. As there was no news, I thought the deal is dead. But looks like Terra got an extention till end mid 2009 and then again till end 2009 to close the deal or lose the $10 Million deposit:
http://www.reuters.com/article/mnaNewsTechMediaTelco/idUSN3035478820081231
also
http://www.bizjournals.com/sacramento/stories/2008/12/29/daily26.html
I still think it is a non starter. Bayview Market 7.32 acres sold for 3-4 mil in 2004. How can 10 acre Miami Herald parking lot (not even water front, mind you, just a couple of blocks south east of Bayview Market) be worth $19 Mil per acre at 2006 prices and expected to hold up its value in 2009? Absurd. Even Walmart cannot save this dumb stupid deal.
Muir – CD’s a couple high yield savings accounts. That will be my March review since have CD’s expiring in the coming months……staggered over the next 12 with a few beyond that. Who thought 4.25% would be good! LOL I guess in a deflationary environment, the real rate is better. As I had posted long about about the demand curve shifting down with the dual challenges of the lowered demand curve and slack burn off….the fed govt keeps making mistakes and is simply a political power grab through money that we’ll be paying back for 50 years! There are some things the fed govt could do to assist, such as buying up the excess vehicles from US makers to update state, local, and federal govt fleets with vehicles under warranty and more fuel efficient. But alas, they only care about union jobs….. Meanwhile, there is little that they can do about housing except allow EVERYONE to refi up to $500K of existing mortgages into 4%-5% 30-40 year fixed. Oh well, politics at its worse…… I spoke to a realtor today…it is bad and there is no light from anywhere. Even Roubini just stated that he sees recession through the end of 2010 with unemployment well above 10%…gee, didn’t I say something like that last year? LOL
But but but, jcrimes…..can’t they invest in Cargill venezuela? Oppps, my bad.
Why some people think (Post #39) that buyers from South America will save the day. The fact is that there is not one single country in South America that is not a third world country and since when did poor starving peasants from the third world start purchasing over priced luxury Miami Condos. Do you not realize that for the cost of a single month’s HOA dues of a Miami Condo would feed and cloth a South American family of 15 for a year and seven months.
And if you thought our economy is in the tank those South American countries that are supposed to save the day can’t even afford a tank to fall into. Perhaps the Smart Money is wrong on this one and Miami Condos are priced differently to accommodate worthless peso’s and if that’s the case then perhaps Lucas can give them a discount on the proposed $900.00 bus ride, better be very large buses.
The Smart Money
RT,
Yeah, but do you have a plan for when the printing presses start?
So it seems the Florida Marlins may end up with a downtown baseball stadium afterall. Best thing that could happen here with a privately financed stadium saving us all a few hundred mill and allows people to take the train to a baseball game. Lets see how the vote goes this week.
Oh what trouble Daniel Kodsi , the owner of Paramount Park, Paramount Beach lots and the Praramount Bay
http://southflorida.bizjournals.com/southflorida/stories/2009/02/09/daily76.html
And whenever Ace opens his mouth, we all have to close our noses. This nitwit is so utterly clueless about everything and anything around the World leave alone matters of the United States.
Even a relatively smart high school grad will tell you that the poor third World nations are littered with many millionaires and billionaires in the world. These countries are poor because of the unbelievable income inequalities. When you are rich in these countries, you are really rich. These rich will blow the American rich out of the water anyday. The fastest growing number millionaires and billionaires in the world are not in US, Japan or Germany. They are in India, China, Mexico, Brazil, Russia etc.
This stupid high school drop out should keep his mouth shut. Seriously, STFU.
I think wealthy people from South America, Europe, Russia et al. who wanted to come to Miami have done so by now, and if they haven’t,chances are they aren’t so wealthy any more.
I imagine you’ll see historically normal levels of foreign interest in Miami for the foreseeable future. The past 10 years were not historically normal. I don’t see foreigners rushing to the Miami market with the new mantra, buy a condo with high maintenance fees in 2011 and see it appreciate 3% a year. Get it while it’s hot.
IF you read carefully my comment I refered to a political situation not economic situation. When it is the matter of life and death or political persecutions or if you have to conduct your business in a way that in order to do it you have to create a list of your closest friends or let’s say not enemies (whom you secretly support) and thus send them to prison in the best case scenario. people do not think about economy they just go to save their skin. Please read latest political report in this area and you’ll see that it is a very likely course of events.
To move from Latin America to Miami is very natural and much easier for people from these countries.
lara said: “To move from Latin America to Miami is very natural and much easier for people from these countries.”
Blah, blah, blah……..”Visa Over-stayers” finally are coming into the crosshairs of the Immigration folks. A lot of them were involved in mortgage fraud and more than a few have “self-deported”, prior to a trip to the “greybar hotel”.
Let me further tamp down the euphoria of the possibility of a bunch of newly-arrived “AJs”…….A ton of these “rich” South Americans bought pre-construction from Related in ICON and 500 Brickell. They can’t “find” them now so it looks like they aren’t getting back their 25% “excess deposits”! I am confident that the same clowns bought in at Everglades, Paramount, Marquis, etc., etc.
The market is accelerating on a Southbound slide to 4,000 – 5,000 and the Obamunists are touting stem cells (and windmills, etc., etc.)!! Now, that’s a misplaced priority for today’s economy! Perhaps, if the ICON came crashing down on top of Big Gorge, they could “revitalize” him.
lara…..your Zanax prescription is ready at Walgreens!
The Ace, post #49
I have to say that I have always agreed with you on your valuation matters as I strongly believe that we will see your $125/sf in several buildings. However, your comment on post #49 was both stupid and outright ignorant.
First of all, yes, they might be thild world countries, but not everyone there is a “poor starving peasant”. You have no idea what you are talking about. Decent wealthy South Americans (yes, there is such a thing) have been investors and buyers of second family homes in South Florida for a long time, specially Venezuelans. If not, just go to Doral, Weston or Palm Aire.
Second, I can tell you for a fact that a lot of people from Venezuela are sitting in the sidelines to step in and buy units (investments and vacation homes) but are not buying until we have hit and been past the bottom. This happened in the 80’s where lots of South Americans bought, so people are patient.
Third, stick to your one liners on the $125/sf. You do much better.
RT re: #41
“pack your bags and your portfolio and head to Canada! LOL”
Hey we love Americans up here in Canada. Come on up ! Banks that still work, lots of land, a cheap CAD that you can take advantage of these days. Just bring some warm clothes with ya and come on up ! : )
A one liner from The Smart Money to Hugo P Post#57 clearly a cousin of that well known commie peasant Hugo Chevez.
The one liner from the Smart Money….drum roll if you please Keith.
“Not if Hugo has his way!”
The Smart Money.
Have you noticed how the insults being heaped upon The Smart Money are increasing exponentially in line with the Miami Condo price decline. It is a classic case of blame the messenger not the market or Obama.
Miami Condos at $125.00 per square foot is soon to be upon us and across the board regardless of the Tower.
The Smart Money, predicting the real estate future in absence of Nostradamus for in his day is was $125.00 per square mile.
Ace,
$125 per square foot is a glimmer of light reflecting off the knife, lasting only momemnts, as it falls below $100….to $75 per square foot.
When the DOW hits 4,000 later this year, investors aren’t going to be thinking which Miami condo they should buy….but which currency they should switch their USD into.
With no buyers….and more and more despereate sellers….. say hello to $75/ft
Bird
The Smart Money, although being smart admits that we do not know everything and therefore we are hoping that Hugo Chevezes cousin Hugo P (does P stands for peasant or perhaps Pissant) can enlighten us at to what are “thild world countries”?
The Smart Money performing for the first time ever a triple post!
lara
the political situation in south america has always been troublesome. why would today be any different for wealthy folks there? if anything, i’d say the political climate in s.america is better today than it’s been in the past forty years. not to mention, why choose miami? better investment options.
*
I have a lot of Venezuelan relatives in Miami. Whoever mentioned Doral is right – that place is turning into Little Venezuela now.
There are a LOT of Venezuelan investors already in the market, and burned. Since their currency is so worthless a ton of them dove into apartments/condos during the up-cycle.
I know of cases where 2,3, and 4 people all pitched in together to sink their money into an apartment/condo.
Almost all of them are trying to get out of the purchase/sell the unit – and they will just walk from the mortgage… not much recourse for the banks, and they have no credit reports (as Venezuelans).
I don’t see a huge amount of $$ from them sitting on the sideline – the ones that could buy, did and the ones that shouldn’t already did too.
Take a look at these foreclosure stats and after that try claiming that prices will be going up any time soon
As a formerly rich citizen of the Bolivarian Republic of Venezuela I am not offended by the Ace remarks for he speaks the truth. Venezuela like all of South American countries are extremely poor and those few Venezuelans that had money lost it all to Hugo Chavez. Just like Fidel Castro he took over the banks, the railroads, hospitals, refineries and most other private enterprise and property. If you weren’t fortunate to escape with your wealth then what you have left is worthless because it can only be sold at what the Chavez government says it is worth. I now sell used cars in Miami for a living and live in a small rented house with my wife a seven children I can assure you that I cannot afford the over priced Miami Condos but I dream of better days.
What does everyone think about this deal?
http://sef.mlxchange.com/EmailView.asp?r=1299420886&s=SEF&t=SEF
The Ace:
You remind me of the little american children I met in summer camp who thought that Venezuela was full of indians and that people lived in huts and rode horses instead of cars. Your “peasant” comment is just stupid and insuling. (Yes, I am from Venezuela and not related to Chavez)
Vzla_man and Che Cavera:
Of course many people invested and lost money in real estate “investments” here. News travel fast and a lot of people that wanted to get their money out decided to invest in one of these precon condos or conversions. Some made money while some got caught and lost it all.
However, Venezuela has experienced a dramatic increase in revenues over the past 10 years (Oil mostly) and all of that money has been coming back to the economy and trickling out to all sorts of spending and offshore savings by a lot of new people with wealth (No wonder Stanford bank had about $2.5 Billion of funds from Venezuelan investors).
Yes, money has been lost, but there is still some money out there, it’s just smarter money like everywhere else.
Yeah, all of them are peasants, but I guess peasants like Citations…
eric:
great post. The foreclosure data doesn’t lie. And remember there is a big lag with the banks taking these properties and foreclosures hitting the market, which is why I call the so call “bottom” somewhere in 2010.
I come from San Pablo, Brazil and if I were to paint a picture of the slums in my home country it would offend your senses. As I never made it as a soccer player I came to the US as an illegle and been in Miami for 10 years and I me and my friends may squat in one of these Condos, we like the Jade!
I’m staying out of this melee.
_____
Following is an article from 06 about studies (US from 1890-2006 and Europe from the 1600s)
Similar articles where presented by myself and RT many months ago.
Bottom line Real Estate long term does NOT, repeat does NOT, go up over multi-decades.
The exceptions to the rule are interesting (like after WW2)
Yet the long trend line of 50-100 years is FLAT.
Netherlands data is from the 1600s!
March 30, 2006
Shiller: Long-Term Perspectives on the Current Boom in Home Prices
“Robert Shiller and Dean Baker have articles in the latest Economists’ Voice about the housing boom and its sustainability in the near and longer terms. Here’s Shiller with a long-term perspective gained from looking at over 100 years of housing data in a variety of countries. I cut quite a bit, but it’s still fairly long as it has lots of interesting things to say”
for more:
http://economistsview.typepad.com/economistsview/2006/03/shiller_longter.html
___
This was all known, it is true today and will be true 10-20 years from now.
If you failed to sell in 05-07, bye-bye.
Hey Phil – thanks….I like Canada and it is similar to my midwest upbringing and sensibilities. It is a great place, eh? And the banking system is rock solid….
I found it funny that Warren Buffet dissed the Obama admin today about not focusing on the economy. Oh silly Warrent, weren’t you listening to me weeks ago when I explained that the stimulus bill was just a spending political power grab with no regard to actually stimulating the economy……moreoever all the nonsense possible is being done to take advantage of the crisis……Warren doesn’t want things crammed down American’s throats…..but that is what has been happening since the inauguration. Meanwhile, Rome burns……but at least auto workers will have a strong union….too bad they aren’t making a decent car.
JL 1) Insists that all overseas Miami condo buyers are investors, counting their profits and losses.
Lara 2) Says they are escaping political persecution, kidnappings, drug violence etc.
But 3) I am saying apart from the above two categories there are tons of rich SA, Middle Easterners, Europeans and Asians who want to buy a piece of Americana as a second home. They are wealthy people and are not nickeling and diming like you guys about the out of pocket cost of owning in Aspen, Manhattan or Miami. Just because you never experienced good life or been born into money like that does not mean it is not there. None of these are Visa Overstayers as someone suggests. In fact US bends over backwards for them. I have been to the US consulates in some countries and I know how they treat the local rich and powerful like royalty.
Just got back from South Beach to NYC and feel like going back again. The weather was beautiful, 80 degrees and the ladies in South Beach were just gorgeous and plenty. Very beautiful, approachable and sexy. I almost got run over by a Lamborghini while talking to a smoking hot Russian babe on Ocean drive.
A stark contrast to the dirty, trashy, frozen concrete jungle of NYC where hot and beautiful babes are like a needle in a haystack coz it’s been taken over by the ghetto linewomen of the other boroughs with their asses spreading over two zip codes.
So, I decided to check out the ICON on Brickell and it was breathtaking! The only sore thumb in there was the lobby area, very eerie and Victorian and even the hot buxom sales girl admitted that the lobby is a source of constant complaints. The apartments were of decent size, nice kitchen appliances, very functional bathroom, spacious and well appointed living room. However, the units were designer ready, so gotta plunk some additional dough. Also they seem to under the impression that people still wanna put down pre-depression era money for their condos.
Also checked out the Mondrian, couldn’t check out the units since the sales woman was on lunch, but lobby area again was very striking with marble white background with a black, imposing staircase in the middle. The pool area was chic and relaxing with views of the islands and down town Miami.
Now, let’s just waiting to see the bottom where the falling knives have fallen to.
AJ – I have been looking for these “wealthy” foreigners…….but they must be hiding. Certainly there are not enough of them and certainly not enough of them that are stupid. Nor can they turn the housing market around….here, London, Dubai or where ever.
RT,
First you must get out of your flat and not sit in front of the monitor all day (and night) to be able to meet them. And willing to spend a little too.
I’ll be in Miami Apr-May. I’ll take you out one day to where the high rollers hang out. May be you can marry one of them and move to their Star Island Mansion 🙂
Speedy Gonzales
Sie senior I come frrom Guatamala and I must agree wid the Ace he the man that predicked $125.00 per squre inch I like to buy at that. Arrrrrrriba , ondelay! ondelay!
speaking of rolling out and having a good time… aj r u going to ultra? isn’t that your line of work/music? looks very similar to last year’s lineup.
If any de cocka da roach thinks that miami condos are over valued dats good because we need da place to stash the merchandize and clean our monies.
My God Ace you are so annoying! I have to agree with Jay, your overbearing arrogance makes it unbelievably difficult to stay sane when reading anything you say. You may find one or two foreclosed properties at $125 per sq ft, but the average price will never be close to that. I think you are hoping for that because it’s most likely all you can afford, you will be waiting for the rest of your life my friend.
Many of you may find this abstract but the reality is we South Americans cannot aford the price of a taco let alone a condo.
AJ,
Your post #72, that’s it !
You are one of the very few cosmopolitans on this blog.
If the world were full of the narrow minded penny pinchers like ace and his followers, we would still live in the middle ages !
#73 -Roger,
you are nuts there are so many good looking professional women in NYC. They are all covered up during the winter but when the spring/summer rolls around there is nothing better than sitting outside on one of those plazas around the city and watching the ladies walk by. I worked all over the Manhattan and they are everywhere you’d have to be blind not to notice them. Taking an extended luch break during a nice hot NYC summer was one of my favorite things about working in the City. Ahh, just thinking about it makes me want to book a flight up there just to hang out in the city.
Women in SB are Great, you can’t compare them to women in a non-beach environmen. It like comparing apples and oranges.
Ace, according to you and some of the other smart money guys on this blog, the US will be next to join the third world countries.
you can always tell the real smart money guys.
Some people revel in their ignorance.
makes me think:
“the US will be next to join the third world countries.”
If you have not already figured out that this will become a reality in the next few years, then you are going to have issues.
Think about it….who does America owe trillions of dollars to – Asia. Where do you think all the money has gone ? It has left the West and gone to Asia. The East will become the dominant force in the next century….Follow the money….power always follows wealth…always has and always will.
CNN, CNBC and others are deluding the public with panelists that make statements like “see investors are finding safety in the USD…that’s why it is going up”. This is pure BS…the only reason the USD is temporarily rising is because there have been huge USD short positions built over the last 8 years…now the USD shorts are covering. Once this is finished …probably late this year and early next year….the USD is going to hit the ground……and then yes the US will be well on its way to joining the ranks of 3rd world countries.
Sorry to sound unpatriotic…but this is reality…
AJ in the news:
Florida lawmakers consider ban on bestiality
BY MARC CAPUTO
Herald/Times Tallahassee Bureau
TALLAHASSEE –The act of bestiality is a step closer to becoming illegal in Florida now that a Senate committee voted to slap a third-degree felony charge on anyone who has sex with animals.
Florida is one of only 16 states that still permit bestiality — a fact that animal-rights activist and Sunrise Sen. Nan Rich learned to her horror when a Panhandle man three years ago was suspected of accidentally asphyxiating a family goat that he held by the collar while engaged in a sex act.
”There’s a tremendous correlation between sexually deviant behavior and crimes against children and crimes against animals,” said Rich, a Sunrise Democrat. “This is long overdue. These are heinous crimes. And people belong in jail.”
But the Mossy Head man suspected of assaulting Meg the goat was never charged, because law enforcement officials could never link him to the crime scene. The suspect was arrested in a separate goat-abducting months later, said Walton County Assistant State Attorney Walter Parker.
Rich’s proposal was amended to target only those who derived or helped others derive ”sexual gratification” from an animal. The amendment specified that conventional dog-judging contests and animal-husbandry practices are permissible.
That last provision tripped up Miami Democratic Sen. Larcenia Bullard.
”People are taking these animals as their husbands? What’s husbandry?” she asked. Some senators stifled their laughter as Chairman Charlie Dean explained that husbandry is the rearing and caring of animals.
Bullard didn’t get it.
”So that maybe was the reason the lady was so upset about that monkey?” Bullard asked, referring to a New York case where a woman’s suburban chimpanzee went mad and was shot.
”`I’m not familiar with that particular incident or case,” Dean said.
After the unanimous committee vote, Rich predicted the bill would pass easily this year. She said bestiality used to be illegal in Florida, but the statute was considered unconstitutional because it compared the act to homosexuality.
Rich noted that bestiality cases have cropped up throughout the state, including the abuse of a seeing-eye dog in Tallahassee and a horse in the Florida Keys.
The Mossy Head case gained added attention when a local man produced T-shirts with slogans like ”Baaa Means No!” and “What Happens in Mossy Head, Stays in Mossy Head.”
”It’s interesting,” Rich said. “People either giggle or get very silent. A lot of people don’t believe something like this can happen. But it does.”
Cockatoo, that is not reality it is your opinion!
Hey, I’m not a soothsayer so I can’t tell you what the future holds.
I’ve been hearing the same story for decades and I am not that old.
You guys are not syaing anything new, you are just the latest in a long line of the doom and gloom crowd. There is nothing new or revealing in what you and the others are saying. Remember when Japan was going to own everything in america and we would be nothing but servants to the japanese? Well this time China is the flavor of the month next month it may be india or brazil who knows. Like I said, I can’t predict the future and maybe one day you will be right, until then I will continue to bet my money on tthe Innovation of americans companies and the american economy. I said before I am still buying american companies and even american financial companies. I have had the pleasure of woking for some of these companies and I have way too much respect for them and what they are capable of doing to disregard them. So you guys can go ahead and take your money to Canada, Brazil or China and buy gold at $1000/oz but I believe the economy and the stock market will be just fine it will take time though.
Greed and Fear, that’s when the “Smart Money” is made.
shwin,
not part of the ultra. Also not participating in the WMC. May be next year.
Visionary,
Thanks for considering me a Cosmopolitan. That is the best compliment I received from anyone. Appreciate it.
I believe you are referring to the post which is now numbered #73:
“JL 1) Insists that all overseas Miami condo buyers are investors, counting their profits and losses.
Lara 2) Says they are escaping political persecution, kidnappings, drug violence etc.
But 3) I am saying apart from the above two categories there are tons of rich SA, Middle Easterners, Europeans and Asians who want to buy a piece of Americana as a second home. They are wealthy people and are not nickeling and diming like you guys about the out of pocket cost of owning in Aspen, Manhattan or Miami. Just because you never experienced good life or been born into money like that does not mean it is not there. None of these are Visa Overstayers as someone suggests. In fact US bends over backwards for them. I have been to the US consulates in some countries and I know how they treat the local rich and powerful like royalty.”
#82 Makes me think…. you need to get your eyes checked… I work in Midtown Manhattan and I know what you are talking about. The professional women in NYC you are talking about are nice, but no where near the quality you see on SB. Also the number of “hot” ones in this bunch in NYC can be counted on one hand. However, on SB, almost every other girl is hot, friendly and also dressed to seduce. It also helps that SB women are from all over Latin america, East European and bring the feminine charm that women in NYC lack….
The women I thought were hot in NYC look like plain Janes every time I come back from SB. Like you said, it is comparing oranges and apples.
#75 AJ, I’ll take you up on your offer of hanging out with the high rollers….
Roger, I agree with you on this one. NYC women do not hold a candle to SOBE chicks. But the problem is most of SOBE girls are either visitors or short time residents of Miami. If you really compare the long term Miami residents with NYC broads, the story could be slightly different.
Gosh, I re-read what I wrote above and I sound like a boor. Ladies of this blog, please forgive me if I offended you.
Continuing with the argument of how much and what kind of money some of these overseas guests have, Last year, I met this kid on the pool deck of 1800 Club and asked him to tell his dad to come to the committee meeting. He told me the flat is his and that his dad bought it for him!
This is an Indian kid, studying medicine in Miami. He said his dad bought him a 2/2 so that he can finish his studies. My immediate question was why? Why not rent or some such thing. The guy shrugs and says this is nothing for his father. He is some kind of businessman/industrialist in India but he does not even figure in the top 10000 of the richest people in India. But obviously has plenty of money to throw. If someone can plonk down 450,000 for a 2/2 all cash for a 4 year purpose and forget about it, and they are not even part of the A list high society of a country, imagine what the really rich can do?
Roger, If Renter Tom declines my invitation, you sure can join me.
RT is that a yes or no?
I re-read this posting #8 by Swiss Luxury:
“We owned an 07 line at JADE and paid 1.150 million for it in 2003 pre-con……really loved living there and these are 3 bedroom flow through units with full bay view out the front and full city view out the back and have double balconies as well with private elevator access to the apartment…..was a great group of people living there (Lot’s of sports and TV folks, restauant owners, artists, models, business execs, etc), and wonderful staff on site too……..Then a tsunami of greed took over and we saw trouble on the horizon so sold out in 2006……..that 4507 unit for 869K sold very quickly…. we did not even have a chance to view it…..Would consider going back if the right deal presented itself…..JADE should be priced higher than Marina Blue which bulked at 200+ so 300-450 psf seems fair…..Now those folks who currently have the same units on lower floors listed for over a mil, well “Houston we have a problem”………..”
So Swiss, you say that 869K is a super deal for that prop. Wow. I guess it is for a flow through unit like that and for that size. And it is also striking that you might have bought it yourself for that price if you had the time and opportunity.
Now I go back and read jcrimes #4 “i’m a little surprised by the jade price…especially in this market. seems a bit high. lucas – know anything about the unit.”
So we have two smart people on this blog 1) jcrimes thinks it is still steep, 2) Swiss luxury says, it is a good deal and it sold in a jiffy and that he would buy it himself if he had the opportunity.
bloggers, who do you think is right?
you can’t compare NYC and SB women. You are talking apples and oranges it just isn’t a fair comparison. I complete agree with your assesment of SB I just don’t agree with your assesment of NYC as a whole when compared with most other large cities.
Visionary said in #81:
“You are one of the very few cosmopolitans on this blog.”
THAT IS HILARIOUS…..IF TRUE, THANK GOD FOR SMALL FAVORS!
“If the world were full of the narrow minded penny pinchers like ace and his followers, we would still live in the middle ages !”
THE FACT IS THAT “THE WORLD IS MINE ON PLASTIC BUT SEE IF YOU CAN COLLECT” CROWN HAS BEEN THE FUNDAMENTAL PROBLEM FOR 15 – 20 YEARS. THEY ARE BEING WASHED-OUT ONE-BY-ONE AND IT WILL TAKE TIME FOR THE ECONOMY TO GET BACK TO NORMAL!
AJ 17/90 posts = 18%
Muir 14/90 posts = 15%
Ace 6/90 posts = 6%
I propose a 10% max usage per person.
Don’t know why but I though Swiss luxury was female.
Anyway, Swiss is right because someone agreed enough to put their money on it. It only takes one buyer.
makes me think,
Yes, there are a lot of pretty girls in NYC. Go to Marquee, Mansion (M2) and a host of other club/lounges in Chelsea and the Meat Packing district and you will meet stunning girls. But if you are talking about the cuteness/sq. mile, bump into them on the street and not just in exclusive clubs and hangouts then sunny destinations like LA and Miami always come up on tops. It has always been that way.
This may be a silly guestion so please don’t laugh. I know china buys a lot of the US Govt debt and we will have to pay it back but what happens in the worst case scenario and we can’t pay back the dept? What happens, do we become a chinese government holding? Is there a debtors court for Countries like the USA or do they stop buying our innovative products? Do we become like an Zimbabawe?
Swiss luxury, you already got one vote from makes me think! I am still wavering whether to vote for jcrimes or Swiss. My only issue is the high HOA even though I know it is justified due to its sheer size and the flow through factor and views. May be it is not for ordinary folks like me. I still would like to hear what others think and who they will side with jcrimes or Swiss who thinks $408 is very fair for this particular unit in Jade.
I will ignore Ace’s view if he decides to jump in but Muir what do you think (Only because Muir did say that premium buildings with views will hold better)? And to your tax proposal, only one liner posters like you should be taxed for their bad taste, not just on the sheer number of posts.
makes me think, re: the Chinese factor, volumes and books have been written. No one knows if China will cut its nose to spite its face. Or if US hyperinflation will make our debt to China totally insignificant. This is a MAD (mutually assured destruction) scenario in which no nuclear warheads are in play like in the cold war but only monetary instruments. If either US or China drops the ball, we are all finished. So pray that this myth continues and we live for another 50 years in this delicate balance, after that who The F cares.
AJ,
I’ve never said that $300 psqf would cease to exist.
So, yes, certain buildings will do much better than others.
Which buildings?
I leave that to experts like Lucas.
What I have consistently stated and backed up with hard numbers (real life examples) and with data accumulated over 100s of years and analyzed by Schiller (whose index, Case-Schiller is traded in Chicago) is this: prices will revert to the median, and that will be around $85.
Here’s another way to think about it. Even during the Great Depression, luxury items existed. Though it should be noted, at cheaper prices.
I even stated that true luxury condos would behave differently. They would have a higher multiplier on a rent basis (150x) Their PE would be higher 25, versus a PE of 15-17 for more moderate properties.
___
Here’s the thing though, which units are true “luxury?”
What will others consider “luxury.”
___
Also, keep in mind that these will fall in price also.
___
Finally, what Lara and yourself seem to miss is this: even if nominal prices go up 3-5 years from now, in real inflation-adjusted dollars you lose.
If you had a big mortgage, you’d be better off as you would be able to pay off the debt with cheaper dollars.
#96, AJ, completely agree with you. You took the words out of my mouth. Yeah, the only thing with SB is most of these girls are visitors. But the perm tans, the bikinis, the sun and sand and the concentration of these exotic ladies definitely makes SB the place to be. Now only if Miami had the kind and quantity of jobs NYC does….
So is RT taking you up on your offer? Hell, I wouldn’t mind coming to one of your DJ gigs.
AJ,
Your post #98:
For Miami, the price is quite high, but I think adequate.
But for an international investor it looks cheap !
We are used to much higher RE prices out side of the USA (at least double to threefold).
There are still countries where you can obtain a mortgage (if you hold enough collateral assets), with low interest rates of 1.1 – 1.3% (and with no obligation to amortize).
So you can finance at home and buy all cash in the USA.
If you look only for a safe heaven and want to distribute a part of your assets internationally, yield has no priority !
I like to own RE also for pleasure and not only for income !
But this blog, it seems, is beeing more and more seized by posters with empty pockets and dreaming of free lunches.
makes me think: re: #86
You are right, in that at present emerging countries like China, Brazil etc do not hold a candle to the spirit and innovation of American companies.
What I fear is that American debt has ballooned so far and our ability to repay is so severely hampered, that it may not make a difference how innovative we are in comparison to the rest of the world. If we can’t repay our debt and it gets worst than it is…then we will hit 3rd world status, with a dollar that no one wants anymore. If we can’t repay our debt to China we may be better offer telling them to “take a hike” and “come get it if you can” than actually trying to repay it.
Anyway…I hope I am wrong, but the numbers/fundamentals do not look good for America….nor Miami Real Estate unfortunately.
The Ace is a moron with no money.
His friend Jay should call his mother and tell her what an embarassment he is in this blog.
Jcrimes,
To answer your question. The situation in Venezuela is extreme right now and getting really bad from political point of view. I listened to a report of 2 former US Embassadors in this country. I expect the stream of political refugees in the near future if they still can get out. Usually people try not to beleive in the wost case scenario. I do not blame them. It is in human nature. If that does not happen I will be more than happy because it means that situation has changed for the better.
Tony Montana……SpeedyGonzalas…AKA “ACE” Ace you know you DON’T have a pot to piss in or a window to throw it out of…………………..why don’t you take your comments and shove them up your A*#…and go on some other BLOG.Please leave this site .
I agree ONE MORE TIME. That Ace is VERY ANNOYING and should be BANNED from here.
Thank you guys.It’s about time somebody said something to that ACE lowlife.I’m surprised that Lucas dosen’t cut him off from this site.
Thank GOD that there are people out there that have the balls to stand up and express there concerns about “THE ACE” I agree that he is only trying to harm this site and Lucas’s hard work.
one more time /Mar 10, 2009 at 5:38 pm
Tony Montana……SpeedyGonzalas…AKA “ACE” Ace you know you DON’T have a pot to piss in
108 Looking 4 a deal /Mar 10, 2009 at 5:43 pm Vote:
I agree ONE MORE TIME. That Ace is VERY ANNOYING and should be BANNED from here.
109 bigguy123 /Mar 10, 2009 at 5:50 pm
Thank you guys.It’s about time somebody said something to that ACE lowlife.I’m surprised that Lucas dosen’t cut him off from this site.
110 #1investment /Mar 10, 2009 at 5:57 pm
Thank GOD that there are people out there that have the balls to stand up and express there concerns about “THE ACE” I agree that he is only trying to harm this site and Lucas’s hard work.
_____
I guess it takes 7 minutes to change the IP address.
No wonder I doubt that AJ is only one person.
i’ll agree with makes me think. new york is stocked with smart, extremely cute ladies. sure, south beach has a ton of model ass (sorry to the all the ladies that read this board, but this is a topic in which crudeness is required), but i’d rather be surrounded by cute young professionals rather than sycophantic (sic?) girls that bring nothing to the table other than a size 0 waist and some striking features. frankly, this is one of the things that drives me nuts about this city – i actually do pretty well here financially but i can’t find a girl who also does well career-wise. okay, truth be told, it’s at least nice to see the model ass walking around. makes the day a little more pleasant. for those that are curious, i’d check out the mondarian on friday nights. it’s off the charts. and the raleigh pool party is still going strong after all these years.
AJ – you know you’re voting for me on this jade debate…come on now.
MUIR, you’ve been busted.You and ACE are one and the same.If you want proof,Lucas will confirm it. HA HA HA FINALLY we GOT YOU!!!!!!!
jcrimes: re: #112
“i’d check out the mondarian on friday nights. it’s off the charts”
You can say that again ! I was visiting Miami in Jan and checked out the Mondrian on Friday night…WOW ! : ) First off the lobby, bar and pool bars overlooking the bay are beautiful….Second, the eye-candy was outstanding : ) I will visit that place again when I am in Miami…
Phil
Visionary
re: 104, totally second that.
Phil, Jcrimes,
I was at the sunset bar at the Mondrian one day and it is off the charts. The pool side is outstanding. The people who hang out here are not only cute but also have careers unlike their counterparts on the Ocean Drive and Collins clubs and hotels. It may be probably due to the fact that Mondrian is located in a high end residential neighborhood of SOBE (West Avenue) unlike the others which are located in Tourist Traps. I think Mondrian might be the place to hook up for long term with a professional against the Ocean side bars which may be good for a one night stand.
jcrimes,
I am still debating the Jade issue. For one, I am not qualified to pass a comment. Here is why: I am a middle class guy who can afford a HOA + Taxes of $1500/month on a condo that is purchased for all cash. My capacity to buy a 2/2 flat starts at 300K and tops out at 500K.
So when HOA + taxes cross $3000+, and the flat costs 600, 700, 800 K, 1 Mil and up it becomes someone else’s domain. It becomes a dig for an upper middle class or a rich person. So I do not know if I am qualified to decide if it is a good deal or not as there are enough moneyed people who will find it cheap. I think I will stay out of this one and leave it to the well heeled to make a comment.
AJ
with respect to the mondarian, the only career that i’m aware these girls are practicing is a pseudo play on the oldest career in the book.
you think west ave is the high end part of sobe? it’s primarily a rental neighborhood (even the buildings that are condo, i.e., waverly/mirador/floridian). south of fifth is far nicer.
AJ:
Really, Mondrian is in a shit neighborhood on the bay too far, so far away. Like being in Queens when you really want to go to SoHo.
Let me buy you a drink in Sofi – Prime 112, Devito’s, Red, Nemos, Prime Italian, Cozy, Piaggia and on and on. C’mon on. Mondrian? An old rehab, “sexed up” with white marble like an old whore trying for a couple more….
It’ll be hot until the summer when everything dies but barely a memory by the Fall when there will be 3 much, much hotter places. If Cipriani ever opens, that’ll be one of them.
I’m with you on this one, JCrimes.
MUIR MARK ACE are all the same. We busted him last week.
#112 Jcrimes,
NYC is no different than any other big US city. Sure there are cute, smart, professional ladies in NYC, but they are very few of them among all the other kinds. As you walk down 6th avenue or 5th avenue in Midtown, you will see a few of these among a ton of trashy, ghetto looking women. So this definitely dilutes the cuteness level overall. So yes, many towns have hot women, but NYC has them only in limited doses.
As you said, they are cute, but they don’t hold a candle to the ones in SB. And the point was of hot women, irrespective of if they are career-driven professional women or models/part time working girls of SB.
Are cute girls the only appeal of Miami/Miami Beach ??
If this is the case, I understand why the RE prices in Miami are falling so fast.
HAHAHAHHAHAHHAHAHAHAHAHAHHAH!
HAHHAHAHAHAHAHAHAHHAHAHAHAHHAA!
I AM LAUGHING SO HARD I AM CRYING, MY CHEST HURTS!
HAHAHAHHAHAHAHAHAHAHAHA!
THE FAKE POSTS BY CHE CAVERA, SPEEDY GONZALEZ, PABLO PICCASO AND SALVADOR DALI ARE TOO MUCH!!
How can no one else appreciate that?
Praise jesus for this blog, that was the best laugh I have had in years.
How are the FBs this beautiful morning?
🙂
Hi AJ and All! We think the JADE price was fair for the market at this time…..however, if we had to pick a bottom in MIAMI RE (always tough to get the timing right) would predict 2011….and possibly 75% off peak pricing so 1.9 mil x25%= $475K as a target low for 2100SQF 3BDRM at JADE…..this means many condos in Miami become $100-150K that used to be $500K. May or may not get that bad as our govt is throwing a ton of stuff at the wall and USD currency is very much at risk………At the end of the day I want somewhere luxurious and safe to live and do want a good deal. Doesn’t have to be at the absolute low. If one buys at 60% off peak and it still drops for awhile in the long run you will still be ok…….Think home not investment…..
Full page article titled “Miami’s Monument to Excess” on Page B7 of today’s New York Times. The subject – Icon at Brickell.
Here’s a link to the NYT article samson mentioned: http://www.nytimes.com/2009/03/11/realestate/commercial/11miami.html
Lucas,
I am still cheating on you by going on other sites to get the floor plans.
When are you going to introduce the floor plans for all the buildings you listed on your website?
For a start can you add Downtown, Park West and Pace Park buildings first and then expand to Brickell, Midtown, Rest of Miami and Miami Beach? I know it is a major job but it has to be one day. So sooner the better. Plug that last hole in your site.
Like the old man once told me, “It doesn’t matter what they say as long as they spell your name right”. I thought the piece was good publicity.
Where does one find listings of condos for sale/resale at Icon at Brickell? All those units and not more than a couple of listings anywhere?
I actually like the article. Someone mirrored my thoughts there. This construction boom is actually good for Miami in the long run.
It also reflected what I said before of Icon B. It is a three tower too many. It would have been a glorious project if it was just a twin tower. 3 made it very cluttered and claustrophobic especially for the units inside the triangle. Just because you got approval to build so much does not mean you should. 1800 Club had approval to build 700+ units but they settled for 469. Jorge Perez keeps talking about leaving a legacy but it did not appear to be that way in this project. If Icon B was supposed to be his masterpiece, he should not have crammed 1700 units in one place. At this many units, it does not become a masterpiece but a public housing project.
If the lenders are stupid enough to not let 10% discount happen (It needs actually 40% discount from the precon prices to sell those units), then a public auction is the only way to go. It should be stripped of all that ostentatious and garish decor, make it more functional and sell it to middle income groups.
BTW did Jorge look so old and emaciated in that Pic? Poor Chap, I think Icon B is making him lose his sleep, hair and weight.
I’m feeling anxious, I just wanna head right over to to Brickell and get me one or two condos this afternoon.
I do not want to be priced out forever.
I mean, what’s the worry, what could conceivably go wrong?
Lucas
How often do you add to or update the CONDO DEALS page? I find that section to be your most helpful and informative. Is it current?
Does anyone here no the reason why the banks (Icon-Jorge Perez) wouldnt allow him to discount his units 10%?? What is their exit strategy?? Im guessing that they prefer to “bulk” sale them rather than let Perez do one or two at a time as they realize that the “market price” is well below a 10% discount as AJ alluded to.
Muir – no worries. AJ is just having another manic episode. Yawn. Meanwhile, rents continue to decline. A condo that I was looking at had an attractive short sale price that then went up…..and now non-short sale units are coming near that price….alas none have them sold anyway…….
AJ,
Floorplans: Don’t be so demanding against Lucas. he has done a great job until now.
There are enough websites you will find detailed floorplans of the various Miami
condos,e.g. the websites of Samir.
Any update on the pricing for the 100 Condo bulk sale at Quantum on the Bay to the Israeli Investment Group?
Or when the units bought as part of the Marina Blue bulk sale hit the rental market.
Does anyone know an experienced mortgage broker who can overcome seasoning issues?
presumably jorge can’t get his construction lenders to agree to anything because the loan is probably sliced and diced several ways. the junior isn’t going to take a hit for the benefit of the senior pieces. it’s a game of chicken.
AJ,
It’ll probably be another month at least. My website developer has been busy tackling some new issues with MLS listings. These new issues have created a lot of problems. I also have a few other things that I want him to roll out first before the floor plans such as a new property search page and the stats & trends page.
Condo Vulture ACE Muir What OTHER names do you use on here?
gables – See article via link below….like I said, I have spoken. No need for $1 Trillion smart grid. No chicken and the egg problem. I have spoken. 🙂 And this is only ONE of the developments.
http://news.bbc.co.uk/2/hi/science/nature/7938001.stm
Lucas, Thanks. I think we can all wait. Good things take time.
Private Eye,
You actually got me thinking. I went back to the NY times article and found this line:
“In December, Mr. Zalewski brokered the sale of 60 condo units at another Biscayne Boulevard tower for $200 a square foot, about half the preconstruction price”
I had no idea Peter Z benefitted from this deal. Actually this guy had such a dry spell that he had no major deals under his belt for many years.
Initially I refused to believe that some people here could be paid employees of such vulture firms as suggested by someone (Kramer?). But I am actually seeing the light here.
How could a loser like Mo have the money and the manpower to start a blog and sustain it and also pay people to contribute to it unless he is being backed by some money bags somewhere. The stated goal of Mo on his site was to discourage people to buy in Miami so that he can afford to buy a flat for himself. Really!!? Do you have to start a website and a blog and go through such hell just to snag a cheap flat? You are not a saint either that you are doing this for the benefit of the general public.
This group also has the access to the MLS and and all the inside info. It suggests that some people with RE license are also involved in this game, probably from the same vulture firm. They have also subtly or openly intimidated people who dare to challenge them on this blog. I have some instances saved to prove this.
From this whole saga, I am more and more convinced that this entire exercise is not by individuals but by a group to benefit some vulture firms. There might be a couple of exceptions but I am 100% sure we have some paid bloggers here to benefit their bulk buying clientele.
This entire exercise is not as much to discourage an individual buyer but to scare up at least one developer or one banker to blink. Just imagine, if they are successful in scaring one lender/builder and make him capitulate and broker a $200 Million deal like MB, their life is made in terms of commissions. All it takes is one such deal. Just one. And they don’t have to make retail sales like selling a flat here or a flat there.
That is why all this bullshit talk of $125/sf or $85/sf etc. These guys themselves know that this is bullshit. But the real outcome they want is for some developer/banker to throw in the towel and agree to sell to these vultures in bulk for $200/sf.
This is sleaze and deception at its best.
AJ, buddy god love you but dont mistake perception for reality. The reality is that the economy is dismal and on the cliff and the reality is that the Miami condo supply is huge and demand almost non-existent or frozen. Get a grip. But i must admit that anytime someone was positive maybe 6 months ago when I first came on this blog that it took people like rentertom less than 10 minutes to respond negativley as if their weekly check depended on it. Its a far fetched notion but nothng surprises me anymore these days.
AJ
Your gonna get butchered on this one but just to be clear – when it does all clear Im bullish on downtown Miami city urban living. Now – let the mudslinging begin – lol.
Kramer,
Appreciate looking out for me. I can take the beating. I say bring it on.
Condo Vulture,
Don’t be such a clown. You are one of them. Post with your regular handle I dare you. Firstly You have the temerity to put “ACE” and “informative and enlightening” in the same breath or sentence . That takes away all your credibility. I have been on this blog for eons and all I get to read from this guy is $125/sf, monosyllables and one line retorts. If you feel that is informative and enlightening , I feel sorry for you.
And your whole shenanigan about ACE having saved you from a $400/sf deal is an outright and embarrassing lie.
CondoVultureMuirMarkAce
You are so transparent.
What is up with The Ace obsession? Geesh, let it go already.
The outlook looks poor going forward for home prices. Even the proven to be overly optimistic Roubini (he thinks he is being realistic and a bear, but time and time again he is proven to be too bullish since things got more worse more quickly then he predicted) is saying recession through the end of 2010 and Warren Buffet admits he has been taken by surprise. If only they had understood the nature of the situation with the shift down of the demand curve causing a slack in everything and the need for major adjustments in the supply structure. Those dual challenges along with the lack of debt securitization (due to trust and rising default rate even if trustworthy) to replenish credit will cause average incomes to drop and with it rents and home prices.
I will say, with some of the properties I occasionally browse, prices are starting to drift down more……the wishing prices aren’t holding up. One example is a short sale that I have watched….another seller (not a short sale) has priced theirs close to the short sale price….but even then, neither has sold. Banks will need to dump these things as the backlog is getting to be too much. No rush, but the factors are in place to get some of these things to come down in price and….even though the bottom will be here for a while…..we should see increased activity. The quicker the better regarding getting the prices down since the price declines have been lagging the sinking economy and the only way to get on top of this is to get ahead of it…….drop the price and it will sell.
AJ’s and Kramer’s paranoid delusions that a few posters are paid is probably the funniest thing I have heard all day…..I guess the mental distress is showing. Moreover, any positive comments usually have been based on utter nonsense and shear stupidity. There is no reason prices could utterly collapse. That is more realistic then any rise in prices.
I heard that 5th and Alton signed up with Best Buy, Staples on 2nd floor, Ross dress for less & TJ Max on 3rd floor and Publix on ground floor. Can anyone confirm this?
Although people are now bashing the smart money – ace, he has been proved correct in my view. I was a few months from buying a 1 bed condo as a holiday home and this website has proved very useful for me.
I dont know a lot about the ins and outs that you all know. I just know that we would like to buy a condo at a good price. I am glad I didnt now and will wait for all of this mess to settle down and then see what is available. Keep up the good work Lucas and all the posters.
A Minute with Peter Schiff
The Internet star, potential Dodd challenger and talking head who was right elaborates on his philosophy
Thursday, March 12, 2009
By Phil Maymin
He’s an investment banker in Darien and a god on the internet
By vocation, Peter Schiff is the president of brokerage firm Euro Pacific Capital, and as we chatted in his Darien office, he had the occasional client meeting or other business to attend to — and he also had a radio show, a Forbes interview and a CNN show booked for the afternoon. We even paused our conversation for him to do a 10-minute radio interview over the phone.
Why all the media? Largely, it is because Schiff was one of the few to predict the economic crash — he even wrote a book in 2007 called Crash Proof: How to Profit from the Coming Economic Collapse. A video called “Peter Schiff Was Right,” collecting many of his early prognostications with the mocking, incredulous responses from talking heads, has become an Internet meme.
A recent independent movement has been launched to encourage Schiff to run for Senate in 2010 against incumbent Democrat Chris Dodd. If he won, he’d knock out the chairman of the Senate Banking Committee. As a former adviser to Ron Paul, Schiff shares many of Paul’s libertarian views and supporters, but he has not yet decided to run, saying such a decision is at least a year away.
But though his economic views are widely known — no bailouts of any kind, let companies and banks fail, abolish or alter the Federal Reserve, return to a currency backed by gold, phase out FDIC insurance, etc. — his other political views were not as well known. Until today.
Maymin: What would you do as Senator? What needs to be done?
Schiff: The thing that the U.S. government needs to do is shrink — at least by two-thirds. What I would try to do to help the American people is to cut as much government spending as I possibly could. I would shrink the military dramatically. I would try to take our troops home from wherever they are around the world and just try to have a military that defends the borders of the United States.
So take them home from Korea, from Germany, from Iraq and Afghanistan?
Just have our military here. Protect the coasts. We don’t need to police the world. There might be a couple of small strategic bases, but we don’t need to have people in Western Europe. They’re still in Germany. What are we doing in Germany? We don’t need all these troops there. So I would take them home. We gotta abolish a lot of departments, like education, energy — all these departments just need to go.
Labor?
Yeah, labor. We gotta abolish them. We gotta fire everybody that’s working there. We’ve got to dramatically reform and phase out entitlements like Social Security and Medicaid. Try to find a way to pay something to people who that’s their only source of income, but certainly guys with means, certainly a Warren Buffet or anybody with any decent wealth, has no right to a Social Security check. So try to find a way to phase those programs out, and just dramatically shrink government. Repeal a lot of unnecessary and burdensome regulations.
I mean, look, we’ve got the SEC. Get rid of it! … Look at Bernie Madoff. People have gotten their life savings destroyed with Wall Street with the SEC protecting them, with FINRA protecting them. What the hell do we need these entities for? Get out of it. Let the free market function. Let the people do more due diligence. I’m sure that if there were no SEC, Bernie Madoff never could have existed. Because it was the SEC auditing him and saying that he was okay that made everybody think, “Oh, he must be good. The SEC is auditing him; he must be legit.” There’s no way he could have pulled off that Ponzi scheme without the SEC. Because people would have done their due diligence.
Shifting gears, how do you feel about civil liberties, the Patriot Act?
It’s a disaster. There’s nothing patriotic about it at all. Obviously it’s an unpatriotic act. It is the one of the most unpatriotic pieces of legislation they’ve ever passed.
How would you feel about the Fair Tax, a national sales tax to replace all federal taxes?
We should abolish income taxes entirely. We should abolish payroll taxes. I think it is ridiculous that American citizens have to keep records, have to hire accountants, have to go through all this effort to pay their taxes. So we need to abolish it, and the government needs to collect revenue when we spend money, not when we earn money. And it’s very simple. Just put a tax on every transaction. The rich will pay more than the poor because they spend more than the poor. There’ll be no tax evasion. There’ll be no underground economy. Everything will get taxed. But it encourages savings. So if you earn a million dollars and you don’t spend any of it, if you put it all in the bank, and therefore it’s available to be loaned out to entrepreneurs, you’re not going to pay any taxes. You’re not going to pay any taxes until you try to enjoy your money.
Which is fine, because if somebody is earning millions of dollars and living in a little shack and not spending anything, he’s like a saint. He’s basically a benefactor. He’s just putting into the economic pot and he’s not taking anything out for himself. Why should you tax that guy? That’s better than charity. That’s the best thing you can do for society … And the reforms we need for health care. We just need to go back to get[ting] the government out of health care. The only insurance that people should have for health care is catastrophic major medical, which is inexpensive and everybody can afford it, and it should have nothing to do with your job, it shouldn’t be provided by your employer — you should just buy it. That way people will take care of themselves and the hospitals — if people are really too poor, there’ll be plenty that are charitable.
Why would you run as a Republican, not a Democrat?
It seems that philosophically I’ve got more in common with the Republicans than the Democrats.
Current Republicans?
Well, the Republicans talk about smaller government, less government. They don’t govern that way but at least that’s their rhetoric. Take out the religious elements — where I’m not necessarily on board — or the social conservative aspect, but the small government wing, the Ronald Reagan, Barry Goldwater types that are in the Republican party, they’re not in the Democratic party. There’s obviously Republicans that still believe in small government, in sound money. It’s just none of the elected officials ever govern that way. That’s one of the reasons you really need to put some people in office who really don’t want to be in office. They’re just there to do a job and get out. And the job is of dismantling the government and shrinking it and restoring it to its proper function.
Lucas… I have been a contributor of this blog for a long time, but I have to say that it has gone so out of topic that it’s becoming a waste of time to read it.
Hope you get back to good posts, good information and blogger blocking when required
And how are the FBs doing this great morning?
🙂
Someone asked why Perez’ lenders on Icon Brickell wouldn’t agree to a 10% discount on asking prices for its condos. Does anyone know which institutions made the supposed $700M in loans and their pecking order (mezzanine, 1st, 2nd, etc.)? Someone on this blog said Lehman was in for $170M and LaSalle for _______. Who else?
I am with Hugo P.
I am appalled at the off topic posts and demand more conformity of thought in this blog.
Also, there is nothing quite as enjoyable or pithy as a four page post. Keep ’em coming!
HugoP
The only reason this website is such a hit is because Lucas allows everyones point of view.
The reason I came to this site and keep coming back is because I have been posting this whole time that condo’s were going lower, and enjoyed the debates with people like AJ.
That is why Lucas gets so much traffic is to read the 100 thread debates after each post he writes.
This brings lucas blog higher up on the search engines, which allows real condo buyers to see his site and click on it to use him as a realtor and make him money.
If lucas was to ban me, ace, renter tom and the like this blog would go downhill fast, would be boring, and would lose him money.
Ditto Christopher Housing Fear.
This is a great blog. It is fun to read and extremely informative. I am addicted. I hope nothing is changed and only rarely are posts blocked.
First, let me be clear that I don’t think bullish bloggers like AJ should be banned. I also enjoy his views (as wierd as they might seem) and someone has to balance the discussion.
Second, I am all for Lucas making money. This information although provided at no cost to us, should have benefits for him.
Third, I also love this blog and the discussion. Been reading it for a long time.
Finally, my reference was more to the 50+ “Ace” posts (or whatever name he decides to use) talking nonesense and bashing everyone else. That is not helping this blog all.
For example, I suggest that anyone who blogs using different names should not be allowed to post anymore (Lucas can check ths with the IP’s) . That way, you have an interesting discussion where people can actually learn something. Just a thought.
Wow! I am agreeing with Christopher on this one. Even though some of these guys give me an upset stomach, I don’t want to see anyone banned unless they are malicious like Mo.
Hi Kelly,
You benefitted from this blog in general. From the multitudes of smart and intelligent people who are too many to name. Not from Ace. You can go back and read all his monosyllable posts and tell me honestly if it was not a joke. The only time you will find any $150/sf deals (ordinary buildings, Class III) and $250/sf (premium waterfront buildings with views, Class II) are if they are in foreclosure or a distress slae (Absolutely do not count bulk sales. They are not a measure and are not meant for you and me). There have never been these foreclosure prices across the board. If you are actually waiting for the whole market to settle at these levels and not even keeping your eyes open for a foreclosure, you are making a big mistake.
I will still standby by my earlier predictions that when ever the bottom hits in 2009 or 2010 the Class III buildings may settle across the board for $200/sf and the Class II buildings may settle at $250/sf for the city view side of the building and $300/sf for the water view side of the building. I used the word ‘may’ and not ‘will’ because it may not even go that low if things turn around quicker than anticipated. Who knows?
I would refrain from venturing into any predictions of Class I buildings such as Continuum, Apogee, Four Seasons etc. as they cater to a completely different market.
Goodluck with your home search.
AJ,
Towelie has a question for you:
“You wanna get high?”
I’m not sure he was talking about price.
Geitner was on tv.
“TIMMEEEEEEEeeeeHhh!”
Hi Kelly,
Alternatively, you can go to Pace Park hook up with AJ.
At some point he’ll ask: “So, you wanna get high?”
If he is talking about dope, go for it.
If he is talking about Real Estate, make a run for it.
Everyone is not a crackhead like you.
I think we need to take a dispassionate review of some macro factors:
(1) Over building of condos in South Florida is historic and is overweighted on the higher end price range.
(2) Millions of American households are no longer millionaire households (http://money.cnn.com/2009/03/11/news/economy/millionaires_2008/index.htm?postversion=2009031115) with about 28% fewer affluent with $500K-$1M investible net worth, 27% fewer millionaires with $1M or more, and 28% fewer very rich of $5M or more compared to 2007 levels.
(3) Foreigners are getting financially hit worse than Americans.
(4) For many, these condos were targeted as an additional home, not as a primary residence and so are more of a discretionary purchase and most probably not an “investment” as rents only cover some of the carrying costs and the asset price continues to decline.
So, who is going to buy these expensive condos??? Who can contradict this stuff?
Schiff lost a lot of money this year too.
http://www.businessinsider.com/2009/1/peter-schiffs-clients-got-hosed-this-year-too
Peter Schiff’s Clients Got Hosed This Year, Too
Joe Weisenthal|Jan. 26, 2009, 10:44 AM|20
Sure his on-air sparring makes for some great TV. And his pointed criticism of the stimulus plan is spot on, especially at a time when people believe the answer to our pile of debt is to spend like crazy. But that doesn’t mean Peter Schiff has been an amazing steward of his clients’ cash.
Michael Shedlock punctures the Schiff aura, saying he’s heard from several clients who claim losses of 40%-70% after investing with EuroPacificCapital. How could this be? Hasn’t Schiff been bearish during a horrible year for US equities? Yes, but that negative on US equities was just a part of his overall strategy
Shedlock sums Schiff’s complete thesis:
US Equity Markets Will Crash.
US Dollar Will Go To Zero (Hyperinflation).
Decoupling (The rest of the world would be immune to a US slowdown.
Buy foreign equities and commodities and hold them with no exit strategy.
Schiff was correct about point number 1 above. The US equity markets crashed. That was a very good call. Unfortunately, his investment thesis centered on shorting the dollar in a hyperinflation bet, and buying foreign equities rather than shorting US equities.
Furthermore, Schiff made no allowances for being wrong and had no exit strategy whatsoever.
What happened in 2008 was that foreign equities sold off much harder than US equities, and a strengthening US dollar compounded the situation.
Bottom line: Not all doomsayers are going to make money in a bad investment. And you can be extremely sharp and insightful with your analysis, but it doesn’t mean your investment theses will pan out. In fact, there’s frequently a disconnect between people who call for doom and their actual results
Smart Money <————-This is you head
AJ <—————————This is you head on crack.
And I rest my case.
In 3 years when average Miami condos are still be unloaded well below $100…and probably as low as $75/sqft, readers of this blog will find it funny that we laughed at The Ace…and The Ace will be pretty tired of “apologizing” for all the deals that have gone below $125/ft.
Rich “investors” that are supposedly going to prop up the Miami condo market (yeah right) are going to be too busy counting their losses from the 2009 Depression.
$75/ft
And, I rest mine.
(silence)
Bailiff says verdict is in.
(silence)
(silence)
Foreman read verdict:
“On the one count of condo insanity, we the jury find Muir, not guilty.”
“On the one count of condo insanity, we the jury find AJ, gu____.”
[AJ rushes the bench with a pocket comb, scream at Judge “but Real Estate ahhh” and is shot by the bailiff.]
Another sad episode of FBs gone wild.
_
Renter Tom /
“I think we need to take a dispassionate review of some macro factors:
(1) Over building of condos…
(2)….
(3) Foreigners are getting financially hit worse than Americans.
(4) ….discretionary purchase and most probably not an “investment” as rents only cover some of the carrying costs and the asset price continues to decline.
So, …Who can contradict this stuff?
RT,
WAY, way too rational for this blog.
COCKATOO MUIR ACE And all you other phoney LOWLIFE’s you should all be ashamed of yourselves for wasteing everybodys time reading NONSENSE ………….. and lets not forget CONDO VULTURE. SHAME SHAME SHAME ON YOU ALL!!!!!!!!!!!!!!!!!!!!!!!!
Finally, a response.
___
You know, I think Private Eye is ACE or Mark having fun.
I used to think it was AJ.
Oh, well.
By the way, these comments are all over the Internet now.
I’ve seen them in 3 sites.
Your famous AJ!
And so are CHE CAVERA, SPEEDY GONZALEZ, PABLO PICCASO AND SALVADOR DALI
NO MUIR….I’m not Mark Ace or anyone else you’d like to believe YOUR not.I think the majority of the readers of this Blog…..have your # by now. YOUR A PHONEY.With very little to do but DEPRESS this BLOG.
Does Anybody else other than ( the phoney posters ) have anything to comment about this??
AJs stats 30/177 = 17%
Ok, Private at ease.
How long have you been a FB?
p.s. I tried stats, FED reserve charts and studies, Case-Schiller, newspapers and common sense.
Then it hit me!
FBs do not even read contracts.
They mark “X” on the closing docs.
Muir
Maybe I’m Renter Tom lara J crimes ???? I wouldn’t waste ANYBODYS time like YOU. Pitiful you are.
I am writing an e mail to Lucas ….requesting that he eliminate all the SCUMBAGS from his “extremely informative blog”which is appreciated by most of the readers on here.If other readers do the same,I’m sure LUCAS will take immediate action.Let’s get back to a useful ,informative and helpful site. Not a pissing match for a bunch of CRAZY YAHOOS.Please fellow readers …support me if this is what you want.LUCAS please keep up the HARD WORK and EFFORT you put into this Blog. Thank you very much.
Maybe I’m you, thought about that?
private eye
chill the hell out. you don’t like a post, skip it. you don’t agree with an opinion, destroy it. your focus on the poster, who he or she is, or for that matter how they live, is inane.
In an effort to bring joy to the World.
Legitimate reasons for buying a condo in South FL at this time.
1. Because you want to. No explanations needed. Nobody’s business. End of story.
2. Because you are about to be sued or have a profession where this is a distinct possibility.
I am not trying to promote my blog on Lucas site, because my blog pretty much blows.
However, my most recent post is a hilarious compilation of comments from this thread that I think you will all enjoy.
http://www.housingfear.blogspot.com
Thanks AJ and Muir, one of the good things about this site is that everyone is allowed to voice their views and long may it continue. Out of the posts written, there is always something interesting, funny, new to learn. Some of the posters live in Miami and can see the developments first hand so that can only be a good thing. RT, Lara, etc etc all have points to make and I feel are welcome. Looking forward to reading more in the future, keep up the good work Lucas.
One thing I have learned through reading this blog and comments and in general is that when I/we do buy a holiday home without a doubt it will be in Miami, when? I dont know but it will be in Miami.
Lucas,
What about a new post ?
Given 2009’s wealth destruction to date, it is not unreasonable to say 1/3 of the “affluent” households with $500K in investible wealth, millionaire households with $1M, and “very rich” with $5M+ are GONE compared to 2007. That is incredible if you think about it. Add to that fear and a resignation that there is no bottom in any asset class in sight for the most part and one has to wonder if rents will set the price for condos going forward…that is, the historical rent to price ratio and the same type of analysis to see if the investment in real estate makes sense whether it be residential, commercial, etc. One needs to make a return on ones investment outside the preservation of capital of real estate in real dollar terms (don’t even think about factoring any REAL appreciation). If that is the case, one has to think that these condos have a ways to go downward. Look at the MLS rents Lucas has made available and then do the calculation for what the asset is worth. I look at homes in the midwest and the home prices in most areas “makes sense” but down here in South Florida they don’t. It looks like the deals will keep coming and coming in 2009 and beyond. I just don’t see people rushing in on the past inflated prices.
Last night Jim Cramer (CNBC Financial News Network analyst) was on the Dailey Show With Jon Stewart. One of the most illuminating and insightful interviews about why we are in this financial mess. Jon Stewart destroyed the credibility of CNBC and Jim Cramer. By a comedian no less. Absolutely brilliant. Must see TV. I think you can see it re-run at Hulu.com.
I saw the Jim Cramer episode…..while Jon Stewart was blunt, he came prepared to not reconcile with Jim Cramer that’s for sure. Where was Jon Stewart when the market was going up, up, up? Easy to criticize now….and I don’t think CNBC is quite the promoter that Jon portrayed. There are various opinions albeit overall CNBC is more optimistic than pessimistic. I watch CNBC during the day when in the condo….or at least have it on to listen to while doing other things….and I didn’t lose 30-50% of my networth. CNBC is one source of information and the buy and hold strategy isn’t dead, just don’t buy at the wrong price….same with condos. Too bad Jon Stewart wasn’t criticizing home prices and condo prices! Where was he then? Where is he now? I’d love to see an episode about the housing bubble….heck, world traveler, wealthy wannabe and dj AJ could go on as a guest. LOL
P.S. That one building with the short sale now has TWO non-short sale units competing at or below that price……and NONE of the three have sold. Those three units are setting the price ceiling as others will have to come down.
Heck – I didn’t even lose 10%……Now that I think about it, I out performed Warren Buffet in 2008!
RT
Think you missed the point.
Stewart is not a financial annalist.
That’s the point.
CNBC are clowns.
I laugh at the show most of the day. Sometimes they are funnier than Stewart.
I have no idea how many suckers have been taken down by CNBC.
I know that none were taken down by The Daily Show.
That’s the point, again.
RT
Home prices “make sense” in the midwest and not Miami because you always have and always will pay a premium for the luxury to live next to the Atlantic Ocean when the temperature is 75 degrees Farenheit in January and February plus access to a degree of cultural assets not available in the midwest save Chicago. Major League sports teams – restaurants – shopping- the arts. Not in the same league as New York or London but enough to pay a premium. Art Basel – Miami City Ballet – New World Symphony – Fairchild Tropical Gardens – etc. I agree that the economy in general has more decline forthcoming, along with a Miami Condo price decline, but your measurement of rent equilibrium needs some adjusting upward.
Is this the beginning of the foundation for the death spiral plunge of the Dollar? Usually they don’t talk about this kind of thing openly. Looks like the gloves are coming off. See the line about Clintons happiness about China’s continuing largess to the US. Pathetic. All it will take for China to precipitate the crisis is to sell just $100 Billion worth of Treasuries out of their total USD holdings worth about $1.4 Trillion. The World will go crazy. Will it happen? Your guess is as good as mine. But if it does don’t tell me I did not warn you.
May I exhort you all to buy a US dollar denominated asset on a long term loan with a fixed low interest rate. Such as a flat in Miami. All cash buyers, you can afford to wait a little while longer (may be another 12 months) for another 10% drop in prices before they hit the bottom. But those who are financing 70-80%, start acting now.
Read the story:
“Premier Wen Jiabao called on Washington to ease worries Beijing has about the safety of its vast U.S. assets.
In his annual news conference ending the nine-day session of China’s ceremonial parliament, Wen said Beijing expected to see results from President Barack Obama’s economic recovery plan but expressed concern that massive U.S. deficit spending and near-zero interest rates would erode the value of China’s huge U.S. bond holdings.
China is the biggest holder of U.S. government debt and has invested an estimated 70 percent of its $2 trillion stockpile of foreign exchange reserves, the world’s largest, in dollar assets.
“We have lent a massive amount of capital to the United States, and of course we are concerned about the security of our assets. To speak truthfully, I do indeed have some worries.
“I would like, through you, to once again request America to maintain their creditworthiness, keep their promise and guarantee the safety of Chinese assets,” Wen said.
U.S. Secretary of State Hillary Clinton voiced her appreciation during a visit to Beijing last month of China’s continuing “well-grounded confidence” in U.S. Treasuries.
Any big switch by Beijing out of U.S. Treasury bonds would drive prices lower, inflicting the very losses Wen fears. Still, his remarks, along with the lure of surging share prices, helped depress U.S. Treasuries in Asia.
China’s central bank weighed in later with criticism of America’s “inappropriate” economic policies, including low savings and high consumption, and said the global crisis had its roots in what it called an unchecked issuance of dollars.”
Well, RT, as of today, I’ve outperformed the SP for the last 14 years!
(Actually Tom, accounting for deflation, you’re up.)
Glory is fleeting Tom.
Remember that.
This is just beginning.
Kramer said, apparently with a straight face: “Home prices “make sense” in the midwest and not Miami because you always have and always will pay a premium for the luxury to live next to the Atlantic Ocean when the temperature is 75 degrees Farenheit in January and February plus access to a degree of cultural assets not available in the midwest save Chicago.”
– Wow, if that were true, then rents would be high and make sense to the prices. Why is it different this time? Miami used to have cheap home prices and rents were in line with such prices. Rents pretty much stayed along the historical trend line in Miami during the housing bubble, but prices did not. Rents are the driver and it is ridiculous to believe that warm weather would drive up home prices but NOT rents. You pay a “premium” for owning but not for renting? If anything, seasonal rents should be high compared to owning. Come on, you need to rethink your post. It doesn’t matter where you live, rents tie into prices (or will again soon in the bubble markets) no matter the “cultural attractions” or the warm weather…… Anyway, off to the beach …. looked like rain 30 minutes ago so waited. But what do I know, I’m renting at 1/2 price of owning!
AJ – your 194 post shows your ignorance about preserving and accumulating wealth. Owning a condo doesn’t help much with all of its expenses such as taxes and HOA fees that will more than keep pace with inflation, owning cash flow positive rentals or farmland is better idea.
Muir – Don’t need to worry about me……I’m confident enough to know what I don’t know and don’t pretend to know more than I can know.
RT
You ask where was Jon Stewart when the stock market was up and the real estate bubbl e and why wasnt Jon Stewart complaining and exposing it on his show. You got to be kidding. He’s a comedian for gods sake. Its not his job and he brilliantly related that IT IS the job of CNBC and Jim Cramer and the like to do just that that. Isnt that why they went to journalism school. Arent they there to expose the thieves and help protect our 401k’s and IRA’s and Keogh’s and pension funds. Isnt that their reason for being on the air and not promoting the investment world as a get rich overnight casino. Isnt that what journalists are supposed to do? 30 to one leverage and not a peep from CNBC or the fact that this was all done and promoted by Bush Treasury Secretary Hank Paulson as alluded to by Jon Stewart in the TV clip. Think about it – it took a comedian (albeit a dam smart one) to expose the failure of CNBC to be doing what it was supposed to be doing and not promote shyster shows they have on the air every day called – MAD MONEY or FAST MONEY or SQUAK BOX.
Here is the latest on the Big Gorge loan saga at Stalingrad (ICON):
http://boston.bizjournals.com/boston/othercities/southflorida/stories/2009/03/16/story3.html?b=1237176000^1792961
Related could use extension on $500M Icon Brickell loan
South Florida Business Journal – by Brian Bandell and Oscar Pedro Musibay
********************************
The Related Group wants a break on its 1,800-unit Icon Brickell project, which has a nearly $500 million loan coming due in June.
The developer could seek an extension until December, but is exploring other options, with public records showing only 17 condos sold so far.
One of the nation’s most prominent condo developers, Related has opened its largest project ever at the most difficult time.
It’s an unfortunate twist for CEO Jorge Perez, who has a business association with the Miami Dolphins owner Stephen Ross, who runs the Related Cos. in New York City.
Sales are a huge challenge in today’s real estate market, even for Related Cervera Realty Services, which sold more than 6,000 units during the last nine years in South Florida. Icon has prospective buyers, but getting a mortgage for a high-rise unit in Miami is daunting.
Related has completed sales on just 446 units out of 3,395 among its South Florida buildings with outstanding mortgages, court records show. The mortgage debt on Related’s local projects, excluding money paid to banks from the sold units, is $1.8 billion. That includes $89 million for seven sites where construction has not begun.
Broker: Lenders have to be flexible
The developer’s bottom line: Lenders have to be flexible and understand that they are partners with the country’s most successful condo builder to get through these hard times, explained Alicia Cervera Lamadrid, CEO of Related Cervera Realty Services, which took over sales at Icon in December. Perez is a part owner of her firm.
“The lenders are going to get Icon to the finish line,” she said. “Whether they like it or not, the lenders are part of the problem and the lenders need to be part of the solution.”
Perez has been trying to communicate just that, in a series of interviews he has done about Icon with various media outlets from The New York Times to The Miami Herald. Perez did not grant the Business Journal an interview.
A company statement said: “We are negotiating with our banks to allow the extensions and assistance necessary to give us the time and flexibility to maximize asset value, and we believe there is nobody stronger than Related to achieve the desired results.”
Lamadrid said the options under consideration include bulk sales and lease-purchase contracts. However, she emphasized bulk buyers are not being viewed as the project’s savior. She said Perez is open to having an investor take an equity stake in the project.
“The solution at Icon is end loans,” said Lamadrid, who sees her company selling units at Icon for some time.
HSBC Realty Credit Corp. can extend Related’s $502 million mortgage on Icon from June until December, if certain conditions are met. Shares of HSBC (NYSE: HBC), a London-based bank, recently had volatile trading amid efforts to raise $17 billion.
Related willing to negotiate on price
Peter Zalewski, a principal of Bal Harbour-based Condo Vultures Realty, which generates condo statistics and brokers sales, said the average square-foot price in the Brickell area is $400. So, for now, bulk buyers would not consider Icon as a prospect.
“Anyone buying today is buying with cash,” he said. “They are looking for steep discounts, and $500 to $700 a square foot is not a discount. That is a deal killer, that price.”
Lamadrid countered that Related is willing to negotiate on price, but Icon justifies pricing via its amenities, views and location.
Icon, along with Related’s other South Florida condos, are not realistic rental options for lenders because of the splashy amenities and large units, said Lewis Goodkin, president of Miami-based Goodkin Consulting.
Goodkin said that, even if Related’s mortgage holders give the company more time, sales and rentals in these projects probably could not support the debt servicing costs.
Goodkin said the lenders would have to dramatically write down the principal balances of Related’s notes to make the numbers work as rentals or market-rate prices. That would be a bitter pill, but lenders might prefer that to taking control of Related’s projects, he said.
“Who the hell is going to do a better job than Perez in working out that project?” Goodkin asked.
*******************************
ONE PERCENT CLOSING RATE (17 of 1,700) AFTER THREE MONTHS!!!
The Grim Reaper is sharpening his scythe and the fat lady is midway through her “warm up”!!
RT,
I don’t Tom, trust me.
I come here for the entertainment.
Nevertheless, if you keep listening to CNBC with their pimping of BRIC and such nonsense, you’ll end up bunking with AJ.
Now, if additionally, you keep listening to Ann Coulter on FAUX you’ll end up at Pace Park mumbling about conspiracies while smoking that bad dope AJ has.
17 / 1800 = 0.00944444444
“The Related Group wants a break on its 1,800-unit Icon Brickell project, which has a nearly $500 million loan coming due in June.
The developer could seek an extension until December, but is exploring other options, with public records showing only 17 condos sold so far.”
SECOND PART OF ABOVE STORY on RELATED:
THE DETAILS:
These are the major outstanding mortgages, with banks and date of last modification, to entities affiliated with the Related Group and the sales data of the company’s South Florida projects. It was compiled from court records.
Projects completed with outstanding loans
ICON Brickell, Miami
Mortgage for Towers One, Two and common areas: HSBC Realty Credit Corp. $502 (2006) million. Matures on June 18. Can be extended to Dec. 18.
Mortgage on Tower Three: HSBC $176.5 million (2007). Matures on Nov. 16.
Deeds issued: 17 (all in tower one) out of 1,800 units from Dec. 5, 2008 to Feb. 5, 2009.
Project also includes Viceroy Hotel
Trump Towers in Sunny Isles Beach
Mortgage on Tower One: Wachovia Bank $153.5 million (2005)
Mortgage on Towers Two and Three: Wachovia $345.7 million (2006)
Deeds issued on Tower One: 133 for 271 units from January 2008 to March 4, 2009.
Deeds issued on Tower Two: 39 for 271 units from July 30, 2008 to March 4, 2009.
Tower Three is nearing completion of 271 units.
500 Brickell Condo, Miami
Mortgage: HSBC $177 million (2005)
Deeds issued: 220 for 633 units from May 19, 2008 to March 3, 2009
CityPlace South Tower, West Palm Beach
Mortgage: Bank of Nova Scotia $134.7 million (2008)
Condo Units: 420
Deeds issued: 37 for 420 units from September 2008 to Feb. 24
Under construction:
Trump Hollywood
Mortgage: Lehman Brothers Holdings $226.6 million (2007)
Units planned: 200
Construction not started
Trump Tower Palm Beach
Mortgage: City National Bank of Florida $24 million (2006)
TRG – Block One, Miami
Mortgage: City National Bank of Florida $21 million (2007)
Apogee (later phase), Miami Beach
Mortgage: Wachovia $13 million (2006)
Related entitle sold four parcels for $5.5 million in 2008.
Icon Las Olas, Fort Lauderdale
Mortgage: Bank of American $11.3 million (2008)
Units planned: 272
TRG New River, Fort Lauderdale
Mortgage: City National Bank of Florida $10.5 million (2008)
Related Lofts III, Miami
Mortgage: HSBC for $5 million (2007)
Units planned: 495
TRG Brickell Station, Miami
Mortgage: Commerce Bank (now TD Bank) $4.4 million (2007)
Totals
Mortgages outstanding (before sales factored in): $1.8 billion
Units completed: 3,395
Deeds issued: 446
Un-Related,
Well Un-Related, I think you made a strong case for why “Now it’s a great time to buy or sell Real Estate.”
And specially, remember, “All markets are local.”
I can’t believe why HSBC put all its eggs in Related basket. The Hong Kong & Shanghai bank is one of the good conservative London banks and how they got carried away is puzzling. The idiot in HSBC who approved so many loans to Related should be skinned alive (if it is not done already).
Renter Tom, you must not have paid attention to CNBC when it is on. Maybe you’ve never seen Gim Goldman reports on Google or Apple or RIMM. If that’t not cheerleading then I don’t know what the hell is. Some guy came on the show and blasted Jim Goldman for his coverage of the tech companies, I felt bad for Goldman because he got blasted really bad. Lets not forget about Bob Pasani he is another one. They are nothing but cheerleaders for the market and I believe there in a large part responsible for the hype that has led to the vast amount of wealth destruction that has taken place during the past 2 bubbles.l
oops!
“there in a large” should be “they are in a large”
Time to face the facts. Icon Brickell will be a rental building. They should convert everything to apartments and target the Flamingo South Beach crowd of porn crews, bartenders, and party all nighters.
Although, they would have to charge LESS than the Flamingo, because lets not forget….this is BRICKELL – where people go to live when they can’t afford South Beach.
Excerpts from a recent interview with Salvador Dali, Tony Montana, Speedy Gonzalas, Pablo Picasso and Che Cavera collectively known as The Five Amigos.
By Peter Shift
Pete: Amigos, now that you have become overnight Internet sensations in your defense of The Ace AKA The Smart Money what are you future plans?
Tony: I hate these cocka da roaches but I like de Ace he my little fend.
Speedy: Buy me a taco stand outside the Jade to serve the squatters.
Che: Start a HOA revolution.
Pablo: Buy a Condo and paint it black.
Salvador: Fame and fortune are abstract suppositions so I’ll have to think on that one.
Pete: Speedy, you were the first to rush to The Ace’s defense have you actually meet The Ace?
Speedy: Nah he to fast for me.
Pete: Have any of you meet The Ace?
Pablo: One time I had de tequila and I saw two Ace’s den I realize I’m playin da pokher.
Tony: He my little fend.
Che: No but he da man wid de $125 sq inch for de women and I likes dat.
Salvador: The Ace is too abstract to meet but I can paint a Condo black just as good as Pablo.
Stayed tuned for Part 2 of Peter Shifts interview with the Internet sensations The Five Amigo’s
The Five Amigos
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
APPLAUSE
APPLAUSE
APPLAUSE
APPLAUSE
APPLAUSE
APPLAUSE
🙂
🙂
It’s as I suspected.
All are alter-egos of the ACE.
ACE <——– rocks
hats off with a nod to the Smart Money
The Ace on behalf of The Smart Money would like to thank all those that have shown there belief in The Smart Money with a special mention to The Five Amigo’s and Peter Schiff.
Remember: One hundred and twenty five Amigo’s per square foot.
The Smart Money
f$%k this cnbc nonsense. if you’re relying on CNBC for financial advice then you deserve what’s coming to you.
in any event, stewart blows…kilborn used to kill with his five questions (his beatdown of kathy ireland is still memorable)
un-related…if you think icon is in bad shape, wait to you see what happens with marquis. that’s all i can say for now.
And the good news just keeps on coming….
As foreclosed properties spread, Miami-Dade springs into action
Miami Herald
http://www.miamiherald.com/news/miami_dade/beaches/story/947663.html
jcrimes said: “un-related…if you think icon is in bad shape, wait to you see what happens with marquis. that’s all i can say for now.”
Yeah, that one could set the standard for FLOPS….it could be ZERO CLOSINGS and those Israelis are 99% sure to default. That piece of crap should NEVER have been built.
MUIR …. ACE …. THE FIVE AMIGOS ..aka (the 5 lowlifes) are VERY VERY SICK BLOGGERS. POOL your $ 100 each and buy Chico (or whatever his name is …and buy him a Taco stand.)Maybe you can all freeload a free meal off him. HA HA HA LOSERS.
SSB – The problem is, those party people are going to have there credit cards revoked! Moreover, Internet porn will slow for the same reason……. LOL
With regard to CNBC, people wouldn’t watch without some “excitement”. On CNBC I watch Robert Shiller, Nouriel Roubini, Joe Battipaglia and many others tell it like it is. CNBC is just ONE source of information, period. CBNC might not have caught the meltdown, but neither did Warren Buffet or the other multitudes that people are attempting to pin the conspiracy on….who will get the credit as stocks come back? Anyway, Cramer did a poor job on that show…..oh well. Jon Stewart’s mom was stupid to leave so much of her money in stocks at her age…just stupid. Everyone knows, or should know, asset allocation is one of the top three fundamentally important investment decisions….with that said, being all in in real estate is a poor asset allocation for 99.99% of people.
Those closing numbers for Trump Towers One and Two is consistent with the Trump guy told me this last week.
The Smart Money will sell Speedy a Taco Stand for $125.00
The Smart Money moves into the restaurant business.
Thats about ALL “THE ACE” could do with his FLUNKY FOLLOWERS is make a $125 sale.Have a nice evening…..I’m just opening a bottle of 1983 DOM PERIGNON…a toast to the 5 flunkies………………CHEERS
Seriously Ace, how old are you?
It’s Friday night in the MIA, shouldn’t you be out somewhere chasing some tail?
Could it be that the Smart Money doesn’t own a car and can’t afford companion?
Thinking about doom and gloom. What’s going on with Everglades on the Bay?
The Smart Money sipping cordially on an interesting Bordeaux, a 1787 Chateau Lafite with our new found fends The Five Amigo’s.
The Smart Money never without dumb friends or a fine wine.
Who’s more famous on the Internet Blog scene Peter Schiff or The Ace.
Personally I’m convinced that they are one and the same but as to the Five Amigos that remains a mystery but dame, are they funny so funny in fact they ought to have there own TV show!
I used to read this Blog once or twice a month but since I’ve become an Ace/Schiff fan I read it almost daily and now the Five Amigos, too much! I’ll be back daily for Part 2 of Schiffs interview.
Private Eye:
I am sorry to hear that ’83 Dom is all you have on your shelf. If I have any Louis XIII left after my soiree this evening, I will courier a bottle to you. Where do you live by the way ? Is it a luxury penthouse at the Vue on Brickell ? 😉
We still insists that we are Muir.
Muir, member of the Smart Money
“Lunch is for wimps.”
Maybe we could do a Spartacus thing.
“I am The ACE”
Muir:
I agree. “Lunch is for wimps”
and
“Sheep Get Slaughtered”
Cockatoo
I am the Ace!
As a Sommeliar for a 5 Star Restaurant that shall remain nameless for legal reasons I have taken the liberty of comparing the wine choices of both The Ace and Private Eye.
First let me start with Private Eye whose excellent choice was a bottle of 1983 DOM PERIGNON at an average price of $125.00 per bottle. This French number has an excellent bouquet with a hint of raspberry, hickory wood aged but unfortunatly no where near as good as a Dom 53.
Next up is The Ace’s choice; again a French little number a 1787 Chateau Lafite. A delightful red wine, a rich full bodied flavored Bordeaux at $125,000 per bottle. Simply put this is the Rolls Royce of wine selection an extrodinary wine without peers as no other wine comes close.
Clearly The Ace is a man of wealth and taste whose been around for a long long time but can we guess his name and the nature of his game?
Peepeelapoo
Whatever 5 star restaurant PEEPEELAPOO works for…….I feel sorry.I think Jack in the Box is hiring.I’ll put in a good word for you.Or maybe try Checkers ….where “ACE” flips burgers.
Icon Brickell Fact Sheet
March, 2009.
Location: 495 Brickell Avenue, Miami, Fl 33131
Developer: The Related Group
Architect: Arquitectonica
Project Milestones
Expected Completion: Tower 1: November 2008
Expected Completion: Tower 2: December 2008
Expected Completion: Tower 3: February 2009
Tower 1
57 stories
• Parking: 11 Levels of Parking- Located on floors 1 and 4-14 (excluding 13) of Tower 1
• Penthouse Units: 11 single story Penthouse units and 4 two story Penthouse units
• Units: 715
Tower 2
57 stories
• Lobby: 2nd Floor
• Penthouse Units: 7 single story Penthouse units and 4 two story Penthouse units
• Units: 561
Tower 3
Viceroy Resorts and Residences at ICON Brickell
50 stories
• Total of 148 Resort Units
• 50th floor(Rooftop) Pool, Restaurant and Lounge area
• Units: 520 units
Common Areas
Entrance Area
Enter through Icon’s multi-level entrance area with 100 columns designed by Philippe Starck and modeled after the Maoi structures of Easter Island. Each column will be unique in size, shape and finish yet all will be 22 feet tall and have Philippe Starck’s signature. The space will be open to Mary Brickell Park to the South and to Biscayne Bay to the East. The arrival area will accommodate all three towers, with drop off sections for each lobby and for the two bayside restaurants.
Lobby
The Tower One, Tower Two, and Condo Lobby in Tower Three exhibit the unique designs of Philippe Starck as well. With great emphasis on bringing the outside in, the 22 foot high ceilings in the entrance area will continue inside and the color theme from the outside will be brought in through the yellow glass at the entrance.
Pool Deck Level
Our two acre pool terrace sits over 100 feet above Biscayne Bay and features a series of three infinity edged pools including a reflection pool where furniture may sit in the water, an oversized thermal hot tub, and a longer than Olympic sized lap pool. Rows of stately trees line the chaise lounges and beds on either side of the pool and enclose the outdoor living area that holds the oversized fireplace and life-size chess set. Icon’s pool deck will also feature a full service restaurant and a pool side café. The luxurious amenities of the Viceroy Hotel will offer à la carte drink and food service, wine tastings, and relaxing Tai Chi classes in our amphitheater style seating area overlooking the Bay.
Spa and Fitness Center
One level below the pool deck, with direct views of Biscayne Bay get lost in Icon Brickell’s 28,000 square foot spa with amenities normally associated with a 5 star resort. This space holds a Theater room designed by Philippe Starck, a large cardio and free weight center with beautiful views of Key Biscayne, aerobic, yoga, pilates, and spinning facilities, a large plunge pool area available for events or quiet relaxations, his and hers treatments rooms, lounges, redwood saunas, and eucalyptus steam rooms.
Restaurants
There are 5 places to enjoy a meal at Icon Brickell. For a like snack or a morning coffee visit the Pool side café. For a spectacular lunch or dinner, visit our pool side Viceroy Signature restaurant or select from one of the two bayside restaurants on the lobby level. Late at night visit Club 50, our sky lounge for some light dining.
Club 50
Visit Icon Brickell’s exclusive rooftop pool and lounge with spectacular views from the 50th floor and designs by Kelly Wearstler. Enjoy signature cocktails, light dining and a sophisticated atmosphere without ever having to leave your home.
Features and Amenities
Building features:
• A 10-acre enclave, including 2 parks, book-ended by Miami Circle Park and Brickell Park
• 1000 feet of water front with shaded rest areas and a path for walking or jogging
• A dock in Biscayne Bay where residents and visitors can moor their boats
• Ultra contemporary architectural design by Arquitectonica
• Smart building technology with a screen panel in all residences as well as wireless technology on the sky terrace and in other common areas
• Full time concierge staff offering a full range of services including housekeeping, laundry, and dry cleaning in Tower 3
• A 24-hour valet and a receiving desk for mail and packages
• Multi-level covered parking
Residence features:
• Breathtaking views of Biscayne Bay, downtown Miami, Key Biscayne, and Miami Beach
• A variety of spectacular floor plans for the ultimate in urban living
• Oversize terraces with glass railings accessible from bedrooms and the living room (see your individual floor plan)
• High efficiency central air conditioning and heating unit
• Sprinkler fire protection system
• State-of-the-art telecommunications wiring including high-speed cabling to all television outlets and “home run” configured CAT5 cable for telephone and data communication
• Smooth 9-foot ceilings
• Floor to ceiling laminated windows with energy efficient tinted glass
• Sub-Zero/Wolf kitchen appliance package
• Top-of-the-line stackable washer and dryer
• A choice of two Italian kitchen cabinet designs
• Kitchen counter tops French limestone, Blue St. Tropez limestone or Black Absolute Granite • Bathrooms by Yoo by Starck with a choice of classic-style French limestone bathroom flooring or cultural-style Blue St. Tropez limestone bathroom flooring
• Yoo by Starck upgrade options including lighting fixtures, Venetian mirrors, bathroom accessories and French or Blue St. Tropez limestone flooring throughout the unit
Kitchen Features:
• Flush European style cabinets
• 36” Panel Ready Sub-Zero refrigerator/freezer
• 30” Wolf glass cook top
• French or Blue St. Tropez limestone or Black Absolute Granite counter tops and backsplash to match (see your individual floorplan)
• Double Stainless Steel sink
• Pull-out spray faucet
• 30” microwave oven
• 30” Wolf Stainless Steel dual convection oven
• Bosch Panel Ready dishwasher
• Garbage disposal
Master bath features:
• Marble flooring
• French or Blue St. Tropez limestone vanity top with porcelain lavatories
• Designer faucet
• Air bath bubble system (see your individual floorplan)
• Elongated water closet
• European style bidet with coordinating faucets (see your individual floorplan)
• Walk-in limestone shower (see your individual floorplan)
Guest bath features:
• Marble flooring
• Integrated porcelain vanity top and lavatory
• European style cabinets Elongated water closets (see your individual floorplan)
• Designer faucet
And you thought The Ace was just a pretty face.
The Smart Money, we do our research.
Here is one observation, I know someone that owns 10+ condos in the Miami area, including a couple of condo-hotels that were around $1000/s.f. The guy has plenty of money but still got roped into the condo mania. Finally, he is resigned to taking a significant haircut on his units and is now listing them for sale. In the end, I estimate he’ll be out over $2M (probably much more) and of course the opportunity costs with monkeying around with this stuff for 5+ years. Everyone needs a hobby I suppose. His problem is that he is BEHIND the curve……paid no real attention to me when I suggested he get ahead of the curve last year. Can’t blame him though, denial is powerful. For some reason he thinks people will be willing to just pay off his existing mortgage…..BUT there are finished units listed for less than that in the same building and those aren’t selling. He is not under financial pressure per se, but I’m sure he’d like to get these losing monkeys off his back. I can’t even image the weight of having an ICON…….from the stats that were recently published, ICON is doomed and the last hope of say Perez will do the best job in this environment seems to smack of desperation, the bank has choices.
On a related note, airplane repo’s are at an all time high!
http://www.dcexaminer.com/opinion/columns/scottott/Geithner-boosts-NASA-funds-to-probe-cosmos-for-bail-out-cash-41197697.html
“Just a day after U.S. Treasury Secretary Timothy Geithner proposed increasing U.S. contributions to his former employer, the International Monetary Fund (IMF) by $100 billion, he offered another plan to increase funding for NASA….”
Un-related:
Thanks for the article on ICON. As you said, total debt on ICON Brickell is roughly $700M, interest on which, at, say, 5%, is nearly $100,000 a day plus, of course, real estate taxes, insurance, nominal amortization, utilities, staffing and overhead, maintenance, etc.
We need the ACEs opinion on the ICON.
Any profits there?
Please respond mighty oracle of “The White Goddess of Cities.”
A few comments about ICON Brickell. It looks great from outside. I like the pool area…it is huge and sits above the parking lot. The building right on the river/bay will have great views.
I am actually working next door to Icon (711 Brickell) and can see icon and the bay from the office window.
First day I was supposed to be @ 711 Brickell @ 9 AM. I live in the grove and it normally takes about 7-9 minutes with moderate traffic. I actualy get to withing a block of 711 brickell withing 5 min, but spend about 20 min stuck at the traffic light. The bridge over the river opens up for boats and it must have been a lot of boats…as I was stuck there in traffic. From my office windows, I saw the bridget opening/closing many times a day. This would be super annoying to me if i had to put up with this day in day out.
I guess if i liked @ ICON brickell, i would have to put up the the opening/closing of the bridge all the time.
Peepeelapoo I’d like to take a guess .Who is Ace and what is his game.From what I’ve read on here,and this is my first posting.ACE is an idiot that has nothing else better to do than waste HIS and LUCAS’S readers time.He has probably lost money on a condo ,and everything he ever owned and is very bitter about it.That is why he is trying to ply his $125 a sq. ft. nonsence to everyone.ACE probably paid $625 a sq. ft.and realises that he blew his brains out. SORRY ACE.That is my guess.ANYBODY else want to speculate???
Been ranking ’bout the darn draw bridge for a while now.
Brickell lovers don’t seem to get it. Oh well, love is blind I guess.
It’s still not too late for many. Buy in Downtown, Park West and Pace Park if you want to keep your sanity. If you think it is bad now, wait till you see the mayhem in 3 years from now when all the new buildings in Brickell get filled up.
I just reviewed some of the past postings. #32 written by JAY pretty well sums up what ÀCE`ìs all about .FRAUD FRAUD FRAUD.
The Related Group Seeking a Buyer or an Investor for the Just Opened
Viceroy Hotel at Icon Brickell in Miami’s Financial District
The Related Group, whose new Icon Brickell is saddled with a hefty debt load, is looking for an investor or buyer for the project’s hotel component. Jorge Perez, chairman of the Related Group, recently recruited Holliday Fenoglio Fowler in Coral Gables to find a buyer or an investor for the Viceroy Hotel, Resorts & Residences at Icon Brickell in Miami’s financial district. The hotel opened last week at 501 Brickell Ave.
If a deal goes through, the cash could help Perez pay down Icon Brickell’s $176.5 million construction loan from LaSalle Bank. The loan is set to mature in November, according to Miami-Dade County property records. Executives of the Related Group did not return calls for comment. Representatives of Holliday Fenoglio confirmed they were marketing the property but declined further comment.
The 150-room luxury hotel is part of the 50-story building in Perez’s Icon Brickell development. Although the hotel is part of a high-profile project, it’s a bad time to be seeking a buyer, several real estate experts explain. “There is no financing available for hotels, and occupancy and room rates are going down,” says real estate broker Abraham Wien. “The only reason someone would put a hotel on the market at this time is because they are in financial trouble.”
Related recently completed the three-tower Icon Brickell, which has a total of 1,700 units. Closings at Tower I began in December, and so far only 17 condo sales have been recorded with Miami-Dade County. Contract holders of more than 120 units are suing Related in an effort to get out of their purchase agreements.
Related built six condo projects in Downtown Miami and the Brickell Area during the 2002-2007 housing boom. Icon Brickell is the last project to come on line. The market value of a hotel, as with most income-producing properties, is largely based on its revenue history. Determining the value of the newly opened hotel will be difficult.
“Selling a hotel in today’s market without even having a track record, means they are going to have to accept a price that is probably not much more than their construction cost,” says Mel Roth, president of International Mortgage & Equity Advisors of Florida in Parkland. “Without a track record, you have an asset that no one knows what it is worth. You are not going to be able to sell it at a premium under any circumstances. It is absolutely impossible.” That means Perez may have to sell at a discount. Wien, who often represents European and Latin American funds, indicates his clients are only interested in cut-rate properties.
Hotel buyers that need financing are likely to come up empty-handed, Roth adds. “It is more difficult to get a permanent loan on a brand-new hotel than it would be getting a construction loan to build a hotel,” he says. Lenders will finance about 65% of the value a hotel if the operator can prove its net operating income generates at least 140% of the debt coverage, he explains.
Roth knows how hard it is to land financing since the financial market began to implode in late 2007. After more than a year of negotiations, he helped secure a $250 million loan in October to complete construction of Met 2 Financial Center in Downtown Miami. Met 2 will be an office tower that will include a hotel under the JW Marriott Marquis Hotel Beaux Arts name. Roth had initially negotiated the loan with Bank of America and Wachovia, but as the credit market deteriorated, the banks had to join forces with HSBC Bank, RBC and Bank of Scotland to come up with the $250 million loan.
In relation to the hotel market, the recession is taking a toll on tourism, one of Florida’s main economic engines. Owners are seeing room rates slide and occupancy levels drop. Miami’s Downtown and Brickell areas saw the hotel occupancy rate fall to 60.8 % in December 2008 from 64% in December 2007, a drop of 5.1%, according to the Greater Miami Convention & Visitors Bureau. Countywide, the hotel occupancy level declined by 8.5%. Daily room rates in Downtown and Brickell slipped to $168.30 from $189.90, a drop of 11.4%. Countywide, room rates declined 6.6%.
“We are now at a point where we have peaked in terms of rates and occupancy,” says Guy Trusty, a hospitality consultant in Coral Gables. He explains that the hotel industry began a downward trend in early 2008, after almost seven years of growth.
Hotel values across the nation are expected to plummet by up to 30% in 2009, reveals Scott Smith, vice president of the Atlanta office of PKF Consulting, a hospitality and real estate advisory firm. In an indication of falling values, declining revenues are increasing capitalization rates, a measure of cash flow that determines a property’s market value. In the last year, cap rates of luxury hotels have increased one to two basis points, to more than 8.5%, lowering the market value of properties, says Wien, with Holly Sime Real Estate in Coral Gables. “It means your money goes further as a buyer,” adds Trusty.
Kor Hotel Group, which also operates the Tides in Miami Beach, is introducing the Viceroy brand to South Florida through Icon Brickell. Hotel rates at Viceroy Miami start at $500 a night. The fact the hotel flag doesn’t have much name recognition in the region won’t help boost the sale price or improve the chances for financing, Roth comments. Kor did not return a call for comment before deadline.
In the last six months, Related has refinanced and sold at big discounts condos it couldn’t sell at two of its new high rises in Miami-Dade. In December, Related’s TRG-Harbour House affiliate sold 101 units for $27 million in Bal Harbour’s New Harbour House, a condo conversion project. Related sold the units at prices as much as 60% below the cost of units sold to individual buyers in the last two years.
In July, Related sold 146 condos for $36.4 million in the 50 Biscayne condominium tower in Downtown Miami. The bulk buyer at 50 Biscayne was a company owned by Related and an equity partner, Lubert-Adler Partners of Philadelphia. Related and Lubert-Adler bought out Atlanta-based Cousins Properties, which built 50 Biscayne in partnership with Related. The price per unit in the 50 Biscayne bulk purchase averaged $247,739 at a time when individual condos on Biscayne Boulevard were selling for an average of about $309,936. A few months later, Related and Lubert-Adler financed some of the condos acquired in the bulk deal with a $20.87 million loan from Prudential Insurance Company of America.
If Related doesn’t find a buyer or investor for the Viceroy, the company may have to negotiate with LaSalle Bank for a loan extension. “The natural thing to do in today’s market is you go back to the construction lender, who has to recognize that there is no financing available for a hotel with no track record,” says Roth.
Private Eye,
“The White Goddess of Cities” was a reference to Miami.
____
Land sales therebegan to boom, and by 1925 theboom was in full bloom. Developerschristened Miami the “WonderCity,” the “Fair White Goddess ofCities,” and the “World’s Play-ground.” Ft. Lauderdale becamethe “Tropical Wonderland.” Someland fortunes were made in just afew months.Inside lots sold for up to $20,000,and seashore lots-even those miles TOP: Charles Lindberghwith his “Spirit of St. Louis”after his famous solo flightacross the Atlantic. ABOVE:The love affair with theautomobile filled the lives ofmillions during the ‘Roaring20s.’ LEFT: Flappers some-times concealed flasks intheir garters to evade Pro-hibition. 31
Page 5
and miles from Miami-skyrock-eted to as high as $75,000. Manyunknowing investors bought lotssight unseen from shady promoters-and later found their land to beworthless, under 10 feet of water or in a swamp.
____
“The White Goddess of Cities” first appeared in the Miami Herald in 1925.
___
The Smart Money seeks to educate those less fortunate.
Muir
The Related Group, whose new Icon Brickell is saddled with a hefty debt load, is looking for an investor or buyer for the project’s hotel component. Jorge Perez, chairman of the Related Group, recently recruited Holliday Fenoglio Fowler in Coral Gables to find a buyer or an investor for the Viceroy Hotel, Resorts & Residences at Icon Brickell in Miami’s financial district. The hotel opened last week at 501 Brickell Ave.
If a deal goes through, the cash could help Perez pay down Icon Brickell’s $176.5 million construction loan from LaSalle Bank. The loan is set to mature in November, according to Miami-Dade County property records. Executives of the Related Group did not return calls for comment. Representatives of Holliday Fenoglio confirmed they were marketing the property but declined further comment.
The 150-room luxury hotel is part of the 50-story building in Perez’s Icon Brickell development. Although the hotel is part of a high-profile project, it’s a bad time to be seeking a buyer, several real estate experts explain. “There is no financing available for hotels, and occupancy and room rates are going down,” says real estate broker Abraham Wien. “The only reason someone would put a hotel on the market at this time is because they are in financial trouble.”
Related recently completed the three-tower Icon Brickell, which has a total of 1,700 units. Closings at Tower I began in December, and so far only 17 condo sales have been recorded with Miami-Dade County. Contract holders of more than 120 units are suing Related in an effort to get out of their purchase agreements.
Related built six condo projects in Downtown Miami and the Brickell Area during the 2002-2007 housing boom. Icon Brickell is the last project to come on line. The market value of a hotel, as with most income-producing properties, is largely based on its revenue history. Determining the value of the newly opened hotel will be difficult.
“Selling a hotel in today’s market without even having a track record, means they are going to have to accept a price that is probably not much more than their construction cost,” says Mel Roth, president of International Mortgage & Equity Advisors of Florida in Parkland. “Without a track record, you have an asset that no one knows what it is worth. You are not going to be able to sell it at a premium under any circumstances. It is absolutely impossible.” That means Perez may have to sell at a discount. Wien, who often represents European and Latin American funds, indicates his clients are only interested in cut-rate properties.
Hotel buyers that need financing are likely to come up empty-handed, Roth adds. “It is more difficult to get a permanent loan on a brand-new hotel than it would be getting a construction loan to build a hotel,” he says. Lenders will finance about 65% of the value a hotel if the operator can prove its net operating income generates at least 140% of the debt coverage, he explains.
Roth knows how hard it is to land financing since the financial market began to implode in late 2007. After more than a year of negotiations, he helped secure a $250 million loan in October to complete construction of Met 2 Financial Center in Downtown Miami. Met 2 will be an office tower that will include a hotel under the JW Marriott Marquis Hotel Beaux Arts name. Roth had initially negotiated the loan with Bank of America and Wachovia, but as the credit market deteriorated, the banks had to join forces with HSBC Bank, RBC and Bank of Scotland to come up with the $250 million loan.
In relation to the hotel market, the recession is taking a toll on tourism, one of Florida’s main economic engines. Owners are seeing room rates slide and occupancy levels drop. Miami’s Downtown and Brickell areas saw the hotel occupancy rate fall to 60.8 % in December 2008 from 64% in December 2007, a drop of 5.1%, according to the Greater Miami Convention & Visitors Bureau. Countywide, the hotel occupancy level declined by 8.5%. Daily room rates in Downtown and Brickell slipped to $168.30 from $189.90, a drop of 11.4%. Countywide, room rates declined 6.6%.
“We are now at a point where we have peaked in terms of rates and occupancy,” says Guy Trusty, a hospitality consultant in Coral Gables. He explains that the hotel industry began a downward trend in early 2008, after almost seven years of growth.
Hotel values across the nation are expected to plummet by up to 30% in 2009, reveals Scott Smith, vice president of the Atlanta office of PKF Consulting, a hospitality and real estate advisory firm. In an indication of falling values, declining revenues are increasing capitalization rates, a measure of cash flow that determines a property’s market value. In the last year, cap rates of luxury hotels have increased one to two basis points, to more than 8.5%, lowering the market value of properties, says Wien, with Holly Sime Real Estate in Coral Gables. “It means your money goes further as a buyer,” adds Trusty.
Kor Hotel Group, which also operates the Tides in Miami Beach, is introducing the Viceroy brand to South Florida through Icon Brickell. Hotel rates at Viceroy Miami start at $500 a night. The fact the hotel flag doesn’t have much name recognition in the region won’t help boost the sale price or improve the chances for financing, Roth comments. Kor did not return a call for comment before deadline.
In the last six months, Related has refinanced and sold at big discounts condos it couldn’t sell at two of its new high rises in Miami-Dade. In December, Related’s TRG-Harbour House affiliate sold 101 units for $27 million in Bal Harbour’s New Harbour House, a condo conversion project. Related sold the units at prices as much as 60% below the cost of units sold to individual buyers in the last two years.
In July, Related sold 146 condos for $36.4 million in the 50 Biscayne condominium tower in Downtown Miami. The bulk buyer at 50 Biscayne was a company owned by Related and an equity partner, Lubert-Adler Partners of Philadelphia. Related and Lubert-Adler bought out Atlanta-based Cousins Properties, which built 50 Biscayne in partnership with Related. The price per unit in the 50 Biscayne bulk purchase averaged $247,739 at a time when individual condos on Biscayne Boulevard were selling for an average of about $309,936. A few months later, Related and Lubert-Adler financed some of the condos acquired in the bulk deal with a $20.87 million loan from Prudential Insurance Company of America.
If Related doesn’t find a buyer or investor for the Viceroy, the company may have to negotiate with LaSalle Bank for a loan extension. “The natural thing to do in today’s market is you go back to the construction lender, who has to recognize that there is no financing available for a hotel with no track record,” says Roth.
Miami condo king Jorge Pérez battles to survive real estate slump
Rising from city bureaucrat to billionaire builder, Jorge Pérez became the great American success story, Miami style. The Cuban immigrant made the South Florida skyline his canvas, erecting high-rises from Miami to West Palm Beach.
But not one of them can compare to his latest creation, the ICON Brickell, a sumptuous $1 billion glass-and-concrete city within a city that includes three soaring towers, a pool the size of a football field, 1,640 condos, a boutique hotel and five restaurants.
It is Florida’s most spectacular condo, Pérez’s masterpiece, his legacy.
And, now, it may be his undoing.
Pérez is scrambling to survive one of the most turbulent moments in Florida real estate history. His company — The Related Group — has lost more than $1 billion in the last year and confronts nearly $2 billion in debt. The ICON, responsible for much of that debt, sits largely empty as those who made 20 percent preconstruction deposits either flee or find themselves unable to get a mortgage.
Last month, Pérez met with dozens of bankers at the Hilton hotel in downtown Miami, asking for more time to pay off the debt, mostly due this year. As he waits for the bankers to decide, Pérez’s landmark project hangs in the balance.
The ”total meltdown that we are seeing today,” Pérez said, is far worse than he ever imagined.
“In order for us to succeed, we need help from our lenders.”
It’s a new and scary time for Miami’s Condo King. But betting big — and sometimes losing big — has always been part of the craps game that is South Florida real estate.
In 1920s South Florida, George Merrick created Coral Gables, only to be derailed by the Florida real estate bust, the hurricane of 1926 and the onset of the Great Depression.
Miami Beach land baron Carl Fisher peddled a vision of tropical paradise to Northerners, becoming fabulously rich. Eventually, he, too, would go bust.
The real estate meltdown is Pérez’s hurricane, but he says he’ll never end up broke.
For three years, he has been included on the Forbes List of 400 Richest Americans. And yet, last month, when Forbes called about including him in its upcoming list, Pérez told them: “Forget about it.”
BUILDING HIS FORTUNE
Pérez was an economic development director with the city of Miami before he decided to become a developer. In 1979, he founded The Related Group with New York builder Stephen M. Ross, who recently bought the Miami Dolphins. Pérez first became rich by building low-income apartments across the state, then branched off into rental apartments before becoming the most prolific high-rise luxury condo builder in the country.
He displayed a knack for spotting markets before they got hot, and then acting quickly. Pérez and Ross built City Place in West Palm Beach, a mixed-use project of residences, shops, offices and public spaces. (Ross is chief executive of his own firm, Related Companies in New York City, and holds a minority stake in The Related Group in Miami, which operates separately.)
In Miami Beach’s formerly blighted southern tip, Pérez built the high-rise towers Portofino, Murano, Murano Grande, Apogee, Yacht Club and ICON. Sunny Isles Beach is dotted with his projects.
But he made his biggest splash on the long-ignored streets of downtown Miami. Starting in 2002, Pérez erected a dozen towers totaling 5,500 condo units.
Pérez brought restaurants into an area that was previously shut down at dusk. He moved his company’s headquarters into the central business district, preaching the need for a 24-hour urban center and a reversal of the trend toward sprawling suburbia.
”When they write that Miami went from a downtown that emptied out at night to suburban bedroom communities and made that uncomfortable transition to a real, urban city — when they write about that in 20 years, they will write about Jorge Pérez,” said Stephen Bittel, chief executive of Terranova, a real estate owner and broker.
THE GOOD LIFE
As Pérez’s buildings grew in height and expense, so did his outsized personality and affluence. He bought a Citation 10 jet; in addition to his five-bedroom waterfront home in Coconut Grove, he acquired vacation homes in Punta del Este, Uruguay, and Deer Valley, Utah. He has a Ferrari Modano Spider for weekend driving; shirts and ties from Turnbull & Asser (the London haberdashery favored by the Prince of Wales); and suits from Italian designers.
In 2005, he made the cover of Time magazine as one of the 25 most influential Hispanics in the United States. That same year, The Related Group was recognized as the country’s biggest Hispanic-owned business. The University of Miami named its architecture center after Pérez.
Until recently, 2009 figured to be his crowning moment. The Related Group is marking its 30th anniversary. When his partner, Ross, agreed to buy the Dolphins, it initially seemed likely that Pérez would buy a stake in the team. And the staunch Democrat, who has mused about one day becoming an ambassador, at last had a kindred spirit in the White House. Pérez has hosted both Bill Clinton and Barack Obama at his home.
What’s more, his boldest project yet, the ICON Brickell, was scheduled to open.
Designed by Arquitectonica, and rising near the banks of the Miami River, ICON is a metaphor for the high-flying exuberance of Miami’s housing boom.
”Do you think anyone else builds something like this?” said Pérez, his arm sweeping as he showed off the two-acre pool deck, framed by Japanese blueberry trees.
The complex has its own boutique hotel, the Viceroy Miami. To run the Viceroy’s restaurants, Pérez hired acclaimed New York chef Michael Psilakis and partner Donatella Arpaia, whose Manhattan eatery, Anthos, was nominated for a James Beard Award and won a Michelin Star.
French designer Philippe Starck provided a range of whimsical features for the ICON, including more than 100 22-foot columns that mimic the statues of Easter Island, an immense outdoor fireplace crafted of French limestone, and oversize chess pieces adorning a walkable chessboard.
”Starck was almost crying when he came in,” said Pérez, “thanking me for having the audacity to build this.”
REVERSAL OF FORTUNE
Then, the meltdown.
It will take at least three years to sell or rent all of ICON Brickell’s condos, Pérez said. Of the first 400 people who contracted to buy, only 30 closed. They couldn’t get financing or didn’t want to buy with property values still plummeting.
Pérez is seeking relief not only for ICON, which alone accounts for $700 million of his debt, but for Trump Towers in Sunny Isles Beach, Oasis in Fort Myers, City Place South Tower in West Palm Beach, 500 Brickell in Miami, and the under-construction Trump Hollywood in Hollywood. Along with seeking more time to pay his debt, he is asking bankers to loosen mortgage-lending restrictions so buyers can get credit.
The Related Group has long been viewed as a company with the financial heft and savvy to survive an extended downturn. And while it is distressed, other developers have fared worse.
Already, the credit crunch has leveled several seasoned real estate companies, including WCI Communities in Bonita Springs, which sought bankruptcy protection, and Fort Lauderdale’s Levitt & Sons, which simply liquidated.
‘If all the lenders said today: `Pay me the loans that we have with you now — with no breaks in interest, no extensions,’ I think you will see nobody left standing.”
Does that include The Related Group?
”Absolutely,” Pérez said.
At the meeting with lenders last month, Pérez and his financial advisory firm, Algon Group, made a pitch for patience.
The bankers could decide to take back the properties, extend the terms of his loans, or sell the debt to other investors. Pérez himself has ruled out a fourth option: simply walking away.
”To me, [the bankers] wouldn’t think about putting someone else in his place,” said real estate analyst Lew Goodkin. “I don’t think they’ll get someone who is comparable.”
The uncertainty has weighed heavily on Pérez.
“You first look at it and say, `My God, I could lose this, this and this. My God, banks are going to call for loans and I have to talk to them, which I’ve never done in the past. My God, what is the community going to think?’
‘Then you say, `What are the things that are important? . . . Have I built buildings that I think are true expressions of what I wanted to create, that were honest to what I wanted to do?’ The answer to those questions is yes.”
REDUCING COSTS
Pérez is reorienting his company in a bid to survive the downturn. Already, he has cut costs, laying off more than one-fourth of his employees. The workforce now stands at 400.
Despite his vast wealth, Pérez has been known to pinch a penny. He has greeted associates for a morning business flight on his private jet, clutching a plastic bag of bagels from Publix. For a recent conference in Utah, he decided to forgo his jet and fly commercial.
He is prospecting for new revenue sources: reentering the government-supported housing sector, creating a real estate consulting business, and scaling back while still looking for building opportunities in Latin America. Last year, he set up a ”vulture fund” to buy distressed properties — including his own.
He won’t be building more condos in South Florida anytime soon.
”My business as I know it doesn’t really exist anymore,” he said of the condo boom gone bust.
In retrospect, Pérez said he wished that he had done more to weed out speculators from buying units.
He also said builders — including him — should not have started to believe that South Florida was different, casting aside traditional methods of gauging housing demand. And he said he was wrong to assume that second-home buyers would continue to stream in from the Northeast, Latin America and Europe.
But Pérez insisted that if it hadn’t been for the credit crisis last fall and bankers reining in lending, his remaining condos would have sold. ”Six more months, I would have been out,” he said. “Could I guess that all the banks would go bad? Did anybody guess that?”
Pérez had ”an unmatched record in the condo business,” said Neisen Kasdin, an attorney and former Miami Beach mayor who sits on the Miami Downtown Development Authority. “The only thing he did is stay in the game too long. If Jorge had not done that last handful of projects, he could have quit at the top of the game.”
MERRICK, FISHER, PEREZ
Pérez insists that his company will survive the current economic upheaval and says ICON Brickell will ultimately be viewed as a key component in the urban renaissance he has spearheaded in Miami.
Pérez said he is more interested in leaving a legacy of livable urban centers — buzzing street life; residences within walking distance to restaurants, schools, shops, parks and offices — than in being a billionaire.
”If I die and am worth $50 million as opposed to $3 billion, it is really not important,” he said. Until his recent setbacks, Forbes pegged his wealth at $1.3 billion.
He hopes to be remembered as Merrick and Fisher are: for transforming South Florida in a lasting way.
”You think when they remember them, they remember them because they went bankrupt?” Pérez asked. “No, they’re remembered for what they created.”
“Land sales therebegan to boom, and by 1925 theboom was in full bloom. Developerschristened Miami the “WonderCity,” the “Fair White Goddess ofCities,” and the “World’s Play-ground.” Ft. Lauderdale becamethe “Tropical Wonderland.” Someland fortunes were made in just afew months.Inside lots sold for up to $20,000,and seashore lots-even those miles and miles from Miami-skyrock-eted to as high as $75,000. Manyunknowing investors bought lotssight unseen from shady promoters-and later found their land to beworthless, under 10 feet of water or in a swamp.”
_____
Nothing changes, suckers to be had all the time.
_____
Smart Money member, Muir
Lucas,
Now you are getting spammed by a couple of arse holes. Get rid of these last few posts and you may also want to quarantine these rabid dogs for a while. Seriously, I am getting tired of even logging on to this site and reading this rubbish, and mind you, normally I do have a lot of patience.
Ok,
Miami Condo Raffled for Charity
“A Florida couple is being creatively charitable in the raffle to sell their Miami Beach condo. The housing market has prevented Tim Suereth and Diane Thorne from selling their waterfront 850-square-foot condo, equipped with new floors, new cabinets, a pool, and a courtyard. So they came up with a bright idea to pay off their mortgage while raising money for a charity they organized for wounded war veterans.
Raffle tickets are being sold for $100, and if at least 5,000 tickets are sold, the condo will be “sold” to one ticket holder. If $500,000 isn’t raised, they’ll keep the condo and split whatever money they do raise between a winner and their charity, called Veterans Retreat. But if the minimum is met, the couple will use the $500,000 to pay off their mortgage and buy a retreat in the Florida Keys where wounded veterans can relax for free. What do you think of this concept?”
It could be worse….
NYT
http://www.nytimes.com/2009/03/15/realestate/keymagazine/15Key-Hamptons-t.html?pagewanted=1
A Cold Season in the Hamptons
“no longer an unknown phenomenon in the Hamptons. The situation hasn’t become as dire for the vast majority of sellers, but brokers say they have seen a distinct rise in the number that they delicately describe as “motivated.” When the rich run into financial trouble, the vacation home is often the first thing they try to unload.”
“….MOST DAYS of the week, Brady drives around the Hamptons, ringing bells at homes that are in danger of foreclosure. He gets the addresses from mortgage-default notices publicly filed by lenders or from banks’ confidential lists of homeowners who are at least 30 days behind on their payments. Lenders filed around 260 default notices”
AJ
the interesting thing about the article, which i didn’t notice before, is perez admitting that his company, or perhaps the subs, are technically insolvent.
doesn’t matter much to perez though – i suspect he’s going to walk out of this losing nothing. my related friend has told me you won’t find perez’s name on any guaranty with his lenders. he’s sitting in the driver’s seat with his lenders along for the ride. absent another big time developer offering to buy the debt at a discount and knocking perez out, there’s NOTHING the lenders can do here for the foreseeable future…it’s in perez they (unwillingly) trust. savvy motherf#$ker.
at some point though, the lenders will have no choice , will have to declare the loans in default (frankly, i don’t see how the loans are already not categorized as non-performing based on the applicable loan loss reporting analysis, namely, perez saying he can’t pay back the loans) and take their losses. until then, perez can figure out an exit strategy. only problem is he can’t rent these things (too expensive) and can’t sell them, either individually or in bulk (again…too expensive). the third strategy is???
Excellent posts Ace I’ve been telling a friend of mine who was thinking of buying a Condo in the Icon that I thought the building was in serious financial trouble and your posts confirm it.
SSP = Special Sensory Perception?
Jcrimes (#255). The third strategy is indeed “???”. 🙂
I personally would not mind living in Icon Brickell. It is big enough where you dont necessarily need to go out on weekdays when you come home from work. The gym/pool and maybe a coffe shop would take care of most of my needs. Taking the people mover around downtown would get around the draw bridge issue.
But prices have to come down and property taxes have to come down. I dont know how long that is going to take. Property tax lags atleast a year after the prices are cut.
Someone on this blog had remineded all of us on what happened in the 80’s…i.e you get the condo for free if you pay Taxes and HOA. Maybe that is the ultimate solution. Banks write down the loands (i.e total loss)…city takes over and gives away condos to people who are willing to stay in for x number of years and pay taxes and hoa. Lets see what happens.
I was one of 3 people (IIRC) that mentioned the 80s story.
I do not see taxes coming down quickly.
This is a looong game, we’re maybe in the 4th inning.
Prices will be coming down for years. It will be a slow agonizing death by a thousand cuts for many.
It seems AJ is all for freedome of speech….his own, and no one else!
Carbon
don’t entirely disagree. it’s a cool building. but the concept (utterly ridiculous luxury) is entirely wrong for the neighborhood today (and probably for another five years). it also doesn’t help that the units are, on the whole, unimpressive.
i’ve mentioned miami in the 80’s a few times before. they were crazy times…ask an old school bank/bankruptcy/real estate lawyer about it…i’ve heard the anecdotal history from these guys…to reiterate, crazy times.
that said, i don’t think we’ll see that this go around – back then, the banks doing the lending were local bank that didn’t offload this stuff once originated. they were getting killed and had no one stepping up to buy the debt or units in bulk. in today’s market, i have to imagine there’s enough opportunity money out there that will swoop in well before it reaches “0.” perhaps a testament to the ever increasing integration of the global economy.
regardless, icon brickell has a long way to go (down) before a rental or a bulk sale strategy makes sense. i just don’t see a third option – he won’t be able to sell these things fast enough on an individual basis. whether rental or bulk, jorgie boy needs to really work the bank….in short, either route requires the bank to take a MASSIVE haircut on the loan: the property doesn’t cash flow in its current state to cover debt service, and if you do a rental, the realistic rents you can charge won’t cover the debt service either. this is the same problem facing a host of projects in miami right now. if the loan is participated out, or if there is mezz debt (not sure on this project), then i don’t see anyone taking a haircut. too many diverging interests…classical prisoner’s dilemna.
What would ACE know about ICON???? Except get a job there as a valet parking jockey.
What would ACE know about ICON???? Except get a job there as a valet parking jockey.
jcrimes – Obviously Perez has been around long enough to know not to be personally liable for any debt. Wonder if he set up a separate business entity for each project or even ones within a project (such as for the hotel, for the retail, etc.). I’m not sure about what all the intricate financing entails…..and most lenders wouldn’t care as long as they got paid what was due. Perhaps all the lenders could say they will all write down 50% of their loans for ICON, let Perez run the show if he really is the best for the project and for all the lenders, and come up with a sharing agreement among the lenders to share on any upside? From all reports, ICON is a financial bust… an ICONic bust at that. Aside from turning it into a giant porn studio or high end brothel, there isn’t a lot that can be done that will turn a profit…..unless it became a giant grow house like on Weeds??? Add to that the Trump Towers disaster and I’d say Perez is hurting way beyond his worst nightmare. If only his project were completed in early 2007
– On another note, does anyone have any info on the St. Tropez condo/mixed use project in Sunny Isles Beach? Have been meaning to stop into their sales office. Are the retail spaces leased? Are the condos still selling or were they sold out? Pricing? Any closings in the east tower yet? Anyone planning on closing???? If the St. Tropez is priced around $200 s.f. or so, then it would put pricing pressure on the Oceania beachfront condos and the lower priced La Perla as it would compete for the available buyers at the lower end price scale (low end compared to Trump, Turnberry, the Jades, etc.). Seems that people are buying….albeit slowly in La Perla primarily because of the lower prices compared to the other higher end projects. That same market may be interested in St. Tropez at a lower price since it is right across the street and has similar views as many of the units in La Perla. Nearly all the rents in La Perla are under $3K per month and I suspect St. Tropez will be lower if rentals occur there. Will be interesting to watch what St. Tropez does with respect to units in the 1990’s beachfront Oceania’s and La Perla……..
To Poster #263 & 264
If you took the time to actually read what the Ace wrote in posts 242,243,245 & 246 concerning the ICON instead of posting useless drivel you’d see quite clearly he is the definitive expert on the subject.
If you read the Miami Herald article, Jorge seems to intimate that his personal wealth is getting rocked by the condo slump so I imagine he’s got a lot of skin in Icon Brickell in some way.
I think it means that Ace knows how to cut and paste from other sources, not sure that makes him the definitive expert, definitive plagiarist perhaps.
BOBBY J Thank you…..I’m glag to see I’m not the only one that confirms that “ACE ” is nothing but a FRAUD and a PLAGERIST and a TIME WASTER. He not only wastes his own time…..but EVERYONE elses.. GO AWAY ACE.
UNDERWATER and MARCO aka “ACE” Who do you think your fooling.??? Ha ha ha and how many other ALIAS’S you have?
SEE WHAT I MEAN?????? “THE ACE” is the BIGGEST AS%#@!hole on this site.He is turning fellow readers off in great #.’s What do you have to say about that ACE ??
jcrimes said: “if the loan is participated out, or if there is mezz debt (not sure on this project), then i don’t see anyone taking a haircut. too many diverging interests…classical prisoner’s dilemma.”
I believe the $75 – $100 Million Lehman was some “new form” of mezz debt. Some banko judge will have to figure that piece out.
Big Gorge is lucky he operates in Miami, not Dubai. They already would have buried him under the debtor’s prison!!!
RenterTom: In reading the herald article and watching the online videos of his interview, i got the distinct impression that Jorge Perez was “wiped out” by this. He said that he has been putting money away in places where even he cant “touch” and that he personally be be fine no matter what happens. I got the impression that he is basically wiped out by the market downturn. Most (if not all) of his net worth was his stake in “Related Group” and if the Related Group is insolvent, his stake in Related is worth zero. Ofcourse, he will still be a millionaire as I am sure he has his “own money” outside of the related group stake.
I think it is sad to see someone like his go down like this. His was an immigrant success story and (arguably) did a lot for miami.
The comments are getting way out of hand. There’s a difference between people being free to express their own opinions and those who just want to be childish. I’m not going to tolerate the latter. Unfortunately, The Ace changes his IP and uses various aliases (at least 5 that I’ve seen). Hopefully, he realizes that his childishness is ruining the discussion for everyone.
Maybe if everyone ignore the post we suspect to be “The Ace” he will get discouraged and find a busy intersection to play in.
carbonblackcab – I agree, no matter what people think of Perez, it is an incredible story and accomplishment. Sad that he was “all in” on his recent project and might be “wiped out” of his large fortune, I would hazard a guess that he has significant personal assets that won’t go away, but the billionaire thing is in the past. He was fairly frank about the matter in the articles that I have read. All I can say is best wishes and he’s accomplished a lot.
“I think it is sad to see someone like his (sic) go down like this.”
Sad? Are you kidding me? This guy had like 40+ projects in the pipeline in ’05…how could a real estate “expert” like Perez not foresee the problem? He’s just a moden day snake oil salesman, who reeled consumers in with deceptive advertising and fluffed-up marketing methods and either couldn’t deliver a final product or did deliver but with much lower standards than originally presented. I have no sympathy for a guy that made terrible, miscalculated business decisions and that caused so much financial pain for people who unfortunately bought in some of these projects for END-USER purposes, esp ICON, who are now fuc*ed. Keep in mind these units were sold to consumers as INVESTMENTS, and buyers were reassured by hot Colombian women sales agents that they’d be able to flip these things like pancakes and continue to turn huge profits. Just another pyramid scheme…the last one left holding the bag gets screwed.
Lucas, thanks for your opinion on the subject -“There’s a difference between people being free to express their own opinions and those who just want to be childish”. At least some one cares.
I hope that gives an answer to that guy who asked “It seems AJ is all for freedome of speech….his own, and no one else!”
Yeah, I’m all for the freedom of speech but not for the freedom of bullshit.
makes me think, fat chance. This guy is so shameless. Ignoring him won’t work. If he has any self respect to start with, he wouldn’t be indulging in such juvenile acts in the first place.
And to all those rational people who detest this guy but tolerate him or even encourage him only because he vomits total crap that suits their purpose (of eventually owning a condo for less), Please Don’t! You will get your condo for less with out you having to enlist the help of arse holes. Keep your ethics and integrity tight. That’s all I am asking of you. The market will take its own natural course and just because a rabid dog keeps barking $125/sf just means nothing – maybe you will feel better hearing it, but it will do jack nothing for your ultimate goal. It will only encourage people of any substance to abandon this site.
I also can feel no sadness for Jorge Perez.
Drew,
“Keep in mind these units were sold to consumers as INVESTMENTS, and buyers were reassured by hot Colombian women sales agents that they’d be able to flip these things like pancakes and continue to turn huge profits. Just another pyramid scheme…the last one left holding the bag gets screwed.”
couldn’t agree more,
Muir, Smart Money© $85 psqf member
Condos R US®
Corus Bankshares, Inc. (Corus) is a bank holding company. Corus through its wholly owned banking subsidiary, Corus Bank, N.A. (the Bank),
.16
16 cents
AJ,
“Yeah, I’m all for the freedom of speech but not for the freedom of bullshit.”
AJ, since you have The Ace beat by a mile, I guess your banning yourself.
He makes more sense than those that complained that there were too many numbers on a post (that was showing the PE of a condo.)
JL/Carbon
I’m pretty sure Jorge doesn’t have any skin in the game, especially with this particular building. The last few years, there was be no reason for him to put up a dime because his lenders, whether the senior or mezz lenders, were more than willing to cover him for all his needs (un-related is right…lehman was one of several lenders to the project). If he was making capital infusions, you would of heard about this in the market (people down here in the industry would definitely be talking about it).
As for Jorgie’s “wealth,” I assume it was based on the value of his real estate holdings. Generally, most developers are asset rich, cash poor. As we all know, the value of Jorgie’s assets these days ain’t much.
Drew
And I have no sympathy for a person that drops several hundred thousand dollars because of a little skin being flashed their way and the HOPE of a purchaser on the back end getting him/her out. Seriously, if you’re taking investment advice from a hot 22 y.o Colombian girl and are influenced by splashy advertisements in Ocean Drive magazine then you deserve what’s coming to you…in spades.
Someone has been impersonating me using the name Christopher.
i live in New Jersey, am recently retired from working in Manhattan for 28 yrs. i bought a place off of Brickell 3 yrs ago not necessarily as an investment but more for what Miami has to offer. a short flight to some of the nicest weather this country has to offer. enough of the intro. but i do want to mention i have many professional acquaintances who are following closely the falling prices of Florida (especially southern Fla.) and are looking to purchase. Granted everyones wealth has taken a pounding the past 2 yrs but these folks are starting to look a bit more seriously recently about weather the time is right.. they are not looking so much at the investment angle but simply they always wanted to experience , on more than a temporary basis, the southern Florida lifestyle including beautiful golf courses( which can be played yr round), yr round warmth, great resturants and some hot night life.. im sure if i know a decent amount of individuals giving more thought about buying down your way…… what do you guys think… thanks Guy
Hope all these people from New Jersey invest better than they spell.
OPEN LETTER TO ALL MCI BLOGGERS
Lucas is not aware about me personally but I plan on purchasing a property here in Miami as a local end user. I use this site to gather information and do not have or know any realtors. I will be using Lucas Lechuga when the time comes for me to pull the trigger as I believe others who visit this site like the nice British lady and her husband and many others who follow Lucas’s blog. I appreciate that he has invested considerable amounts of time energy and money in his pursuit to make a living. Most of us in here respect him and his website to that end. Recently ONE individual in this forum has been disrespectful of Lucas here and is impeding his right to commerce and the ability to feed himself and his family. You are restricting his livelihood in your attempt to make this blog about YOU as many people drift away and leave this site permanently from your selfish acts. I will not insult you here with name calling as that only seems to encourage and excite you. I only plead with and ask you politely to stop and allow Lucas to make an honest living the same as you would expect from him. It is the lowest form of human behavior to do otherwise. Have you no shame? You are driving away HIS potential clients and although I am not an attorney what you are doing here borders on terrorism no less than if you visited his physical office and firebombed it as HIS MCI website is in many respects his office. Its about RESPECT and ask you again to allow him to pursue this without your interference. Thank you.
Kramer,
The problem is, as I described before in my previous post, “Good People” are closing their noses, turning the other way pretending as if nothing happened as they mistakenly think that this guy is doing them a favour by talking the market down. There is nothing farther from the truth. All this trash talk only results in the opposing view walking away in disgust.
Then the potential buyers here can have as much bullshit dished out by Ace, his aliases and cronies and they can hear as much and what ever they want to hear. If not $125 why not $85 as Muir the other alias or $75 as the cockatoo and why not $50, I will tell you it is going to be $50/sf if that is going to give you multiple orgasms. Still not satisfied, why don’t I tell all of you that you are going to get a flat for free! I will beat all these bullshitters by a mile. How is that for a fantasy. OK how about this, soon they will actually give you money to take over these flats. Was that orgasmic enough for you?
Some of you people make me sick. OK you do not vomit toxic trash like these guys but you give them legitimacy by not stopping them when you must or even dare stand up to them. Your watching with silence on the sidelines made people like LaLa, DLJ, DJR etc leave this site in disgust. If not for jcrimes, gables and a couple of others, I would have left this site too. Who actually gives a shit if you guys are going to get the benefit of an opposing view to temper or moderate the rantings of these extremists. That is really not my job.
It has been a few months since the Marina Blue Bulk deal. These fringe elements started opening the champagne and said that $200/sf is now the new rate and the new bottom.
I am perhaps the only one (maybe one another person) who said this bulk deal means absolutely nothing to the man on the street. This deal actually took units away from the market and it will be good for the rest of the owners. Look who is laughing now. Marina Blue prices are as firm as ever. Even firmer than before. Their asking prices have not dropped by one red cent since the bulk deal. And they won’t unless it is a foreclosure.
So you can listen all you want to these rabid canines, they will say exactly what you want to hear, then come Jan 2010 and you will be the ones left scratching your head wondering what the hell happened. So go ahead, keep your silence and shoot yourselves in the foot.
AJ said: “Marina Blue prices are as firm as ever. Even firmer than before. Their asking prices have not dropped by one red cent since the bulk deal. ”
ROTFLMAO
– Seriously, asking prices mean nothing AJ, only some of the actual sales prices matter…except that those simply set the old ceiling. All of the macro factors continue to point down. You can say I am “talking down the market” but seriously, this is a tiny blog and it has zero impact on Miami condo prices. When you have only around a 30% closing rate for say Trump Towers Sunny Isles Beach that is a disaster. I recently saw an early 2007 edition of Ocean Drive and had to laugh at the ads……oh my, now I understand your shallow haughty thinking AJ. Did people REALLY think all those condos in the ads would be built and be successful???? Too funny.
Anybody recall what Marina Blue was going for per sq/ft Pre-Construction
“hey mistakenly think that this guy is doing them a favour by talking the market down.”
Are you f****** insane?!!!
This market is CRASHED. It cannot be talked down.
Walk, WALK 120 Flagler St. this Wed and go to the 9th floor.
Or Thur or Fri.
That’s as far as I read.
You cannot be for real, you must be someone’s alter-ego.
Nobody can be this delusional.
And, am not kidding now either.
Irrespective of how crude, obnoxious or silly any other posters are, you are clearly, and I say this in all seriousness, totally meaningless to any dialog on investments.
Period.
RT,
I may not even like you.
But I do envy you.
I envy your patience.
p.s. After the next leg down, after they slaughter all the bulls stampeding, I’d seriously start considering some inflation hedges RT, my 2 pennies.
After listening to 60 minutes tonight my cash position feels queasy.
Hey AJ. what was the other building you considered before settling on 1800 club? was it Quantum? Did you mention something about 1800 and Quantum having the hottest women?
Condominiums in Miami are awful investments. I’ve been telling people this for years. Why is everybody on this site so upset about that?
Muir
Stop pretending that (to quote you) ” how crude obnoxious or silly OTHER posters are” when we know it is YOU who has been disrespecting Lucas Blog here by coming on with at least 5 other alias’s in here. Please stop for Lucas sake.
Muir
You even mentioned a few weeks back in one of your posts how easy it is to change your ISP address.
If you guys are looking for a hedge against inflation and have a time frame of 2-3 years here is my mutual fund pick.
http://www.google.com/finance?client=ob&q=MUTF:ICENX
Icon Energy
Morningstar rating: 5 stars
Expense ratio: 1.16
NO LOAD
10 year return: 20.10%
5 year return: 9.25%
1 year return: -37%
Basically you are investing in oil which is horrible right now because of strong dollar and weak economy. You get in very low, possibly at or near bottom. In 2 or 3 years when economy is better and inflation is roaring you make a killing.
That is my mutual fund pick of the month.
Muir – I didn’t catch 60 Minutes last night….what are you talking about? I am considering several options for lowering my cash holdings but there seems to be “no rush” other than interest rates really are getting low as my 3.85-5.4% CD’s start maturing this summer (although with deflation added into the nominal yield the real yield is higher and the nice thing is you only have to pay taxes on the nominal yield, not the full real yield). One problem with getting significantly more exposure to stocks is that for many, esp the early baby boomers, they are out of stocks for good….overall, the enthusiasm for owning stocks has waned significantly and many are out for good or won’t come out to play any time soon….can’t blame them. Just think of all the elderly money that won’t be put into stocks…..what is the long term effects of this lesser demand for stocks and for funding companies in the US? I remember reading articles on all the wealth transfer…the largest in history…that will occur as the baby boomers die off, well that has been cut by 1/3 probably and for the non-wealth accumulators they may need more assistance from relatives and government. For now, I’ll keep my 20% exposure to stocks. The probabilities are that this was a suckers rally anyway and even if I missed the “bottom”, so what? It is about wealth preservation first. One of my bigger concerns is how DC will unwind all the tentacles they have put out there.
With regard to condos in the Miami area, sure I’d like to buy one but I am not going to plunk down $500K-$1M without careful consideration no matter how beautiful and busty the remaining Columbian sales women are! I see some major project collapses coming….don’t know how that can be avoided even with the “plan” of the day coming out of DC. For example, if Trump Towers is maybe 30% closed, then the project is dead even if the split up the towers….they look nice and are impressive but sad that they are empty. Right now, renting continues to be where it is at and I plan to sit back and watch things unfold in 2009. I am ready to buy but will pull the trigger when the right deal comes along. Basically, I’ll make condo watching a hobby.
Lastly, I recently met and spoke with someone who does worldwide financing for projects such as very large residential/condo projects. I was told which countries are dead dead dead…such as Spain. The US will do better than Europe since in the US we allow the economy to be dynamic and allow people to fail. Let’s hope DC doesn’t screw that up with all the bailouts.
I also recall reading, ad nauseam, from AJ that the “rich” will step in and buy these luxury condos, especially foreign “rich” people. Where are they AJ? I don’t see them, do you? I would argue it was more the wanna be rich that were recklessly jumping in more than the real rich. What about “the rich will buy in any market” and “it doesn’t matter to them” if they overpay…….that is the stupid mistake of those that aren’t able to accumulate wealth, not the mistake of the wealthy. If anything, making an expensive discretionary purchase can be put off to tomorrow or the next year. Nobody likes buyers regret and no one likes to make a stupid purchase decision….whether they have a lot of money or very little.
I spoke to someone yesterday (a New Yorker none the less) who had toured One Bal Harbor….. to him it didn’t make financial sense for now. And he is rich.
RT said: “I also recall reading, ad nauseam, from AJ that the “rich” will step in and buy these luxury condos, especially foreign “rich” people. Where are they AJ? I don’t see them, do you?”
NO, and neither does BIG GORGE and the RCRS hypesters. They seem to be signaling the “white flag”…………
****************************
http://www.nytimes.com/2009/03/11/realestate/commercial/11miami.html?pagewanted=1&_r=2&ref=businesstarget=
Miami Condo Colossus Is Monument to Excess
By TERRY PRISTIN
Published: March 10, 2009
MIAMI — Icon Brickell, a new condominium complex in downtown Miami, was intended to be Jorge Perez’s answer to the Time Warner Center, the massive mixed-use building developed in Manhattan by his longtime business associate, Stephen M. Ross.
Len Kaufman for The New York Times
Icon Brickell, a $1.25 billion complex in downtown Miami, has three towers, 1,646 condo units, a boutique hotel and a 28,000-square-foot fitness area.
The developer Jorge Perez at Icon Brickell. Sales have been poor.
Mr. Perez, the chairman of the Related Group (an affiliate of Mr. Ross’s New York-based Related Companies) and the undisputed condo king of South Florida, has peppered the waterfront with residential units in recent years, but he has never built anything on the scale of the $1.25 billion Icon Brickell.
At the point where the Miami River meets the Biscayne Bay, it has 1,646 condos, a 28,000-square-foot fitness area and a two-acre pool deck with a 12-foot-high limestone fireplace. The 22-foot-tall sculptured columns, 100 of them, marking the entryway were inspired by the monumental moai statues on Easter Island and cost $15 million.
But instead of representing a triumph for Mr. Perez, 59, Icon Brickell has become a symbol of the excesses of the building boom in downtown Miami. Since 2003, 83 towers with nearly 23,000 condo units have been added to the downtown skyline, from fancy Brickell Avenue through the more modest Biscayne Corridor, causing an oversupply of epic proportions in this city of 400,000 people.
As of Dec. 31, almost 45 percent of the new condos remained unsold, according to Peter Zalewski, the owner of Condo Vultures Realty, who represents investors seeking to buy condos in bulk and rent them out until the market recovers.
Related has had disappointing sales at two other twin-tower condo developments near its new project: the Plaza, with 1,000 units, and 500 Brickell, with 633 units.
But they pale next to the performance of Icon Brickell, where condos were listed at $400,000 to $800,000. “It could very much be that his masterpiece will also be his downfall,” said Jack McCabe, the chief executive of McCabe Research and Consulting in Deerfield, Fla.
Only 30 of the 500 Icon Brickell units that were ready for closing in December have actually closed, Mr. Perez said. Many buyers are trying to get out of their contracts, including 144 represented by Robert H. Cooper, a lawyer in Miami who has a growing practice in such litigation.
The downturn in the market represents a sharp reversal for Mr. Perez, who sold every unit at another new condo building in Miami Beach a few months ago. “The world has changed so rapidly,” he said over lunch at the Viceroy, the lavish 148-room boutique hotel that opened last week in the shortest of Icon Brickell’s three towers, with 50 stories as opposed to 57.
With property values rapidly declining, equity has eroded, and senior lenders are calling the shots. Mr. Perez, who was born in Argentina of Cuban parents, accuses his lenders of hindering sales by not allowing him to sell units at a discount.
“The biggest problem we face today are the lenders,” he said. “It’s surprising to me that the construction lenders — let me put it in the nicest way possible — have not been more cooperative to let us do what we need to do: give the buyers a 10 percent discount. It’s the stupidest thing I’ve ever seen in my life. It’s like they are digging their own grave.”
More than in most cities, Miami’s condo boom was fueled not just by easy access to cheap financing but also by speculation, some of it apparently fraudulent. Some brokers estimate that as many as 80 percent of those who made nonrefundable deposits were investors in multiple units who hoped to flip them. Mr. Perez said he had tried to exercise caution by insisting on personally approving sales of more than two condos to a single buyer. “In retrospect, I should have been a lot firmer,” he said.
At the height of the market, developers saw an opportunity to squeeze more profit out of their sites by adding stories or putting up more than one tower on a site. But they stopped installing flooring or window treatments. “The developers call them designer-ready units,” Mr. Zalewski said. “I call it raw space.”
Ordinarily, Icon Brickell would have been built in phases, Mr. Perez said. But demand seemed rock solid. “We only built when our projects were 90 percent sold,” with deposits of 20 percent, he said. “We had people camping out to buy one of our units.”
Michael Y. Cannon, the executive director of Integra Realty Resources, an appraisal and consulting company in Miami, said the city should have imposed height limitations, like those in Miami Beach, to keep developers from bulking up. “Bigger is not better,” he said. “That’s where the excess overhang occurred. The government didn’t have to let it happen.”
Compounding the problems in the market are new financing guidelines imposed by Fannie Mae, which buys mortgages from banks. Under the new rules, the agency will guarantee mortgages only if no more than 15 percent of the unit owners in a project are delinquent on their homeowner association dues; if 70 percent of the units have been presold to residents rather than investors; and if no single investor owns more than 10 percent of the units.
Robert Kaplan, a principal of Olympian Capital Group, a Miami mortgage brokerage, said the tighter rules would prompt lenders to become more realistic about pricing units to appeal to bulk investors because individual buyers would be virtually shut out of the market. Lenders “are finally seeing that tomorrow won’t be better than today,” Mr. Kaplan said.
In addition to bulk purchases, brokers say they expect more auctions and seller-provided financing. Owners of multitower complexes like Icon Brickell may try to isolate renters in one building to avoid an unhappy mix of buyers and renters.
“We’re looking at all the possibilities,” Mr. Perez said, although he frowned at the mention of auctions. Last year, in one of the rare bulk sales in Miami, Mr. Perez raised eyebrows by being both seller and buyer; he and a partner bought 120 units at Related’s 54-story tower at 50 Biscayne Boulevard at the discounted price of $30.3 million. “Today, I could have bought them for 20 percent less,” Mr. Perez said.
In December, Mr. Zalewski brokered the sale of 60 condo units at another Biscayne Boulevard tower for $200 a square foot, about half the preconstruction price. Bulk buyers are seeking low prices because they expect maintenance costs to rise, and they do not know how deep the rental market is or how long they will have to hold their units, said Rebecca Gheiler, who has an investment fund backed by Israelis and Latin Americans.
Although the condo glut is clearly bad for building values, some brokers and civic leaders contend that it is likely to benefit Miami in the long run. Alyce Robertson, the executive director of the Miami Downtown Development Authority, a quasi-independent city agency, said $13 billion in private money has been invested to transform a once-decrepit area. “The way the city has to grow is up,” she said. “The infrastructure in place is going to be what we needed for our future.” Since 2000, the residential population downtown has grown to an estimated 31,000 from 20,000, she said.
While acknowledging that “greed was one of the reasons for the collapse” of the condo market, Mr. Perez said he was motivated by more than profit. “As developers, we were driven by legacy,” he said. “People ask me, would I do it again? The answer is yes. We are creating a city.”
***********************************
Big Gorge’s: “As developers, we were driven by legacy” may be the most disingenuous statements he has mumbled to date.
I named that concrete jungle (ICON) “Stalingrad” for a reason. It was the beginning of the end for Hitler. Judged on Big Gorge’s comment, ICON may be “the end of the end”! We will know for sure when the RCRS hucksters start swan-diving of the roofs of that “legacy”!
RT
“With regard to condos in the Miami area, sure I’d like to buy one but I am not going to plunk down $500K-$1M without careful consideration no matter how beautiful and busty the remaining Columbian sales women are!”
Discipline is important in investments. 🙂
Re: cash.
I was more thinking in terms of Christopher’s post.
Though not exactly.
re:hobby
sure.
For 120 West Flagler may make your hobby even more interesting.
Just watched the 60 Minutes interview of the Chairman. Clearly, the concern of the Chairman is that he needs the country to have the “political will” to back his current…and more importantly future endeavors if needed. Why else would he do an about face regarding interviews and chose 60 Minutes? Remember, he could choose any media outlet for such an interview. Most importantly is why the Fed is backing the big banks so people don’t get upset with the bailouts and more to come for sure.
One thing to note, as I have previously posted, this was a credit bubble that burst and a shift downward in the demand curve (demand destruction with supply still at the old demand level resulting in dual problems of slack in all areas of the economy and longer-term structural supply changes). Unfortunately, the Fed can do little to re-inflate this bubble and it MUST create at least a minimal inflation rate to avert a real depression. However, at this point, inflation is not a fear since the Fed can’t re-inflate the credit bubble which would be needed EACH and every year….remember, when banks were lending 30+ to every $1 in deposits and debts could be securitized that was a lot of “money” floating around….that is gone. No trust in securitized debt and of course the uncertainty of the principal repayment of such debts as defaults rise. What about European banks at 60 to $1??? The bubble is too big to re-inflate. The demand destruction is too large. This is at best a 3 year banking crisis and a 6 year structural supply change. The country will get through it if was can avert large deflation.
As it stands right now, Miami condos face very real and significant delation as an asset class coupled with large (and rising…property taxes will need to go up to cover govt spending) holding costs and low (and falling) rents.
RT, Just stop!
When your buddy gets exposed, you just want to legitimize him by addressing a “serious” looking post to him. No amount of back slapping between the two of you is going to cover up the fact that you guys cover up for each other.
And please do not venture into territories you don’t know. You probably don’t even know how to get to Marina Blue from Sunny Isles leave alone commenting on it. So keep your credibility if any left and do not talk about things you don’t know.
AJ said: “…. do not talk about things you don’t know.”
– You looking in the mirror ole buddy??? Seriously, your condo cheerleading and headline blurbs make no sense and you mistake being informed with having toured a condos amenities and are shallow like an Ocean Drive mag. You read waaaaaaay too much into things and always think there is some sort of conspiracy. Go back on the meds and get to counseling about that MMPI personality disorder you obviously have.
RT,
re: #295
Hope your right.
I mean that.
Muir – I don’t think the “end is in sight” rather I think the hope is that the end will be in sight and that the major major major calamity has been avoided. People, businesses, countries will position themselves going forward to not let this happen to them again. Same goes with condo buyers….. the feeling of being trapped and helpless is distressing. To date things have been relatively orderly and surprising that some people/developers are holding onto wishing prices…..but there have been several posts that have explained at least in part the debt tap developers and the lenders are in.
should read “debt trap”
The debt trap explains a lot…..I was wondering if most of the people doing the selling (developers and private individuals) were on some serious drugs and had completely checked out of reality in terms of their asking prices. I guess they’re really just puppets being controlled by the lenders and woulnd’t be able to lower their prices even if they wanted to. Still though, I guess that means that they’re handing out viles of crack at these banks instead of bonus checks, because if the lenders have any say over the matter, their heads still seem to be in the clouds for the most part.
Let us see if you have same thing to say in a few months from now.
Americans are hopeful. Hope and optimism is what drives capitalist society. When that hope does not exist, America ceases to exist.
When Ben Bernanke says recession ends this year and recovery begins next year, people are listening. It is very easy to hold off a year to see where we are headed.
Why should anyone offer you deep discounts when a majority of experts and the ordinary citizens are saying this R thing is winding down in the next few months? Just because there are a few of you who want to buy a flat for pennies on the dollar, should the owners and the lenders start taking another 25% off their asking prices?
I said this before and I will say it again, anyone who can hold off for the next year or two will not reduce his asking price by a dime, as the asking prices are already off by 30-40% off their 06 peaks. Unless the guy is in foreclosure don’t expect any reduction in prices.
OK, if this R goes into a deep depression, or if recovery does not start by the beginning of the next year then all bets are off. Then you will start seeing deep cuts in prices only due to a large number of foreclosures. But that is not likely. The recession started in Dec07 is slated to last until June 09. Even if it drags till Dec 09, it is still OK.
So do not hold your breath for any reduction in asking prices. The owners are not blinking. The buyers are not budging. There is a stalemate here.
If some kind of good news starts trickling down by June 09, then the holding out owners will win. If by Dec 09 the R is not declared over, then the holding out buyers win. It is entirely upto you what you want to believe. But don’t expect any drop in asking prices anytime soon. You will only be frustrated.
To put in perspective, why would a owner investor take off another $50,000 off the price when he can hold on to the unit for a mere $25-30K for 1 year? They are not expecting that the prices are going to go up but at least they will get their asking prices when millions of buyers in the US who are on the sidelines jump back into the market when the bottom is declared or when the recovery begins.
Meanwhile the owners can either rent to defray the holding costs or just enjoy their flat in the next one year. There is absolutely no incentive to reduce prices at all.
AJ said: “They are not expecting that the prices are going to go up but at least they will get their asking prices when millions of buyers in the US who are on the sidelines jump back into the market when the bottom is declared or when the recovery begins.”
PLEASE, FOR YOUR OWN SAKE, PUT THE CRACK PIPE DOWN!!
AJ,
just because prices are down 40% from the peak does not mean they cannot fall further. assets will fall to the price the market demands. in equities, i owned bank of america at $50. it fell 50% to $25, and the thought was, cant fall anymore, so hang on for the rebound. next thing you now it is at $5. is it worth more? its intrinsic value says yes, but nobody is willing to buy at a higher price. will it return to $25? probably. $50? not in the near term. same with condos? what is your time horizon, and how long can you afford to hold onto a debt with more than the asset?
prices from the good old days are gone. prices must revert back to affordability. and unless you get an influx of doctors and financiers, the demand will come from the under $100k a year crowd. and these folks will be buying condos for under $250k whether current homeowners like it or not. either sell, or rent for $2000 a month-still cheaper than owning the property. this stalemate will go on for quite some time, years i am afraid. and as long as unemployment continues to rise, i do not see any recovery for the RE market.
Renter Tom (#295). Some great points. I agree with the demand destruction that has occured and will probably not return to same levels as 05 (for housing) and 07 (for credit) anytime soon. Given the high levels of money that is being printed by the Fed, long term interest rates will be higher and access to credit will be lower for most americans. The long term standard of living will be lower (on average).
The days of a family owning 3-4 cars, a boat, an RV, etc are over. Retirees are back working because their savings have been wiped out. They are definately not moving to sunny FL to enjoy the later years of their lives.
I am a home owner in Miami…so I want prices to bottom and start going up. But I dont see it happening anytime soon. People on this blog (and at my work place) were using the Bernake interveiw on 60 Min and saying that recession is going to be over soon and money will start flowing and good times will return. Bernake gave himself sooooo much wiggle room in his predictions….recession is not over…it is going to get worse. More banks will fail. Mortgages will be harder to get. The qualified pool of buyers of condos/houses will get smaller.
One of the scary scenarious I saw on a financial blog was that prices will continue to decline for the next 5-10 year for housing (adjusted for inflation). so houses will become like cars i.e a depreciating asset.
“One of the scary scenarious I saw on a financial blog was that prices will continue to decline for the next 5-10 year for housing (adjusted for inflation). so houses will become like cars i.e a depreciating asset.”
Houses are a depreciating asset!
Always have been.
Robert Schiller has done extensive studies of US housing prices going back a 100 years.
Just pull comps in ANY area of FL and look at the price of a house in 1970 and then look at the price in 1988 or even 1990. It will be very close or the house sold for MORE in 1970.
I’ve done this countless times.
People just do not understand that the change from the one time exception after 65 to “live in the house 2 years in 5” really was the first foundation to this bubble (laws were changed in 1997 IIRC)
In nominal terms you will continue to see price declines for at least 2 years. In inflation-adjusted dollars you will never see in your lifetime 2005-2007 prices.
Prices should be going down at least until 2014 and will return to the Historical norm of under 3% appreciation at some point.
To me it is amazing how many people do not know the fundamentals.
AJ – Surely you jest. Bernanke is HOPING the recession ends later this year. HOPING. He has to be optimistic. It won’t but it sure would make his life and legacy a lot easy. I give him credit for averting major panic and now we can have an orderly winding down of these mega-“banks”. Basically, the too big to fail sized institutions was a mistake….these things are too intertwined in overlapping regulatory areas that it would be chaos. Banks shouldn’t be involved in other “financial products” such as insurance, stocks, etc. Time for banks to be banks and it will allow them to fail. You are nuts AJ if you think housing will stabilize in 2009 in this area….the core price support for housing is employment… preferably with good and growing wages. Unemployment probably will hit 10% this year….a 25% increase in unemployment from today. Moreover, wage pressures and no raises and no bonuses will hurt. You seem to have some off perception ….maybe being a DJ and living behind the velvet ropes warped your senses that 98% of the population is not envious nor desirous of such material excesses just to “be seen”. You must have not been part of the “in crowd” or something in high school. Sad.
carbonblackcab – I phrase it the “debtor lifestyle” is over in America and elsewhere if it existed elsewhere. This nonsense of easy individual credit that was fueled by securitized debt instruments is burnt out. No one is going to buy such “bonds” and be left holding the bag. Credit card limits and accounts will be cut $2 Trillion this year according to Meredith Whitney (whom I respect in this field). Moreover, Mortgage Equity Withdrawals (such as HELOCs for many purposes except a reasonable remodel) are dead. Easy car loans, mostly dead. You need a good credit score and down payment. The borrower needs to have skin in the game too. Think of all the people in all economic classes that lived beyond their means in the “debtor lifestyle”. For them, going forward, Howard Davidowitz’s comments are retail sales are absolutely entertaining while being informative….the guy is as fun to listen to as Roubini….they are opposites in style as Davidowitz is almost manic in telling the facts while Roubini is robotic matter of fact. Americans enjoyed a 3 decade long expanding credit bubble that has shrunk at an incredible pace. Business credit took a big hit too….but it is individual credit that is being slammed the most. Anyone living beyond their means in all economic classes will be hurt badly….and overall the middle, lower middle, and lower economic classes will suffer the most. The lower middle and lower economic classes got bathed in easy individual credit for the first time in history over the last decade…..and now the spigot is being turned off to them. Life is tough enough, but to get in then being shut out is hard….for many I suppose they had nothing to lose per se, but dreams will be dashed and that is truly priceless since the American Dream needs to flourish in every economic class. I do think the fed can’t create enough money to fill the credit void……think of the amount of money needed to replace bank lending from 32 to 1 to say 16 to 1…..or Euro banks from 60 to 1 to 20 to 1???? Everyone is saying the velocity of money needs to increase and scratch their heads why it isn’t…..simple, the deleveraging is outpacing govt action and govt shouldn’t have a goal to fill that void anyway. Just my two cents.
gables,
yes, this stalemate will drag on for a while. Basically this is what I am saying. Don’t expect any major price breaks in the next few months. Everyone is waiting and watching to see who blinks first.
If we do not start recovering by late 2009, then the R will officially become a D. At that point I really don’t give a shit for housing values. At that time I would be praying for a continuation of livelihood, safety of the life and limb and not how much a Miami condo will be worth.
So in the greater interest of the humanity and human race, let us hope this hurricane blows over. It is not good for either renters or owners that this recession prolongs any further. I hope no one is stupid enough in this blog praying for a decimation of the economy so that they can buy a flat for cheap. That would be the most twisted mind.
AJ said: “gables, yes, this stalemate will drag on for a while. Basically this is what I am saying. Don’t expect any major price breaks in the next few months. Everyone is waiting and watching to see who blinks first.”
– Meanwhile, Lucas starts a new thread about the developer price drops. Too funny. A little slow there AJ. Also meanwhile from Reuters, “U.S. credit card defaults rose in February to their highest level in at least 20 years”.
– No one is praying for a depression…..AJ, you are …well won’t post what. So the recession goes though 2010….as long as it is orderly, not the end of the world unless you consider $25 fruity cocktails on Ocean Drive a necessity of life.
AJ,
the stalemate will go on for a while longer, but ultimately it will be the buyer who wins. that individual has all of the advantages, and will maintain those for the foreseeable future. the buyer has cash, sitting in a savings account at worst making 2% a year. capital is insured, and the real rate of return is much higher because deflation is continuing to occur-at least on the large asset classes of stock and RE which the cash will eventually be put to work in. This cash may be making upwards of 10% a year against the assets it will be invested in.
on the other hand, those trying to sell are faced with a depreciating asset (which makes the buyers equivalent cash position grow) that also costs monthy fees in taxes and HOA, etc. which could easily exceed 4% of the value of the home, yearly. the sellers are in trouble and have no chance of recovery in the next 5 to 10 years. throw in the unemployment concerns and that is the nail in the coffin.
I am not wishing on a depression-i want the economy to recover and do well. it is in all of our best interests. but the only acceptable economy for me is one based on a fair balance of supply and demand. we have distorted the demand curve over the past few years, and the return to normalcy will be hard on many people. but it must occur for the economy to function properly in the future. otherwise the long term prospects are dim. in laymens terms, housing prices will reach their correct level when the average joe can buy a house and not have excessive concerns about making payments over a 20 year period. we do not have that right now, nor in the near term.