As many of you already know, the Platinum Condominium auction will be held this Thursday, September 20, 2007 at 7pm. 20 of the developer’s unsold condo units will be auctioned with 8 of them being sold absolute to the highest bidder regardless of price. The auction will be held at the Miami Biscayne Marriott located at 1633 N Bayshore Drive.
Today, I attended the open house at Platinum Condominium to take another look at the building, and specifically the units that will be auctioned. For those of you unaware, the 20 condo units up for auction have been organized into the following three groups. The 8 absolute units are underlined.
Group A
Unit 1602 – 1 bedroom/1.5 bath – 1,042 total square feet – approx. monthly maintenance fee: $357
Unit 1802 – 1 bedroom/1.5 bath – 1,042 total square feet – approx. monthly maintenance fee: $357
Unit 2002 – 1 bedroom/1.5 bath – 1,042 total square feet – approx. monthly maintenance fee: $357
Unit 2102 – 1 bedroom/1.5 bath – 1,042 total square feet – approx. monthly maintenance fee: $357
Unit 1705 – 2 bedroom/2 bath – 1,142 total square feet – approx. monthly maintenance fee: $432
Unit 1905 – 2 bedroom/2 bath – 1,142 total square feet – approx. monthly maintenance fee: $432
Unit 1806 – 1 bedroom/1.5 bath – 988 total square feet – approx. monthly maintenance fee: $357
Unit PH-2206 – 1 bedroom/1.5 bath – 988 total square feet (11-foot ceilings) – approx. monthly maintenance fee: $357
The auction house may or may not start the auction with Group A. They may take a vote to see which group participants in the auction would like to see auctioned first. Once the first group is selected, bidding will begin and the highest bidder will select his/her preferred unit from within that group. If the unit is not an absolute unit then the developer will have an opportunity to decide whether or not he would like accept that bid. If the developer declines the offer, then the bidder can select a different unit from within that group or sit down and select nothing. If the developer accepts the offer, then the unit is scratched from the list and bidding will start again. The process will be repeated until all units within that group have either been auctioned or the bidding fails to reach an acceptable price by the developer for the remaining units.
Group B, in my opinion, has the best units and should be auctioned at the highest prices. Many would think that Group C would be auctioned highest because it has the only 3 bedroom units available. The views from these 3 bedroom units though are horrible. However, Group C has Loft 103 which is my favorite unit in the entire building. It is truly an amazing loft with its 27-foot ceilings. It doesn’t have much of a view but who cares. The auction participants who haven’t toured this unit will likely hold very little value in it because it is only a one bedroom. It’s a great sleeper pick.
Loft 107, in Group A, pales in comparison to Loft 103. It has 17-foot ceilings and the layout is just decent. There’s a reason why it’s an absolute unit. I definitely prefer the 02 line over the 06 line in Group A but Penthouse 2206 was nice because of the additional 2 feet in ceiling height. The 2 bedroom/2 baths in Group A should go highest, followed by the 02 line units and finally the 06 line units. Loft 107 likely will go somewhere in the middle.
There’s definitely a big difference in the 01 line and 07 line condos found in Group B. Not only does the 01 line have much better views but the layout is much better as well. The living room space in the 07 line was lacking to say the least. It was more like one big kitchen/dining room.
Every unit in the building comes with only one parking space. Each additional parking space will cost you $20,000. There is also an option to buy a storage space that is 23 feet x 38 feet for $5,000.
If you intend to bid at the auction, you will need to present a cashier’s check or certified funds in the amount of $10,000 made payable to Pardo & Gainsburg, LLP Trust on the day of the auction. All winning bids will be required to pay the balance of 10% of the total contract price on the day of the auction in the form of a personal or business check. A buyer’s premium of 10% will be added to the final bid price and included in the total contract price. Make sure you take the buyer’s premium into account when bidding. The balance of the purchase price is due at closing on or before Monday, October 22, 2007.
Additional Information
Pet Policy: Two pets allowed, not to weigh in excess of 50 pounds each
Rental Policy: Minimum of 6 months
Maintenance Fee Includes: Building insurance, water, sewer, garbage, 24-hour manned security, basic cable TV and use of the common areas and amenities
Contact me if you’d like me to register you or if you have any questions regarding the auction. I will be attending the auction and look forward to seeing many of you there. Good luck!
Highly Motivated Seller of Two Latitude on the River 2 bedroom/2.5 Bath Condos – $395,000!!!
The owner of two condos at Latitude on the River contacted me earlier this week. He is highly motivated to sell both of his 2 bedroom/2.5 bath condos and is willing to consider all reasonable offers. He has already closed on both of these B12 units and is willing to accept a loss on each of them.
One of the condos is located on the 17th floor while the other is located on the 20th floor. He went into contract on both of these units in Summer of 2005 but paid the original prices that were offered when sales were initially launched. The contract price on the condo located on the 17th floor was $455,000 while the one on the 20th floor was $461,000. His closing costs were approximately $10,000 for each unit. The slideshow below will show some pictures that I took of the unit on the 17th floor.
The unit on the 17th floor is listed at $459,000 which currently offers the best price per square foot of all 2 bedroom condos at Latitude on the River. There’s a two bedroom listed on the MLS for less but the square footage is inaccurate. The listing agent of that unit decided to include the terrace space as well. The interior space of that condo is actually only 1,179 square feet.
The amenities at Latitude on the River are highly impressive and is a huge selling point for this building. It has some of the best amenities that I’ve seen of the newer condo developments. At this price point, I haven’t seen any that match the quality of amenities that can be found at Latitude on the River. The lobby, landscaping and water features of the building are quite impressive as well.
2-story state-of-the-art fitness center and yoga room
4 high-speed elevators
If you’re in the market to buy a 2 bedroom/2.5 bath at Latitude on the River then this is your chance to score a great deal. Contact me today if you’d like to submit an offer on one or both of these condos.
Both of the units come decorator-ready with concrete floors. The following slideshow will show you a few pictures of a fully decorated unit so you can see what one of these can look like.
Update: This condo closed on December 27, 2008 for $546,000.
Corus Bank – One of the Many Publicly Owned Real Estate-Related Companies to See Trouble Ahead
In previous posts, I’ve revealed that Corus Bank is a prominent lender to condo developers in Miami Miami Beach. A recently published article by TheStreet.com entitled “Corus Swept Up in Florida Condo Undertow” may reveal that my analysis of Corus Bank was actually conservative. The article revealed that, for good reason, “55 percent of the stock’s float is being sold short, meaning that investors are betting on a decline in the stock’s value”.
Since August 4, 2007, when I mentioned Corus Bank (NASDAQ: CORS) in one of my posts, the stock has lost a little over 22 percent of its value. I am definitely not saying that I had anything to do with that. Much of the loss was due to two articles about Corus Bank that were written by TheStreet.com towards the end of August. People have begun to see that Corus Bank has troubled times ahead if condo developers in Miami and Miami Beach have difficulty closing on their units.
Recently, Corus Bank paid its shareholders a cash dividend of 25 cents per share. At first glance, this news may sound promising for Corus Bank since it shows that they have extra cash on-hand. However, my sources tell me otherwise. Joseph Glickman, Chairman of Corus Bank, and his family control about 50 percent of the company. The cash dividend may be a way of getting cash out of the company.
If Mr. Glickman and his family had confidence in the company’s future and felt that the stock was undervalued then they would instead use the company cash to buy back its own stock. The family would then control a larger stake in the company. Earlier this year, the board authorized a share repurchase program but they have yet to repurchase one share of stock.
My source has disclosed to me the following: “Years ago Corus used to include in their 10-K Annual Report an analysis of their loan losses should a serious real estate recession occur. 2004 was the last time they performed the analysis (by the way, interesting to note is that they stopped providing this disclosure to shareholders). You can find the one from 2004 here. Just go to page 70 of the Annual Report for the “Commercial Real Estate Risk” section. Back then they were estimating that they would incur $143M in loan losses from their $5.3B loan portfolio should such a serious real estate recession occur. Well, fast forward three years and their loan balance has grown to $8B for the most recent quarter (6/30/07). Applying the same ratio from the 2004 analysis, I estimate that their loan losses could exceed $200M today. That’s more than a quarter of their book value. Now of course this is all hypothetical. Corus did not disclose how they were arriving at those numbers, or how they were defining a ‘serious real estate recession’. It’s garbage-in garbage-out as they say, but at least the analysis they used to perform gives you some numbers you can work with. I honestly think it could be worse though.”
It will be interesting to see in the following 12-24 months where shares of Corus Bank will be given the large amount of money that they loaned to Miami and Miami Beach developers. The following is a list of the Miami and Miami Beach condo developments that they loaned money to, as well as the amount of each loan:
Emerald at Brickell 3 Bedroom/4.5 Bathroom Penthouse Looks Like a Steal
This past week I came across a 3 bedroom/4.5 bath Penthouse condo at Emerald at Brickell that is priced at $975,000. I had to do a double-take when I saw the listing because I know that the 2 bedroom residences at Emerald at Brickell are listed in the $900K’s to as high as $1.45M. The listing shows this 3 bedroom/4.5 bath condo as having 2,847 square feet of living space.
I believe there are only 4 Penthouse units at Emerald at Brickell. Currently, this is the only Penthouse condo that is available on the market at Emerald at Brickell. The Penthouse units have a spiral staircase which lead to the rooftop pool and fitness center. The views from the pool deck are the best that I have seen from the pool deck of a condo building in Miami. (Unfortunately, the picture below shows only a bit of how great the views are from the rooftop).
Penthouse condos are supposed to sell towards the high end of a building’s average price per square foot. The August Brickell Condo Index revealed that condos at Emerald at Brickell had an average list price of $535.01 per square foot while condos sold over the previous six months had an average price of $474.85. This 3 bedroom/4.5 bath condo at Emerald at Brickell is listed at $342.47 per square foot. This seems like a steal to me.
I haven’t been able to get a hold of the listing agent, however. The only contact number that accompanies the listing is that of his office. I’ve called and they have told me that he is out of the country and are not sure when he will return. The price may be a misprint but if it it is not, then I assure you that this is a fantastic deal.
A 3 bedroom/3.5 bath Penthouse sold for $1.25M in October of 2006. That unit has 3,098 square feet. That amounts to $403.49 per square foot. With the views that the penthouse units offer at Emerald at Brickell, I think anything under $1M is a bargain. This is an east-facing penthouse condo by the way.
Villa Regina – 3 Bedroom/2 Bath – Motivated to Sell Now!!!
A few days ago, I acquired a great listing for a 3 bedroom/2 bath condo with direct bay views from the 19th floor at Villa Regina. I normally don’t discuss my listings on this blog. However, due to the motivation of the seller, I decided that this could be a good opportunity for a buyer looking to buy a beautiful condo at Villa Regina at a great price.
The owners of the condo recently accepted a job offer in another state and need to sell right away. It would make their lives much easier knowing that their Miami residence is sold so they can concentrate on their new move. They are planning to relocate within 60 days.
The listing agreement was signed on Monday and I input it into the MLS later that night. We listed it for $685,000. At $685,000, the condo is well priced, given the competition in the building and the fact that the owner is willing to pay two years worth of monthly maintenance fees. This amounts to a savings of $27,134.40 over the following 24 months after closing. The next best priced condo in this line is priced at $699,000 and is located 11 floors below the condo that I have listed. That unit did not convert its space to three bedrooms, nor does it offer any type of buyer incentive.
Okay, okay…so a $14,000 ($41,134.40 with the two years worth of monthly maintenance fees paid) difference in price doesn’t make for an outstanding deal. How would it sound though if a buyer could acquire this property for $600,000 even? Sound more enticing? The owners are so motivated to have their condo under contract within the next 30 days that they are willing to accept an offer that would net them $600,000 before, not after, commissions.
This newly listed condo at Villa Regina has 1,895 square feet of interior space and two large balconies. It was formerly a 2 bedroom/2 bath but was converted by the current owners to a 3 bedroom soon after they purchased the condo in 2002. It is the only currently listed condo at Villa Regina to be converted into a 3 bedroom. I’ve seen a lot of condos at Villa Regina and this one is a fantastic buy. The condo has hard wood floors throughout all living areas except both bathrooms and the master bedroom. Both bathrooms have marble flooring while the master bedroom has Berber carpet. The condo also have a dry bar with wine cooler, upgraded kitchen cabinetry and appliances, upgraded washer/dryer and upgraded master bath and second bath. The furniture that currently resides in the condo is negotiable.
I received a phone call from a local Realtor Tuesday evening to find out if she could show the condo Wednesday at 5pm. She doesn’t know that my client is motivated to the point to accept a $600,000 offer. The fact that I received a showing appointment within 24 hours of it being listed at $685,000 goes to show me that the condo is well priced. At $600,00, it is priced phenomenally.
My clients hope to have their condo under contract within the next 30 days. For that peace of mind, they are willing to accept a much lower price. They realize that an executed contract normally takes 30-60 days to close so they are only willing accept a $600,000 offer if it is presented within the next 30 days.
Villa Regina recently had a special assessment to modernize its lobby, hallways, marina, fitness center, club room and landscaping. The special assessment has been paid in full by the current owner.
I am encouraging all buyers who have an interest in purchasing a 3 bedroom on Brickell Avenue to take a look at this condo. I dare you to find a better 3 bedroom condo in a building that resides on Brickell Avenue for $600,000 or less. I constantly search the MLS for great deals and I just don’t think you’ll find a better deal. Contact me if you would like to take a look at this condo in person.
Neo Vertika 2 Bedroom + Den on the 29th Floor – $303,000
Two Mondays ago I reported that a 2 bedroom + den loft at Neo Vertika went up for auction. The auction had a dismal turnout and the highest bid was quickly rejected by the bank.
Since that time I have submitted two offers to the bank. The bank has recently stated that they would accept an offer of $303,000 if the closing can happen by September 20, 2007. They want absolutely no contingencies, such as financing or inspections. The unit has never been lived in and comes “decorator-ready”.
The loft faces south and has views of the bay and overlooks the swimming pool. The unit is on the 29th and 30th floors and has 1,255 square feet of interior space as well as a large balcony off the main floor. It has 20-foot ceilings and comes with the upgraded stainless-steel appliance package.
The lowest that a 2 bedroom at Neo Vertika of this size has sold for in 2007 is $400,000. If you, or anyone you know, would like to make an offer then please contact me. A pre-approval letter must accompany the offer.
Governmental Intervention in the Housing Market
Yesterday, President Bush discussed his plan to aid homeowners at risk of losing their homes. Most of the plan focused on assisting borrowers to refinance their adjustable-rate loans to more conventional loans provided by the Federal Housing Authority.
I took a look at his recommendations and of particular interest to me was his proposal to temporarily suspend the tax liability that is owed by homeowners when performing a short-sale. As of now, the IRS has the right to tax the loan amount that is forgiven by the lender. It is considered a forgiveness of debt.
Short-sales have become very popular, as of late, because home prices have dropped in recent years and adjustable-rate mortgages have begun to reset. It has become more common for the value of a home to be less than what is owed to the bank. For example, let’s say that you purchased a 2 bedroom condo in 2005 for $500,000 and financed 90 percent of the purchase price. Two years later the value of your home has dropped and you have fallen two months behind on your payments. In the past, when homeowners were in this situation they would tap into the equity on their home by refinancing to take cash out. This is no longer an option, however, to most, because home prices have fallen. Oftentimes, two possibilities exist: lose your home through foreclosure or sell your home through a short-sale.
In the example above, let’s say that the price of your 2 bedroom condo has fallen to $400,000. You owe the bank roughly $450,000. You’ve talked to some knowledgeable acquaintances and they’ve advised you to do a short-sale. Basically, a short-sale means that the bank is willing to accept a pay-off amount that is short of what is owed to them. You contact a local real estate agent to list your property and within a few weeks an offer of $380,000 is submitted.
What is important to note is that two parties need to accept the offer: the seller and the bank. The reason why the seller has to sign off on the offer is because the IRS has the right to tax them on the amount of the loan that is forgiven. In this case, a tax on the $70,000 forgiveness of debt will be due the following April.
The bank also has to approve the offer because they are the ones who are accepting the shortfall in the original amount owed. The banks will ask the homeowner to have an appraisal performed at their expense. Banks are not stupid. They realize that the market has declined but they aren’t going to accept just any offer.
Recently, I’ve come across a few short-sales in the MLS that just don’t make any sense. For example, there’s a 2 bedroom/2 bath listed for $295,000 at Vue at Brickell. There’s also a 1 bedroom/1 bath listed for $217,000 at The Club at Brickell Bay. I’ve written about both buildings in the past and how prices in each building are inflated due to the mortgage fraud that has occurred. However, these prices are a step in the wrong direction and are unjustified. The 2 bedroom at Vue at Brickell is the best priced unit in the entire building, including the 1 bedroom units. The 1 bedroom condo at The Club at Brickell Bay is better priced than even the studios.
Listings like these are a waste of time for everyone involved in the transaction: the seller, the buyer, the bank and the two real estate agents. Just because it is a short-sale doesn’t mean that you can list a property at a price that will get you an offer within a week. As of right now, it is also doing a great disservice to the seller who will have a large tax bill come next April should the offer get accepted by the lender.
As I mentioned earlier, however, President Bush has proposed to temporarily suspend the tax that is owed to the IRS on the amount that is forgiven when a distressed homeowner performs a short-sale. If this becomes a reality it will alleviate a lot of problems for distressed property owners. Short-sales will become more common.
It wouldn’t surprise me, however, if we start seeing mortgage fraud occur in reverse. Appraisals will start coming in very low to justify the offers that are submitted to the banks. It’ll be a nightmare for banks. Accredited local appraisers need to be in place for these banks to be able to cleanly wash themselves from the mortgage mess at hand.
My Prediction for Ten Museum Park
I’m going to go out on a limb and say that the east-facing units at Ten Museum Park will be selling 10-15 percent above where they are now by year’s end. I know, I know…the Miami condo market is in a rut. But that’s just my point. The east-facing units at Ten Museum Park are not condo units. They are lofts with 20-foot ceilings. Of all the high-rise developments in Miami, both existing and under construction, only Ten Museum Park can rightfully call themselves an ultra-luxury loft building.
Of the 200 units at Ten Museum Park, 73 of them have 20-foot ceilings with floor-to-ceiling windows. You will see that in future months there will be a premium paid for these units versus other units, not only in this building, but other buildings throughout Miami as well. I’ve already seen a lot of demand for these units in the past two months as some have been discounted due to original buyers not wanting to close. I think by the end of October the discounted units at Ten Museum Park will be nonexistent. The discounted loft units will be long gone by the end of September.
The amount of demand for units at Ten Museum Park has surprised even me, a big advocate of the development. The loft units at Ten Museum Park are truly something unique for Miami. They offer loft living combined with true luxury and gorgeous unobstructed water views, all residing in a neighborhood that, in my opinion, will be the best in Miami within the next five years.
Parc Lofts is a loft building in its truest form, but it is an industrial loft with minimal water views from higher floors, and offers no luxury. I’m a huge fan of that development as well though because it offers something very unique to the Miami market. Star Lofts, which will begin closings shortly, offers lots of luxury but resides in a neighborhood that does not even come close to the neighborhood of Park West. The prices are much higher as well. I think we’ll see a large percentage of defaulted units there. Infinity at Brickell isn’t quite as luxurious, nor does it have the unobstructed water views that the east-facing lofts at Ten Museum Park can offer, but it is probably the closest loft development to Ten Museum Park that offers the kwan: views, luxury, neighborhood and best investment dollars too.
Much of the luxury at Ten Museum Park lies in what it has to offer above other Miami developments. Primarily, it has the Clinique La Prairie spa which is based in Switzerland. By many, it is considered the best spa in the entire world. People from all over the world have been flying to Switzerland to enjoy the lavish spa treatments for which Clinique La Prairie is well known. Some of those treatments promise to slow down the aging process. The Clinique La Prairie spa at Ten Museum Park will be the first U.S. spa with their name associated.
Secondly, Michael Capponi’s name is associated with Ten Museum Park. For those not local to Miami, the Michael Capponi name is synonymous with the abbreviation V.I.P. He can get you into any party, any restaurant and any event that is well attended. Residents at Ten Museum Park will be able to count on Michael Capponi to get them V.I.P. accommodations to any social gathering that is worth attending.
I think those two aspects alone rise Ten Museum Park to the forefront of all other Miami developments. However, Ten Museum Park is also a boutique building with only 200 total units. Most other developments in Miami have well over 400 total units. There are only 6 units per floor at Ten Museum Park. The east-facing units share one bank with two elevators with one another. The units residing on the west side of the building share a bank with two elevators which accommodates four units. This is another good reason to be on the east side of the building.
Marquis – The Fourth Luxury High-Rise Building in Miami’s Park West Neighborhood
I’ve been getting a lot of interest in Ten Museum Park from both local and out-of-state buyers. Most of them inquire about the developments in the immediate vicinity to Ten Museum Park, such as 900 Biscayne Bay and Marina Blue to the south, and Marquis to the north. One can get a good idea of how beautiful 900 Biscayne Bay and Marina Blue will be when completed by looking at the current progress in development. Marquis, however, probably won’t be finished until the middle of next year and, as can be seen in the picture above, much is left to one’s imagination. (The picture was taken July 7, 2007).
I wanted to share some photos that I took of the Marquis sales center back in 2005 to show people what the building is supposed to look like once it is completed. Marquis is an ultra-luxury building and, if I remember correctly, prices ranged from $700,000 to $15M. It will have 306 ultra-luxury residences on floors 15-67 as well as a 10,000 square foot spa/fitness center and boutique hotel aspect to it with 56 hotel rooms on floors 3-14. The architect behind Marquis Residences is world-renowned Arquitectonica, which also did Marina Blue and a myriad number of luxury condo buildings throughout Miami.
There is definitely a big price difference in units located on the north side of Ten Museum Park versus those residing on the south side. Most of this is due to the close proximity that Marquis lies to Ten Museum Park. I think the spread in prices will narrow once Marquis is completed and buyers see that having a building that will be one of Miami’s most luxurious addresses isn’t such a bad thing.
