Foreclosures, gas, job losses mark 2008

Extreme highs and lows marked a volatile 2008 in local, state and U.S. business.

Whether it was the price of gasoline spiking to $4.11 a gallon, the record number of homes lost to foreclosure and people losing jobs, or the depressed housing market in Manatee County, it was the year of stomach acid in money matters.

Record foreclosures

Foreclosures continued to dominate the local and state housing markets in 2008, with foreclosure petitions surging to record highs.

Lenders filed more than 5,500 such suits in Manatee County Circuit Court in 2008, breaking the previous year's record of 2,620 in less than six months. Roughly one in every 33 Manatee homes fell into foreclosure during the year, giving the Sarasota-Bradenton-Venice metro area one of the nation's highest foreclosure rates.

Manatee was not alone: Florida continued to be a national foreclosure leader in 2008 as more homeowners fell behind on their payments as credit tightened, job losses mounted and housing prices plummeted. By year's end, nearly one in six outstanding mortgages in Florida were either in foreclosure or at least one month delinquent.

The subprime mortgage meltdown that presaged the foreclosure surge gave way to growing numbers of more credit-worthy borrowers defaulting on adjustable-rate mortgages taken out during Florida’s housing boom. Many also quickly went "under water," or owing more than their houses are worth, and unable to avoid foreclosure by selling.

But the foreclosure surge spread well beyond homes and condominiums to swamp homebuilders, condominium developers and commercial projects. Among the local victims were a Palmetto condo tower, a Lipizzan horse ranch in Myakka City, half of a north Manatee subdivision under construction and the site of a proposed Bradenton condo complex.

Congress passed a massive housing-rescue bill during the summer that included the creation of a $300 million foreclosure-prevention program.

Gov. Charlie Crist briefly considered enacting a foreclosure freeze, but instead announced that state lenders had agreed to a voluntary holiday moratorium. It had little effect, as the agreement did not include national lenders, who own the majority of Florida mortgages and file the most foreclosures.

Housing market woes

Turmoil continued to buffet the local housing and mortgage markets in 2008, despite relief efforts by state and federal officials.

Local home sales and prices fell steadily throughout the year, as buyers grew increasingly cautious and held out for better deals. Sellers, many hoping to avoid foreclosure, repeatedly dropped asking prices as distress sales took a greater share of the market.

A growing number of foreclosed homes worsened the market glut. By the end of the year, nearly one in six of Florida's 3.5 million outstanding mortgages were either in foreclosure or at least 30 days behind.

The mortgage meltdown led to the nation's worst financial crisis since the 1930s and deepest recession in at least a quarter-century.

Congress passed a massive housing-rescue bill that included a $300 million foreclosure-prevention program.

It later passed a $700 billion bailout of the financial industry, which was reeling from heavy losses on bad mortgage debt.

Florida officials passed tougher laws aimed at protecting distressed homeowners from foreclosure-rescue scams.

There was a late-year bright spot: Mortgage rates fell dramatically just before Thanksgiving and remained at historic lows the rest of the year, prompting a surge in refinancing activity.

Joblessness doubles

Unemployment in Manatee County reached record highs in 2008. The unemployment rate in Manatee skyrocketed to 8.2 percent in November.

That rate means 12,550 people were jobless in Manatee County last month, out of the estimated 680,000 without jobs statewide.

The unemployment rate is nearly double what it was during the same time period last year.

The unemployment rate was 4.4 percent in November, 2007.

At the start of 2008, Manatee County had a 4.7 percent unemployment rate and ranked 35th out of 67 counties in Florida in terms of joblessness.

Now the county places 19th due to its unemployment rate that ranks about the state average of 7.3 percent.

Retail sales dismal

Not only were holiday sales dismal for retailers in 2008.

The entire year was tough on retailers, many of whom had to close their doors or file for bankruptcy in 2008.

Retail sales have hit some businesses so hard the National Retail Federation on Wednesday was knocking on president-elect Barack Obama’s door to request a series of sales tax-exempt shopping days.

In Manatee County, retailers were hit with a tough year.

Albertsons sold most of their stores in the area to Publix. Mortons Gourmet Market in Lakewood Ranch, closed its doors in March.

Coffee shop Barnie’s in San Marco Plaza closed, and the Starbucks in Desoto Square mall will be one of coffee giant's 600 stores to close.

Despite the recession, the University Parkway area welcomed several major retailers this year: Best Buy, Bed Bath and Beyond, Michael's and the Sports Authority joined the shopping center anchored by SuperTarget, and the area also welcomed Kohl's and The Fresh Market.

Bank failures

The year 2008 saw two local bank failures and promised not to be the end of challenges for Florida banks.

First Priority Bank and Freedom Bank, both based in Bradenton, succumbed to mounting bad loans linked to the housing downturn.

Regulators shut First Priority Bank in August. The bank was struggling under $43 million in non-performing loans and had a mere $1.5 million in operating capital at the time it was shut down.

Freedom Bank was closed on Halloween.

The bank had lost $18 million during the year, and had $35 million in non-performing loans.

Both banks struggled to raise capital to satisfy regulators and continue operations but were unable to do so in a state with plummetting home values and mounting foreclosures - mostly brought on by a combination of subprime loans made to risky borrowers and out-of-state investors artificially driving up prices.

Gas prices up, down

The year closed with some relief at the pump, as gas prices fell to an average $1.63 in Florida.

However, summer gas prices were unbearable for consumers when they reached a record-high.

In July, the national average price of gas reached $4.11 a gallon when the cost of crude oil was at about $150 a barrel.

As if gas prices weren’t bad enough, hurricane season brought on price gouging at the pump.

A Pilot gas station on U.S. Highway 301 in Ellenton received 11 complaint calls in September about its gas prices after Hurricane Ike. The gas station was charging $4.59 a gallon, above the state average of $4.19 at the time.

Meanwhile, rising fuel costs forced Manatee County Area Transit to raise its fares in May. MCAT raised the cash fare for a one-way trip from $1 to $1.25 and started charging 25 cents for transfers that were previously free.

In addition, several local governments — city of Anna Maria, city of Bradenton and Lakewood Ranch Town Hall — cut back to four-day work weeks to help employees save gas money

From the Bradenton Herald – Dec. 28, 2008

IRS helps speed up home sales

Amid harsh economic times, the Internal Revenue Service recently sped up the process to help financially strapped homeowners refinance or sell their homes - even if a federal tax lien is already in place.

The agency said there are options that would still allow the home to be sold, even if a federal tax lien has been filed. For example, the homeowner or their lender may request to have the IRS make the tax lien secondary to the lien by the lending institution that is refinancing or restructuring a loan.

Also, taxpayers or their representatives may request that the IRS discharge its claim if the home is being sold for less than the amount of the mortgage lien under certain circumstances.

While the process to request discharge or reorder a lien takes about 30 days after the paperwork is submitted, the federal agency said it "will work to speed those requests in wake of the economic downturn,”":according to a press release.

“We don't want the IRS to be a barrier to people saving or selling their homes,” said IRS Commissioner Doug Shulman. "We realize these are difficult times for many Americans. We will ensure we have the resources in place to resolve these issues quickly and homeowners can complete their transactions."

The agency advises individuals to contact the Collection Advisory Group if they are in the process of selling or refinancing their home to expedite the process.

"People sometimes delay informing lenders of the tax liens, which only serves to delay the transaction,”"according to the agency.

More than 1 million federal tax liens are outstanding against properties. The IRS issues more than 600,000 federal tax lien notices annually.

December 30, 2008; South Florida Business Journal

Tired of trying to sell your Florida condo?

Real Estate statistics

Henry B. Nathan at United Realty specializes in helping new residents buy South Florida real estate. I try to treat my real estate clients like family in my quest to help them discover the best bargains offered by all Florida real estate agents. By showing my clients all of the fantastic real estate South Florida realtors are offering through the free MLS system on my website I ensure that they get the most valuable MLS information.

While I assist my clients with their Aventura real estate needs, I always try to locate the best Aventura homes and Sunny Isles Condos that will suit their needs. Choosing a Aventura Condo a luxury Sunny Isle real estate means that you need a guide who knows the area and the available inventory in the area. I am experienced in both Dade County real estate and Broward County real estate. I am strategically located to assist with Hallandale real estate and even Hollywood homes for sale.

Although I specialize in Hallandale Florida real estate, I can assist my clients with any and all of their needs in the South Florida area. Prices are getting better all the time for Miami real estate and I intend to help on my clients make the most of the present buyers' market. I search all of the real estate Miami Beach has to offer along with Surfside real estate, to find the best deals in foreclosures and short sale properties for my clients. With prices being reduced so quickly, Miami real estate that is either a short sale or foreclosure is very enticing but many times traditional situations can provide just as good an opportunity to purchase real estate in Miami.
Many buyers proceed under the false pretense that real estate in Sunny Isles is best purchased as a short sale but short sale and foreclosure situations have many pitfalls. You are usually far better off to locate a piece of Hollywood Florida real estate in which the owner has some equity and needs to sell but is not in foreclosure. Everything from oceanfront properties in the South Florida area to the new homes in Pembroke Pines, can be acquired in this manner. The best real estate Aventura has to offer is usually not going to be foreclosure property but motivated sellers with homes for sale in Aventura and Sunny Isles, that have moved away and need to sell. When properties get tied up in foreclosure they are very difficult to get to the closing table.

FORECLOSURES AND SHORT SALES IN SOUTH FLORIDA.

Many of our international and domestic clients are asking about short sale real estate in Aventura and Hallandale area. While it is true that a buyers� market has created a substantial amount of inventory in the form of both short sale properties (properties in which the seller owes more on the mortgage than what the home is selling for) and foreclosures, this does not necessarily mean they are a good buy. While there are many properties that are in this category that are great prospects there are many drawbacks and pitfalls to purchasing properties when they are short sale and foreclosure homes.

The most obvious issue is the condition of the property. By the time the seller who is essentially evicted from their home gets out or has already left the home, these can be sometimes badly neglected. The homes are often deliberately damaged or stripped of anything that might have value in an effort to salvage some of their investment. If the property has not been damaged or neglected then there are often timing issues for the buyers while they wait for the overwhelmed bank to respond to an offer. Often times this process can take weeks or even months. In essence, if you are shopping for a short sale be prepared to be patient. If you are in a hurry or have limited resources most short sales are not going to work for you. They typically require far more effort on the part of all parties involved and can be very cumbersome. In the Sunny Isles area there are many homes that are going through this process right now.
They range from luxury waterfront condos in Sunny Isles, luxury homes in Golden Beach, Waterfront homes in Golden Isles, to affordable condos in Miami. The economic downturn has affected homeowners in all parts of South Florida and at all price levels. If at all possible we always try to recommend that our clients look to purchase homes that are not short sells but great values in good condition and locations where there are adequately motivated sellers. These are usually the best prospects for finding a great new home at a great value South Florida. If you think you might be a candidate for purchasing a short sale property or a foreclosure please let me know. I have a good experience in both selling and buying these types of properties in Aventura and Hallandale, as well as Fort Lauderdale and Hollywood Beach.

United Realty Group has an affiliated entity called

SAVE YOUR HOME CONSULTANTS LLC

Whole Foods pulls out of Met Miami project

Whole Foods has pulled the plug on plans to open a grocery store at the Met Miami project in the city’s downtown, but the developer hopes to fill the vacancy with another supermarket in the future.

Changes in the construction schedule at the mixed-use project – which includes offices, condos and a hotel – figured into the decision, said Russ Benblatt, Whole Foods’ regional marketing director for Florida. “We are out of that project,” Benblatt said. “It was the project changing that precluded us from being there.”

Although thousands of new residents are living in downtown Miami as a result of a wave of condo construction, there are few amenities and there is no major supermarket in the downtown area. There are also plenty of highrise condominiums with lots of unsold units.

Whole Foods, based in Austin, Texas, has an aggressive growth strategy, which likely influenced its decision to get out of Met Miami. The company has opened five stores in Florida since September 2007, including its Coral Gables location.

“From the onset, our vision for Metropolitan Miami was to have a food market as part of Met 3. We respect Whole Foods' decision, and will look to continue an open dialogue with the organization with the goal of a possible relationship in the future," said Tim Weller, vice president for builder MDM Development Group. "That said, our goal continues to be having an agreement in place with a food market when the first phase of Met 3 breaks ground at the end of 2009,” Weller added.

Weller told the Business Journal in September that he planned to start construction on the 14-story Met 3 garage, where Whole Foods was planned, in June. The market was to open in spring 2011, he said. Jeremy Larkin, president of NAI Miami Commercial Real Estate Services Worldwide, said he wasn’t shocked, considering the revenue hit that retail has taken nationally.

Larkin, who is not involved in the project, said downtown Miami had not matured fast enough to accommodate Whole Foods’ revenue model and the project’s changes gave them an out on their contract.

“In order for them to be successful, they need affluent people to spend dollars for premium foods,” Larkin explained. “The narrow margin of people that exist are on the bay and there aren’t enough to support a Whole Foods operation.”

Larkin said every retailer with a deal in progress is renegotiating with their landlord to get a 10 to 20 percent reduction in their rent. If the deal is in an average neighborhood, retailers are killing them. “Virtually no new project is going to work except in mature, healthy, economically viable areas,” Larkin said. Larkin predicted Whole Foods would be in downtown Miami in five to seven years, when the market matured.

Neisen Kasdin, vice chairman of the Miami Downtown Development Authority, said he didn’t know that Whole Foods had decided to go in a different direction. He said it’s a disappointment, but he is confident another market will fill the void to meet the demand created by residents who are already downtown.

Benblatt said Whole Foods was continuing to look for sites in Miami. “We want to be part of Miami,” Benblatt said. “We just want to find a site that fits for us at all angles.”

The real estate downturn had already taken a toll on the project. Met 3 was to feature a 74-story residential tower with 650 units, but that plan is on hold.

MDM has completed Met 1 on the east side of the three-block site. Closings at the 40-story, 447-unit residential tower have been slower than expected, with buyer financing the biggest hurdle to closings.

MDM has begun construction on Met 2, its office and hotel phase that includes a 1,450-space garage. The 750,000-square-foot office building has the law firm Greenberg Traurig as its anchor tenant.

Met 2 also will feature a 358-room hotel with two Marriott hotel brands. Marquis will have 313 rooms, with luxury flag Hotels Beaux Arts serving 45 suites. Construction is expected to be completed by October 2010.

Met Square, the four-story entertainment complex located between Met 1 and Met 2, is slated to start construction in June, with a completion date of October 2010.

South Florida Business Journal; Jan.1, 2009

Condo buildings in Aventura :

Bulk buyer snags 60 units at Marina Blue

A Singer Island-based group has paid nearly $13 million for 60 units at the Marina Blue high-rise across from American Airlines Arena in Miami.

The deal was recorded in separate deed transactions between developer Mist Towers – a subsidiary of Miami-based Hyperion Development – and buyer Welcome Bay on Dec. 24. Joseph Kuharcik, an attorney in Palm Beach County who represented the buyer, declined to comment. Hyperion Development could not be reached immediately for comment.

The developer issued 374 deeds for the 516-unit Marina Blue before making the bulk deal with Welcome Bay, according to court records.

The total price, based on the taxable value paid for each deed, was about $12.9 million. The unit prices ranged from $165,000 to $264,000.

Robert Given, CB Richard Ellis executive VP in the South Florida Multi-Housing Group, estimated that the units sold for about $200 a square foot.

Given, who is not involved in the deal, suggested that senior lenders at projects like Marina Blue would be happy if units sold at $200 a square foot because that price could generate enough cash to pay them off.

“What you are going to find is that premium buildings and premium sites are going to have enough value to satisfy the senior lenders on new construction and additionally pay back some of the mezzanine and investor positions to a degree and those sites in marginal locations are going to be more challenged,” he said.

However, during preconstruction, units at Marina Blue were selling for about $400 a square foot.

The $200-a-square-foot price provides a ceiling for inferior pricing at inferior locations. But equal or better-quality condos may be able to generate a higher per-square-foot price, Given said.

When the 60-unit bulk sale is factored in, the building is about 84 percent sold, which is “very good” in this market, Given said.

Although $200 a square foot is less than what a lot of units in premier buildings sold for, even at preconstruction prices, it gives developers the breathing room to rent units immediately, and sell the units for more down the line, Given added.

“Once they pay off the senior lenders, they can slow down and maximize sales on the remaining units for investors,” he said. “Senior debt creates pressure to liquidate.”

Given also said that it could be an all-cash deal because financing is so hard to come by in the current market.

Many groups are on the prowl for bulk buys in downtown Miami.

The Related Group’s Jorge Perez is responsible for one of the few bulk buys that have been made public. He launched a buying fund that made two deals in the 528-unit 50 Biscayne, which Related Group built in partnership with Atlanta-based Cousins Properties. The bulk deal sold out the project and closed out its loan.

The 50 Biscayne buying fund, Lubert-Adler Partners, paid $6.1 million in May for 26 units –an average of $236,294 a unit – and $30.3 million for 120 units –an average of $252,504 a condo.

Condo Vultures Realty CEO Peter Zalewski, who was featured recently on 60 Minutes and frequently is quoted about his work to facilitate various bulk buys in Miami, was uncharacteristically silent on the Marina Blue deal.

Kevin Tomlinson, an Esslinger Wooten Maxwell broker specializing in condominiums, speculated that Corus Bank, Marina Blue’s lender, might be getting less from the developer. With individual condo buys becoming harder to come by, bulk buys are a lender’s best chance at recovering any of their money.

“The people who own the senior debt – they may be taking a discount,” Tomlinson said, noting that the deal may not be what the banked wanted or what it was owed, but it is better than nothing.

South Florida Business Journal; Jan.5, 2009

Sunny Isles

In Fort Lauderdale

At the Southern end of Miami Beach

Hallandale Beach Condos, and Sunny Isles Condos

Florida Condominiums for Sale

Searching for Florida condominiums for sale? Are you looking for that relaxing, soothing beachside resort or is your preference luxury condominiums near the theme parks and attractions of the central Florida area? Or do you prefer family friendly Florida condominiums for sale that have features that appeal to your kids? Whatever your preference, you will find the accommodations you are looking for. Florida draws new residents and tourists from all over the globe. Florida condominiums for sale are available at beachside or near the beach in cities as Cocoa Beach, Melbourne Beach, Satellite Beach and Indian Harbor. These locations are only 50 minutes from the Orlando, Florida and Kissimmee, Florida attractions area. Have you narrowed your search down to luxury condominiums in the Central Florida area which places you near the hottest attractions such as Walt Disney World, Sea World and Universal, about 2 miles from downtown Orlando luxury condominiums either 2 or 3 bedrooms with a variety of square footage and floor plans. Cane Island is a sprawling planned community that includes very nice Florida condominiums for sale. Architecture is pre 1940’s Orlando, Florida, homes with front porches and narrow streets with sidewalks. Find your dream vacation home in one of the beautiful garden communities, with lots of open spaces with planned amenities which offer family and singles living at its finest. You can find even fully furnished units at a great price.

Florida Condominiums for Sale in the Miami area.

Owning a condominium vacation villa in the Miami Beach area will place you near the famous South Beach area and it world-famous restaurants, bars, discos, Lincoln Road, and Ocean Drive. Luxury condominiums can be found for sale at Millionaire Row, Indian Creek. Great condo buildings can be found at North Bay Village, a 10 minutes drive from the Beach. If you would like to be a little closer to Bal Harbour and its famous Bal Harbour Shoppes, you can find many new, as well as well maintained condo buildings in Bal Harbour at now much affordable prices. Bal Harbour buildings on the beach include some newer building such as the One Bal Harbour condos, or the venerable Balmoral, all marble and space, with some great Bal Harbour apartments with wonderful water views. The New Harbour House condos, which are a condo conversion, are the result of gutting a rental building and converting it to a condominium community. Driving South of Bal Harbour, Surfside is a coveted location, with good walking traffic, restaurants and stores, as well as its Surfside condominium buildings right on the beach, such as the Waverly Condos, the Champlain Towers Condos, three attractive buildings, right on the sand. A new condo building, the Azure Condominiums, can be an alternative. The Wave Condos, the Manatee Condos, the Spiaggia condominium building, which has been completely gutted and redone. Surfside offers a small town setting which also includes some older Surfside single family homes. South of Surfside, Nobe condominiums can be a good alternative. Nobe or North Beach is an area alongside the ocean, with a stretch of restaurants and entertainment places, blending with the Nobe condominium buildings. Luxury Miami Beach condos are an exciting blend of modern and old rehabilitated buildings. The Blue Diamond condos and the Green Diamond condos, the Fountainebleau condos, the Canyon Ranch condominiums, and many other Miami Beach condominium buildings are some of the newer Miami Beach condo developments. Great opportunities are waiting for you since the turn of the market has brought to the market many Miami Beach real estate opportunities, Miami Beach foreclosures and Miami Beach short sales. If you go further South, you will be able to choose between the older, but now affordable condos in South Beach, or if you can afford it, the high-class condo buildings such as the Continuum condominiums, the Apogee condos, the Murano at Portofino condominiums, the Icon South Beach condos, the Setai condos, the Il Villaggio condos. Traditional buildings at the cozy location called Belle Isle are an affordable yet wonderful option. Close to Lincoln Road and South Beach lively environment, you will be right at the center of the action, living in an affordable Belle Isle condo. We can present you with different alternative of foreclosure deals, short sales opportunities but, in general, motivated sellers constitute some of the best South Beach real estate buying opportunities.

Florida Condominiums for Sale as an Investment

Florida is one of the premier retirement areas in the world. With its temperate climate, variety of Atlantic and Gulf shore beaches, and plethora of pleasure activities, no wonder it’s such a desirable piece of real estate to own. Planning your retirement? It’s never too early! Do you see retirement a long ways down the road but want the security of owning a vacation villa in an upscale environment like in the Sunny Isles Florida area near Aventura? Owning your own lodging will give you the security of knowing there is always a place for family vacations awaiting you. Amidst your busy life, think of how hassle-free your next vacation will be. No more booking those reservations months in advance or trying to find just the right lodging at the last minute or around peak holiday season. Hallandale Beach Condos can also be a great refuge, with all these entertainment venues, such as the Gulfstream race track and Casino, the new Village at Gulfstream, the shops at Diplomat Mall, restaurants for all tastes and budgets,the beach and the stunning views on the intracoastal waterway, the proximity to Aventura Mall and Downtown Hollywood.

Renting Your Luxury Condominium in South Florida

Owning your own piece of Bal Harbour, Florida real estate will give you the option of using it for you and your family when you choose or renting it to some of the millions of tourists streaming to Florida. You can choose either to be in charge of the advertising and renting details or hire a real estate management company to take care of the details for you. Weighing the pros and cons is important. You will take home more profit being in charge of the vacation villa rental yourself but you will also have to deal with the worries that go along with rental properties. Putting yourself in charge, however, will give you the ability to negotiate deals with your customers and will also allow you to offer specials of your choosing at the best price. It’s important to keep in mind whether it’s allowable to rent your property when purchasing your condominium. Be sure you ask that question when searching for condominium ownership in Hollywood Florida. As they say, owning real estate is one of your best investments and location, location, location is the key to escalating value. With the constant influx of new residents and tourists to the South Florida area, your question about location has already been answered.

Luxury Condominiums in Aventura or Orlando.

So, you’d rather not take the plunge to own a Florida condominium just yet. That’s alright. Some people could choose to rent first which will give you great insight into location and market. Looking for condominiums to rent in all these attractive areas will produce many results. You will have many options from which to choose, all of which can place you near Disneyworld and other major and lesser-known tourist activities. Along with the various opportunities to rent, consider Short term approved rentals communities, such as the Bella Piazza condos in the Orlando area. Other similar locations are abundant in Central Florida with locations in Kissimmee, near Disney, Orlando, and all spots in between within easy driving distance of theme parks, water parks and Orlando activities. Check www.condo-southflorida.com, for other good opportunities in Sunny Isles Beach, Hallandale, as well as the possibility of purchasing Aventura real estate. This could be a great choice since Aventura with its famous Aventura Mall, its restaurants, movie theatres, will always be a favorite.

Other Luxury Condominiums Purchase - Orlando Area

Just 5 miles southwest of Disney in Polk County, lies the quiet, small town of Davenport, Florida. Davenport is close to Disney, less than 30 minutes away and within easy driving distance of the abundance of Orlando sites. Kennedy Space Center is a little more than an hours’drive and Tampa and Cocoa Beach are accessible within an hour. Tampa is home to Busch Gardens, and Cocoa Beach boasts beautiful beaches and is home to Ron Jon’s surf shop, one of the most famous surf shops in the world. Davenport will give you that needed respite from the hustle and bustle of Kissimmee and city traffic after a long and fun-filled day at Disney. Davenport is only 9 miles from a Super Wal-Mart and boasts a new Publix supermarket close by. Luxury places to stay in Davenport include the Bella Piazza community, boasting 3 and 4-bedroom units fully furnished, and approved for short-term rentals. All wonderfully appointed, the accommodation here offers units with fully equipped kitchens with living and dining areas. Another luxury resort in Kissimee is the Cane Island complex. The Cane Island community offers three to four-bedroom condominiums, at a very reasonable price point. Great amenities, pool, make the Cane Island a valid option. Whatever your choice, buying or renting Florida condominiums, you will never regret the once-in-a lifetime opportunity now that prices are at a very low level.

In Hallandale

Judge tosses shopping center bankruptcy

An attempt by the owner of a shopping center in West Palm Beach to stop its foreclosure by filing Chapter 11 was derailed when U.S. Bankruptcy Judge A. Jay Cristol dismissed the case on Dec. 16.

Hialeah-based Mili-Trail Center filed for Chapter 11 reorganization on Nov. 9 – one day before its 18,000-square-foot plaza was set for a public auction in Palm Beach County Circuit Court.

Miami-based Great Eastern Bank won a $3.4 million foreclosure judgment against the developer, but it was stayed by the Chapter 11 filing.

The judge barred Mili-Trail from filing Chapter 11 for 180 days and ordered it to pay court costs.

In its successful motion to dismiss the Chapter 11 filing, Great Eastern argued that the case was a bad-faith filing because Mili-Trail is a single-asset debtor. Its only asset is the shopping center and the overwhelming majority of its claims are secured mortgages.

Single-asset real estate companies are treated uniquely in bankruptcy, which can mean a fast trip to foreclosure. The U.S. Bankruptcy Code was rewritten in 2005 in favor of lenders. For example, the code allows relief from bankruptcy stay if a debtor does not file a reorganization plan or make payments within 90 days.

Miami attorney Richard Siegmeister, who represents Mili-Trail, did not immediately respond to a call for comment.

The shopping center is on a 2.7-acre site at 1650 N. Military Trail, two blocks south of Okeechobee Boulevard.

South Florida Business Journal ; Dec. 23, 2008

Mortgage Brokers Try to Block RESPA Rule

Commercial Sector Wants In on Bailout

HOW UNITED REALTY GROUP AND HENRY B. NATHAN CAN HELP YOU FIND THAT PERFECT SUNNY ISLES OR HALLANDALE HOME

Business Year in Review

Real estate market comes to a screeching halt

Investors, brokers and owners of South Florida’s real estate will remember 2008 as the year when talk of a market slowdown became a sobering reality.
After a residential downturn built on a wave of subprime mortgage foreclosures, the region descended into a full-fledged economic crisis as activity in all sectors dried up.
Obtaining loans to purchase a home or commercial property became virtually impossible and the credit crunch spread to virtually every type of financing.
The real estate slowdown was particularly harsh in overbuilt Florida.

In South Florida, it takes 172 days longer to sell homes than in any other region in the U.S., according to an October report by California-based Altos Research and Real IQ.
And thousands of homeowners — many dealing with lost jobs and mortgages with rates that are resetting higher — are in foreclosure or teetering on the edge of default. Florida consistently ranks second in the nation in foreclosures. The slowdown was most obvious in the region’s condo market, where values plunged and the inventory of unsold units grew.

So far, the commercial market has avoided much of the chaos of the residential sector, but signs are beginning to show that even nonresidential real estate is headed for its own slump.
With financing scarce, investors were making few deals and institutional buyers remain sidelined. Unless Wall Street and the banking industry stabilize soon, it’s likely 2009 will usher in more turmoil. It was too little, too late when lenders finally reacted to the downturn.

To stem the tide of new toxic loans, many lenders quietly compiled lists of condominium developments where they wouldn’t make mortgage loans — regardless of the buyer’s credit rating. BankUnited, Washington Mutual, Popular Mortgage and CitiBank were among many lenders that blacklisted droves of South Florida projects. The move narrowed the options for strapped owners and suffering developers. There is no sign that condo lending will get any easier in 2009.

Vultures circling, not landing
Many looked to so-called vultures for some relief in a market frozen by a lack of credit and plummeting prices.
Vultures — opportunistic buyers hoping to pick big profits from South Florida’s troubled condo market — circled throughout the year as the inventory of unsold units continued to expand. But the vultures never landed as they waited for prices to fall further. The region did see a handful of deals involving large numbers of condo units. But the price gap between what investors were willing to pay and what sellers wanted remained wide and deals didn’t happen. As the market continues to deteriorate, lenders and developers are likely to accept bigger losses and sell for less. Experts say the price gap has already started to narrow and that trend will continue in 2009 increasing the likelihood that vultures may soon feast.

Even ultra-rich suffer
Even the ultra-rich weren’t immune to the decline. A number of millionaires — including restaurant owners, developers and financial industry executives — saw their homes go into foreclosure in 2008. One of the largest residential foreclosures ever involved the mansion of Veronica Hearst, the widow of newspaper heir Randolph Hearst. Veronica Hearst lost her 52-room Manalapan mansion after a nine-month foreclosure battle with lender New Stream Capital, which tried to recover about $40 million. Billionaire real estate developer Franklin L. Haney Sr. purchased the mansion from the lender for $23.5 million. Hearst sold her New York co-op for $36.5 million to pay the remainder of the debt.

Staying offshore

As the economic meltdown went global, offshore buyers were also hit with losses and those who still had capital opted to play the waiting game. This was more trouble for an already imperiled South Florida real estate market that previously could depend on international buyers when domestic investors were out of the picture. Some buyers with foreign ties completed a few isolated major deals. A New York-based subsidiary of Japanese investment firm Sumitomo Corp. bought the 34-story Miami Center office tower for $260 million in October. Hong Kong-based Swire Properties paid lender iStar Financial $41.3 million for 5.5 vacant acres on South Miami Avenue between Southwest Seventh and Eighth streets. But these deals aren’t typical of the market and barring an unexpected turnaround in South Florida real estate and a rebound the world economy, foreign buyers can be expected to stay at home in 2009.

Condo association blues

Foreclosure woes hit condo associations, too. Many were forced to the brink of insolvency as maintenance fees went unpaid on units in foreclosure. It triggered a snowball effect of increasing fees that drove other homeowners to pay late or not pay dues. Fear over the credit worthiness of condominiums led lenders to pull back on credit for associations.

Banks refused to renew revolving credit lines for condo associations struggling to repair damaged roofs, maintain elevators and pay for other big ticket expenses. They fear that as growing numbers of owners fall behind on their association fees or go into foreclosure, the associations won’t have enough revenue to pay back the loans. The money is especially critical to condo boards that are struggling pay for security, garbage collection and make repairs to roof, pools and other facilities. Although the situation hasn’t become a crisis yet, as the credit crunch heads into 2009, lenders are likely to continue tightening underwriting standards and condo boards will be forced to seek alternative sources of money.

Foreclosure crisis strikes South Florida

While trying to work out bad loans where they can, South Florida banks and other lenders began ratcheting up foreclosures toward the end of 2008, a trend that shows no signs of slowing. Banks are under intense regulatory pressure to remove bad loans from their books as expediently as possible, while other projects are simply viewed as beyond redemption.
Most visible on the foreclosure front has been Miami-based Ocean Bank, which is operating under a federal cease-and-desist order. The bank in 2008 foreclosed on a number of high-profile projects up and down Florida’s East Coast. Nationwide, loans in foreclosure rose to 2.97 percent, a record high for the Mortgage Bankers Association’s nearly 30-year-old survey, the association said in a December report, which predicted more delinquencies as job losses mount across the country and plummeting home prices make it difficult for struggling homeowners to sell. Prime and subprime adjustable rate mortgages continue to have the highest share of foreclosures and Florida has about 41 percent of the prime and subprime ARM foreclosure starts.

“Until recently, it was job and population losses that were the problems in states like Michigan and Ohio, whereas the problems in California and Florida were a combination of too many houses, speculation and weak underwriting,” said Jay Brinkmann, MBA’s chief economist. “Economic fundamentals are now deteriorating in California and Florida. Over the past year, Florida led the nation in job losses at 156,200.”

Bankers not landlords

As foreclosures surged in 2008, so did the inventory of bank-owned properties. But banks were overwhelmed and didn’t know how to shift from lenders to landlords. Initially, lenders were slow to react to the excess of properties on their books. They were reluctant to discount the prices and often rejected offers that were even just 5 percent below their asking prices. By June, however, reality set in and banks began to lower prices and accept offers 15 percent below the listed prices. As the foreclosure crisis enters 2009, real estate brokers predict lenders will spend much of the year cutting prices even more to clear distressed properties from their books.

Code enforcement

The foreclosure crisis left thousands of vacant and abandoned homes that dragged down the value of surrounding properties. And the impact on neighborhoods of overgrown grass, broken windows and fences, dirty pools and piles of trash and became a major concern for several municipalities. Code enforcement officials got tough citing lenders for violations adding to their distress in managing bloated portfolios.

Keeping up maintenance

Lenders got something else to worry about after the Miami-Dade Commission made them liable for maintenance of properties. It passed two ordinances in December that make lenders that foreclose on abandoned houses, condos and duplexes responsible for maintaining the properties — even if the delinquent borrowers still hold title to the properties — and for informing future buyers of the residences of any zoning and building code violations. Lenders will also have to pay for zoning and building inspections and inform buyers of the estimated cost of bringing the property up to code before selling the property. The disclosure of code violations would help buyers negotiate better deals, commissioners said, but banks claim it adds another hurdle to selling repossessed properties.

Foreclosure relief

A little help is on the way to help South Florida deal with its foreclosure flood. But it remains to be seen how local governments will spend almost $108 million in federal funds to help foreclosure ravaged neighborhoods. The funding is part of the 2008 Housing and Economic Recovery Act’s Neighborhood Stabilization Program, which set aside $3.92 billion in Community Development Block Grants. Miami-Dade County will receive $62.2 million, Palm Beach will get $27.7 million, and $17.8 million will go to Broward County. Also, the city of Miami is to receive $12.1 million, West Palm Beach $4.3 million and Fort Lauderdale $3.7 million.

Local governments will have wide lattitude in spending the money. They will have one year to allocate the money on specific projects and four years to spend the funding. Are tougher terms or borrower fears to blame? The debate will rage into the new year: Is South Florida’s frozen lending climate a result of banks’ tough new lending terms, or borrower fears of taking on new debt in a severe recession? While that question may never be settled with any certainty, what is clear is that tougher, back-to-basics lending terms will be in fashion for the foreseeable future. So will cautious borrowing, as businesses await clear signals that a sustainable recovery is underway. The federal government is doing its best to get lenders lending again, offering capital to banks in exchange for small ownership stakes. Many local community banks have applied for money, while retaining the option of whether to accept it if they qualify. The key to any thaw in credit markets will be confidence. Lenders and borrowers alike will be keeping an eye out for improving cash flows and a tipping point in which low interest rates and the economic stimulus package returns consumers to the marketplace.

Meanwhile, the winners will be those institutions who are able to compete for a dwindling pool of qualified borrowers. In South Florida, that battle will pit newly-arrived megabanks like Wells Fargo and JPMorgan Chase against community banks who will try to emphasize their local roots and customer service. Borrowers with solid track records in the market will also benefit as they shop around their business for the best deal.

All eyes on BankUnited

Community Banks will face a year of reckoning. South Florida’s 80 community banks defied expectations when — in the face of a yearlong recession and the greatest financial crisis in eight decades — they survived. Their staying power was largely due to the higher regulatory capital requirements imposed following the 1980s savings and loan crisis.
The coming year poses a much greater challenge, however, as many banks continue to hemorrhage money, pile up delinquent loans and burn through their capital to alarm-sounding levels. The canary in the coal mine heading into 2009 is Coral Gables-based BankUnited, which has unsuccessfully sought $400 million in capital as it prepares for $3.5 billion in resetting option-ARM mortgages over the next two years. The bank’s holding company disclosed in SEC filings that mounting losses raised “substantial doubt about our ability to continue as a going concern.”

Spanish acquisition

South Florida continued to say “ole” in 2008 as Spanish banks kept buying local institutions. The buying spree was capped by Caja Madrid’s $927 million purchase of an 83 percent stake in City National Bank of Florida. Caja Madrid joined a crowded field of Spanish banks already active in the region, including a number that have purchased local institutions to use as a launching pad into the U.S. market While South Florida’s demographics, proximity to Latin America and centurieslong historic ties to Spain make it naturally attractive to that country’s banks, the central question looking ahead is what role the global credit crisis will play in Spain — and to what extent that distraction crimps its banks’ New World expansion plans.

Fraud exposed

The real estate collapse exposed fraud that was previously easy to hide because of ever increasing property prices. But when prices started falling the problem came into fuller focus. A year after Miami-Dade created a mortgage fraud task force that included real estate industry insiders, the feds are considering similar nationwide programs. The federal Bureau of Justice Assistance in Washington wants to begin a fraud crackdown in the 10 hardest hit areas nationwide.

Hit by a different kind of storm

South Florida may have dodged a hurricane or two in 2008, but the state’s hurricane catastrophe fund has been buffeted by an economic storm. Known as the cat fund, it is considered a key source for payment of hurricane claims. The fund currently is obligated to cover up to $28 billion in losses. But the fund’s money is largely derived from bonds and the nation’s deepening financial crisis has cut into the ability of the fund’s administrators to raise bond money. Now the cat fund faces a shortfall ranging from $10 billion to $15 billion, according to the Florida Insurance Council. It’s likely lawmakers next year will consider reducing the fund’s exposure but that would require insurance companies, including the state-run Citizens Property Insurance, to buy mote reinsurance from the private markets. And those costs would be reflected in higher premiums paid by property owners.

Holiday season does little to brighten retail hell

South Florida retailers are feeling the sting of the worst economy in decades. The holiday shopping season officially kicked off with a fairly strong Black Friday — the first shopping day after Thanksgiving — but analysts and shopping center owners say retailers will struggle in the new year. As many as 14,000 retail locations are likely to close nationally in 2009, nearly doubling the amount of closings from 2008, predicts Carol Wyllie, executive vice president of commercial real estate owner and developer Graham Cos.

And consumer confidence continues to sink.

Reflecting the national retail climate, Boca Raton-based Office Depot is closing 9 percent of its North American stores. And General Growth Properties, a major owner of South Florida shopping centers, is scrambling to refinance its loan portfolio to avoid bankruptcy. In the face of declining home values and mounting unemployment, consumers are cutting back. Unless president-elect Barack Obama’s economic stimulus plans take hold early in his administration, retailers can expect a dismal 2009.

Las Olas pessimism

The grim retail picture is evident on Fort Lauderdale’s Las Olas Boulevard. For more than a year, the Las Olas Co. has talked about expanding the Riverside Hotel, but financing for the project still has not been secured, company chairman Irv Bowen said. In the current global financial crisis, loans are scarce and what money is available comes with high interest rates, even for creditworthy borrowers like the Las Olas Co., the street’s main landlord. Surviving merchants along the street, once considered the city’s premier shopping district, say shops that closed in preparation for the expansion only make the effects of a bad economy appear even worse. With the economy certain to deteriorate in 2009, is it likely money will be arranged to fund the hotel expansion — and spur a retail revival along the street? “I’m not in the guessing business,” Bowen said.

Glut of office space arrives at a bad time

Office projects planned while the economy was roaring will be delivered in the midst of the current recession, sending South Florida’s inventory of high-end office space soaring. Miami-Dade County is facing a glut of space with 1.9 million square feet to come online in the next three years. Much of the construction activity is in Miami’s Brickell Avenue financial district. Three projects that will have significant impact on Miami’s market when they open are:

• Rilea Group’s 570,000-square-foot building at 1450 Brickell Ave.

• Foram Group’s 600,000-square-foot project at 600 Brickell.

• MDM Development Group/MetLife’s 700,000-square-foot Met II at 355 SE Second Ave.

To the north, brokers in Broward and Palm Beach counties are dealing with the most office vacancies in several years as tenants downsize or close operations entirely and more space is built. Palm Beach brokers expect more than 1 million square feet of space to hit the market this year, including the 300,000-square-foot CityPlace Tower and the 150,000-square-foot 1800 Boca Center Phase I building in Boca Raton. Broward’s available office space unexpectedly increased earlier this year when Duke Realty was forced to take back 255,000 square feet of space in its Sunrise and Weston buildings from two tenants. Tenants could benefit, of course, as landlords offer more favorable rent rates and plenty of concessions to fill up space.

Losers were plentiful during 2008

Renzo and Pasquale Renzi’s ambitious, debt-driven plans to build condo projects across Miami-Dade and Palm Beach counties collapsed under to the weight their overleveraged development sites. The brothers refinanced their rapidly appreciating sites multiple times during the 2000s and used the proceeds to buy more land. But the strategy fell apart in 2008 when property values plummeted and they could no longer borrow their money to keep going.
In September, the Renzi’s started handing properties to lenders, including a 41,624-square-foot parcel near Collins Avenue and 67th Street in Miami Beach and an entire city block between in the heart of downtown West Palm Beach.

Merco Group

The Merco Group, headed by developer Homero Meruelo, lost a $30 million waterfront site to lender Eastern Financial Florida Credit Union. Meruelo tried to dodge the 4.5-acre foreclosure of the site for about a year. Meruelo claims he was only a minority shareholder in the project, which he said belonged to his father, who died in August. But Meruelo Jr. and the Merco Group of the Palm Beaches are named as defendants in several pending lawsuits regarding the site, including several filed by buyers who want to recover deposit money and one from the entity who sold the site to Meruelo in 2004 and claims he still owes $5 million on the purchase.

Whitney condominium

In West Palm Beach, developer Enrique Dilon lost the Whitney condominium. iStar FM Loans, a subsidiary of iStar Financial, won a $37 million foreclosure lawsuit against the developer of the Whitney, a 210-unit condominium building in downtown West Palm Beach. The developer recently handed over 141 units to iStar in a deed in lieu of foreclosure. The transfer was valued at $43.8 million. The units, which are listed through CB Richard Ellis, are under contract.

EB Developers

Financially troubled EB Developers was hit with multiple foreclosures throughout South Florida, including three in Palm Beach County. EB lost 42 acres in Palm Beach Gardens in a $29 million foreclosure by lender AmTrust. The same lender also has a pending $30 million foreclosure on about 1,200 acres in an unincorporated part of the county. Bank of America also filed to foreclose on about 108 acres near Boynton Beach seeking to recover a $35 million loan. And the Boca Raton-based company’s owner, Ellie Berdugo, died in February.

Convention center hotel

After years of negotiations, plans for a much-needed hotel adjacent to the convention center in West Palm Beach died. Palm Beach County commissioners killed the deal with Delray Beach-based Ocean Properties, the developer selected by the commission four years ago to build a 400-room Westin hotel. County officials are restarting the search for another developer, but that will be difficult in the down real estate market. Meanwhile, the county will continue to lose millions of dollars each year as convention planners take their events to other locations better suited for large meetings.

Boca Developers

Boca Developers was hit hard, with several projects in turmoil. The Las Olas Riverfront entertainment complex in downtown Fort Lauderdale and Biscayne Landing mixed-use project in North Miami were controversial even before the first spadefuls of dirt were turned to build them years ago. Now, a legal clash between Cerberus Capital Management unit Madeleine LLC in New York and developers Brian Street and James Cohen of Boca Developers in Deerfield Beach is certain to keep the projects mired in controversy even longer. The lender has sued for nonpayment of $189.7 million in loans and guarantees on nine projects in Florida, including Riverfront and Biscayne Landing. The developers say they’re not in default.
The suits were filed this month. And a new year of trouble lies ahead.

From: Florida Daily Business Review – Dec. 29, 2008

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