Category Archives: Miami Real Estate

Setai and Other Luxury South Beach Condos Headed to Foreclosure Auction

South Beach condo units set for auction

January 26, 2012 12:00PM

The Setai

A total of 48 condominium units in South Beach will be heading to auction in the next 30 days, with a number from high-profile projects like the Setai, Portofino and the Murano Grande, according to a report from Condo Vultures. The units hold a total of $14.5 million in final foreclosure judgements. A unit at the Setai is the highest-priced foreclosure judgment set for auction, at $2.5 million. The next-highest foreclosure judgment is on a unit at the Bentley Bay condo complex in South Beach. In December, a unit at the Setai sold for $21.5 million, one of the largest sales of 2011.  — Alexander Britell

South Florida’s Crisis in One Chart

The Miami Herald

South Florida’s real estate crisis in one chart

By DOUGLAS HANKS
dhanks@MiamiHerald.com

South Florida’s housing crash may be old news, but recent data offer some valuable perspective.The Federal Housing Finance Agency maintains appreciation indices for metropolitan areas, which are similar to the famous Case-Shiller index but more local. By stacking up Broward and Miami-Dade’s indices to the nation’s, the warning signs are hard to miss.

The chart anchors all three indices to the first quarter of 2000, so the numbers show appreciation since then. Real estate got out of hand across the country, with appreciation peaking nationally at 166 percent in 2007. But in Broward, values soared 272 percent. Miami-Dade did even better, up 283 percent.

It’s easy to see how quickly values collapsed, but the chart also points out something that tends to be overlooked amid the wreckage of real estate. Home values are still ahead of where they were in 2003.

But perhaps more surprising, local property has actually held its value better than the average home in the United States. According to the FHFA, the average U.S. home is worth about 40 percent more than it was at the start of 2000. In Broward, the average home is worth 49 percent more. In Miami-Dade, it’s 56 percent more valuable.

A sign of resiliency, or a hint that South Florida still has some dropping to do? We’ll probably find out this year.

The Miami Herald’s Economic Time Machine charts South Florida’s recovery from the Great Recession by comparing current conditions to levels set before the downturn.

The ETM crunches 60 local indicators to measure the economic activity, then finds when each indicator was at that level before the 2007-2009 recession. At the moment, the current economy most resembles where it was in June 2002. Visit miamiherald.com/economic-time-machine for updates and analysis of the latest economic data.

Is Miami Asia’s new investment target?

Is Miami Asia’s new investment target?

October 11, 2011 06:15PM
By Alexander Britell


A rendering of Genting’s Resorts World Miami 

Malaysian firm Genting’s purchase of the Miami Herald headquarters this year and large-scale plans for a casino resort could be the first of a wave of Asian investment in Miami, brokers and analysts say — both in the commercial and residential sectors.

While Latin AmericanCanadian and European buyers have spearheaded a sales surge in Miami, particularly on the residential side, Asian investment could be on the way.

And in fact, Genting is not alone.

Fellow developer Swire Properties, which is working on the mixed-use Brickell CitiCentre project downtown, has significant Hong Kong ties.

One of the notable guests at the official opening of developer Wexford’s University of Miami Life Science and Technology Park last month was a delegation from Taiwan.

“It’s my belief that we’re going to see a lot more Asian investment in South Florida in the future,” said Miami real estate analyst Jack McCabe. “They’ll add to the pot of buyers, which bodes well for sellers in the future. But I think there’s more and more [Asian] interest in South Florida.”

Investment from the far eastern part of the world could follow similar paths to those first treaded by Latin Americans, according to Peter Zalewski, founder of brokerage and consultancy Condo Vultures.

“I would anticipate that it will play out like with other countries,” Zalewski said. “Argentina comes here and builds and sells to Argentines. Brazil comes here and sells to Brazilians. I could see the same thing type of scenario playing out for the Asian buyer, especially for the Chinese.”

Accordingly, residential is likely to follow — and Miami is beginning to see moves by Asian homebuyers, particularly from China — although nothing like the wave of Brazilian and Canadian buyers seen so far.

“I think a lot of people think that’s going to happen, but it hasn’t happened right now, where there are droves of people from China,” said Jill Hertzberg, a sales associate Coldwell Banker. “But we’re ready.”

Asian buyers actually represent about 26 percent of the foreign homebuying market in the United States, according to data from the National Association of Realtors, and there have been more home sales to Chinese buyers than to any country but Canada this year, or about 9 percent of the international market.

Douglas Elliman Florida broker associate Madeleine Romanello said she had been seeing an uptick in interested Chinese clients in the market she largely covers — Miami Beach.

“In general as a city, we’re becoming more global, rather than just South and Central American-style cosmopolitan,” she said.

Hertzberg’s fellow sales associate Jill Eber said one Chinese buyer in Miami Beach with whom she had dealt had chosen not to buy, and instead rented a property for more than $100,000 per month, and another Chinese buyer in Miami Beach paid about $5 million for a property on the island.

“There are definitely Chinese people coming here, and the prediction is that as development gets its footing, it will attract more people from the country, and they will come here,” she said.

But while the Asian entry to the market may be relatively inchoate, it’s likely that Miami has been under consideration for investment for a great deal more time, McCabe the analyst said.

“Asian investors are not ones to make one due diligence trip and decide to invest millions,” he said. “They take their time, and really research and look for certain guidelines and goals.”

Miami chamber votes to support expanded gambling, with caveats

South Florida Business Journal by Oscar Pedro Musibay, Reporter

Date: Wednesday, January 4, 2012, 2:55pm EST – Last Modified: Wednesday, January 4, 2012, 4:10pm EST

The Greater Miami Chamber of Commerce, as part of its legislative agenda for the state of Florida in 2012, has tentatively supported the establishment of destination resorts, as long as 75 percent of the workforce is local and the impacted community supports expanding gambling through referendum.

The chamber’s board of directors voted on the issue during a closed-door meeting Wednesday to discuss both its federal and state legislative platforms. The meeting lasted an hour, with the gambling discussion lasting about 20 minutes, prior to the vote, chamber President and CEO Barry E. Johnson said.

He said the approved platform also required parity between destination resorts and the pari-mutuel industry; however, the tax rate and games available to each would not necessarily have to mirror each other. Additionally, local government would have to receive some of the gambling proceeds to “mitigate for any impacts to the surrounding communities and to provide for improvements to public infrastructure” like transportation, according to a copy of the approved language. The current legislation sends all of the new revenue to the state, Johnson said.

The chamber also wants license holders to enter into a “public-private partnership that contributes to the mitigation of the added social and infrastructure impact on the community,” according to the approved language.

He said the exact number of votes tallied was not immediately available, but the ratio was about 3 to 1 in favor.

On Tuesday, Jobs 4 Florida voiced its support for the pending destination resort legislation by letter. Jobs 4 Florida said it represents about 300,000 people through a coalition that includes Associated Builders and Contractors of Florida, the Gold Coast Builders AssociationLatin Builders Association and Engineering Contractors of South Florida.

“The construction industry in Florida has been devastated during this prolonged economic recession,” the group stated in the letter. “Next to tourism and hospitality, construction is one of the biggest economic drivers for Florida’s economy. We cannot continue to ignore the fact that this legislation would allow for people to come off the unemployment line and get back to work.”

The Genting Group, which is seeking a license for a destination resort for its holdings in downtown Miami, embraced the result of the vote.

“Today’s Greater Miami Chamber of Commerce decision to support regulated destination resorts demonstrates the strong consensus that exists among business and civic leaders who recognize the benefits these projects will bring to our community,” said Christian Goode, president of Resorts World Miami, in a statement. “Local residents and small businesses understand that destination resorts will result in billions of dollars in new investment, millions of new tourists annually, tens of thousands of new jobs, and much-needed relief for businesses in Miami and across the state. We look forward to collaborating with the Greater Miami Chamber of Commerce and other stakeholders, residents and businesses as Resorts World Miami takes shape.”

Sen. Ellyn Bogdanoff, R-Fort Lauderdale, co-sponsor of a bill designed to attract large, Las Vegas-style resorts to Florida, is also attempting to address some of the same issues the chamber raised. She is working on a “strike-all amendment” that would replace her original legislation with new language. Some possible features of the new bill include allowing pari-mutuels that invest $100 million to add more games, lowering the slot machine tax and requiring a local referendum on expanded gambling.

The original gambling bill required destination resorts to have at least $2 billion in investment, plus pay a 10 percent tax on revenue from slot machines, a far cry from the 35 percent tax pari-mutuels currently pay.

The suggested revisions Bogdanoff sent to some legislators include a flat rate of 18 percent on all slots.

The Senate Committee on Regulated Industries meets Jan. 9. A bill that is detrimental to pari-mutuels’ competitiveness in comparison to destination resorts is a “non-starter,” Democrats have said.

Nick Iarossi, a lobbyist for Las Vegas Sands Corp. (NYSE: LVS) and a government consultant with Capital Consulting in Tallahassee, said the Jan. 9 vote is important because if the 10-member committee votes the bill down, it’s dead. So, the vote will be closely monitored by a lot of parties.

Voters would also have to approve allowing pari-mutuels to expand the games they offer to include roulette and other Las Vegas-style games.

Regardless of the details in the final bill, the road will be rough for supporters of expanded gambling.

Miami Beach officials voted against expanding what is already available.

Additionally, Miami-Dade County is asking that destination gambling resort legislation include a section that would mandate a 12- to 18-month local government review process.

At a recent Beacon Council workshop, CEO Frank Nero called for a delay in the legislation to give everyone more time to consider the issue.

Other powerful business groups, including the Florida Chamber of Commerce, Florida Retail Federation and Florida Attractions Associationalso oppose destination resorts, saying they will hurt the state’s image and existing development efforts.

More Pushback Against Casinos in Miami

More pushback against casinos

South Florida Business Journal by Kevin Gale, Editor in Chief

Date: Tuesday, December 20, 2011, 10:10am EST

Miami Herald headquartersMark Freerks

Preservationists are seeking to protect the Miami Herald’s headquarters building.

Kevin Gale
Editor in Chief – South Florida Business Journal
Email  | LinkedIn  | Twitter | Facebook

Resorts World Miami reacted quickly Tuesday to the notion thatThe Miami Herald‘s headquarters building should be preserved rather than torn down for a $3.8 billion destination resort.

“The Miami Herald Building has long been an affront to smart urban planning and does not comply with Miami 21 code, nor with the City’s Charter Amendment, which require 70 percent active uses, 50 foot setbacks from the water with public access, and a 25 percent view corridor from the street,” a statement attributed to Resorts World Miami President Christian Goode said.

An article in the Tuesday edition of the Herald by Andres Viglucci, who has written extensively about architecture, talked about a move by the Dade Heritage Trust to seek protected landmark status for the newspaper’s headquarters building.

That article and another one, about hotel rates, exemplify the myriad of opposition and obstacles to destination gambling resorts in South Florida.

A local section article talks about the Herald HQ’s status as an iconic example of Miami Modern (MiMo), a mid-century architecture that emerged from Miami’s resorts. The related category of mid-century modern architecture includes Fort Lauderdale’s Hyatt Regency Pier Sixty-Six, with its spires and revolving rooftop restaurant. Preservationists were unhappy that another mid-century modern hotel across the street was torn down, partly because of the parabolic roof by its front office.

Viglucci is on target when he talks about how a lot of people don’t appreciate MiMo. However, a lack of appreciation for architectural history isn’t anything unusual in South Florida. A few years ago, I found a 30-year-old article in the then-Miami Business Journal about plans to raze South Beach Art Deco hotels and dredge a bunch of canals.

Whether preservationists will succeed in their goal with the Herald building is debatable, but it’s another headache for Genting Group as it seeks support to build Resorts World Miami. (If you want to read more about the destination resort debate, here are links to a recent debate in Miami and an earlier one in Fort Lauderdale.)

The article said the existing Herald building might be incorporated into a casino, but how do you successfully meld the curvy lines of Arquitectonica‘s plans for a new resort with a boxy building squatting along Biscayne Bay?

Goode’s statement continued to emphasize economic benefits and pluses for the community.

“Any impacts derived from preserving the Herald building are far outweighed by the benefits that a new master-planned development will bring to the Omni neighborhood, including activating the downtown waterfront, employing tens of thousands of Floridians, generating meaningful tax revenue, and adding value to a depressed area,” the statement said. “Efforts to stall this progress show just how far opponents of sensible development will go in putting their interests above what’s best for everyday citizens in the community.”

The statement’s “just how far” comment is indicative of how the debate is heating up.

So, who’s on the Dade Heritage Trust?

The president is Bertram “Chico” Goldsmith, who began his career in downtown Miami working for the Walter Etling Real Estate Co., according to a biography on the website for Informed Families, an organization he has served as chairman. Goldsmith has focused his efforts on managing his family’s real estate holdings.

I didn’t recognize the names of most of the people on the trustee list, except for Matthew Greer, CEO of affordable housing developer Carlisle Development Group, and bankerDwight Hill. The separate advisory group includes banker Adolfo Henriques, who won the Greater Miami Chamber of Commerce Sand in My Shoes Award; PR specialistLeslie Pantin; famed architect Elizabeth Plater-Zyberk; preservationist Ava Moore Parks; former Coral Gables Mayor Donald Slesnick II; and Bruce Matheson, whose family was among the pioneers in Miami-Dade County.

For Genting, this could be a formidable opposition, even though the Herald article said some board members thought the move on the Herald building was overreaching.

In the other article, an analysis by Strategic Advisory Group shows Miami Beach hotels have dramatically higher rates than Las Vegas hotels.

That fits in with a general concern that a destination gambling resort, with room rates subsidized by a casino, could drive down overall room rates and hurt existing businesses. Genting is planning 5,200 rooms in four towers, so it would be a big player.

“They’re going to destroy the market inventory,” said Stuart Blumberg, who formerly led the Greater Miami and the Beaches Hotel Association.

Last week, the Miami Beach City Commission soundly rejected the concept of a gambling resort.

There are other issues Genting and other would-be destination resort developers face. I’ll cover some of them in a year-end look back in Friday’s print edition of the South Florida Business Journal.

Payroll Tax Cut Bill Boosts Cost of New Mortgages

WASHINGTON – Dec. 19, 2011 – Who is paying for the two-month extension of the payroll tax cut working its way through Congress? The cost is being dropped in the laps of most people who buy homes or refinance beginning next year.

The typical person who buys a $200,000 home or refinances that amount starting on Jan. 1 would have to pay roughly $17 more a month for their mortgage, thanks to a fee increase included in the payroll tax cut bill that the Senate passed Saturday. The White House said the fee increases would be phased in gradually.

The legislation provides a two-month extension of a payroll tax cut and long-term unemployment benefits that would otherwise expire on Jan. 1. It would also delay for two months a cut in Medicare reimbursements for doctors; the cut is currently scheduled to take effect on New Year’s Day.

However, the House intends to vote down the two-month extension of the payroll tax cut, Speaker John Boehner said Monday, and request immediate negotiations on a full-year renewal that can provide “certainty for people who are trying to create jobs.”

“I don’t believe the differences between the House and Senate are that great,” Boehner said at a news conference, although he provided no estimate on how long it might take to produce a compromise.

To cover its $33 billion price tag, the Senate-passed measure increases the fee that the government-backed mortgage giants, Fannie Mae and Freddie Mac, charge to insure home mortgages. That fee, which Senate aides said currently averages around 0.3 percentage point, would rise by 0.1 percentage point under the bill. The increase will also apply to people whose mortgages are backed by the Federal Housing Administration, which typically serves lower-income and first-time buyers.

The higher fee would not apply to people who currently have mortgages unless they refinance beginning next year.

Because of the weak housing market and the huge numbers of foreclosures in the last few years, private insurers have not competed strongly for business with Fannie Mae and Freddie Mac, which have the backing of the federal government. As a result, Fannie Mae, Freddie Mac and the FHA back about 9 in 10 new home mortgages.

President Barack Obama and many congressional Democrats and Republicans want to curb Fannie Mae’s and Freddie Mac’s dominance in the mortgage market. Obama earlier this year proposed raising the mortgage guarantee fees they charge as one way to do that.
AP Logo Copyright © 2011 The Associated Press, Alan Fram. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Brazil’s Slowdown Hurts South Florida Housing Market

The Miami Herald

Brazil’s economy slows

BY MIMI WHITEFIELD
mwhitefield@MiamiHerald.com

Brazil still might be the darling of foreign investors and Miami real-estate agents but as the year draws to a close, its once booming economy is slowing.Fueled by a commodities boom, a growing middle class, and mineral wealth, Brazil’s economy hummed along with a 7.5 percent growth rate in 2010. But now most economists are pegging gross domestic product growth at 3 to 3.5 percent this year — and in its most recent forecast, Fitch Ratings said the Brazilian economy would grow only 2.8 percent.“Brazil is slowing down; it’s been slowing down since the second quarter,’’ said Guilherme Da Nobrega, senior economist at Sao Paulo-based Banco Itaú, during a recent visit to Miami. His estimate has been revised down from 3.6 percent to 3 percent growth.

The Brazilian economy, he said, “was growing too fast at the end of last year.’’ Inflation also was rising.

That economic exuberance — coupled with a strong real and depressed local real-estate prices — drove Brazilians to Miami in 2011 to buy everything from ocean-view condominiums to sports gear, iPads, and fashion.

The Brazilian economy also is closely watched in South Florida because Brazil is the region’s top trading partner, and earlier this year a group of nearly 200 Floridians traveled to Brazil on a trade mission led by Gov. Rick Scott.

To cool things down, the Brazilian government adopted tighter economic policies at the beginning of 2011; its central bank also raised rates. The government also held back on public spending for infrastructure projects, such as bridges, said Da Nobrega, who spoke at the Americas Society/Council of the Americas Latin American Predictors Forum in Coral Gables earlier this month.

“That did the trick,’’ said Da Nobrega.

But Brazilian industrial production began to slump in the third quarter and was down 2.2 percent in October compared to the previous year. Twenty out of 27 sectors contracted during the month, according to Barclays Capital.

Though it is still considered strong, the Brazilian currency also began to bounce around this fall — a change that has affected some Miami real-estate purchases. The real has fallen 8.1 percent against the dollar in the past three months.

With the economy weakening, Brazil’s central bank began cutting rates in August.

And to counteract the potential impact of a widening European financial crisis, it took several measures Dec. 1 to stimulate and strengthen the economy. They included tax cuts on financial operations, tax credits of up to 3 percent on 8,500 manufactured products destined for export sales, and increased home-value eligibilityfor developer tax breaks under the My Home My Life program.

To encourage the inflow of long-term foreign investment capital, for example, the taxes on foreign investment in stocks and venture capital were cut from 2 percent to 0.

The tax on so-called white goods — stoves, refrigerators, washing machines, and the like — also was cut to encourage the consumption of durable goods.

Da Nobrega said he anticipates “another couple of months of negative numbers” before the economy begins to pick up again. With the tax cuts, he said, the Brazilian economy should be growing by the second quarter and he predicts growth of about 3.5 percent in 2012.

“We are happy with that number,’’ he said. With current policies, he said, there’s a little more risk for higher inflation but a bit less risk of slow growth.

But Da Nobrega said Brazil will have to continue to watch the European situation closely.

Meanwhile, with the approach of the 2014 World Cup in several Brazilian cities and the 2016 Olympic Games in Rio de Janeiro, Brazil is in the midst of an investment boom. “We don’t run any risk of over-investment in Brazil,’’ Da Nobrega said. “As long as there is financing at all in the world, Brazil is going to take an important chunk of it.’’

Figures released by Brazil’s central bank Thursday showed that the United States wasstill Brazil’s biggest foreign investor with $105 billion in investments, excluding inter-company loans, at the end of 2010. And although China has replaced the United States as Brazil’s top trading partner, Chinese investments totaled just $8 billion, putting it in 16th place among foreign investors in Brazil.

Overall, foreign investment increased from $163 billion in 2005 to $580 billion in 2010, according to the central bank report.

Other analysts also say that 2012 seems to be shaping up as a better year for Latin America’s largest economy.

“The recent depreciation of the Brazilian currency plus the slowdown in inflation and the drop in interest rates will be very helpful for improving the health of the Brazilian economy,” Eugenio J. Aléman, senior economist at Wells Fargo Securities, said in a report released last week.

Read more: http://www.miamiherald.com/2011/12/16/v-print/2548407/brazils-economy-slows.html#ixzz1gjug9QNk