| What’s happening in commercial real estate in 2017? We’ve broken into the new year rising on a whole new wave of optimism and confidence. This is helping the economy in general, but especially applies to commercial real estate. This bullish sentiment along with billions in new infrastructure investment are certainly likely to turn around any doubts about the direction of the market we may have been encountering last year. Expectations are that 2017 will be a strong year of growth, with both prices and transaction activity at healthy levels in most areas. Interest Rates If one thing is for sure this year it is that interest rates are likely to be raised by the fed. Expect at least two hikes, if not more. This may be both good and challenging for the market. It may be worse for REITs, but good for direct investors who are looking for lenders to become more aggressive in 2017. The Affordability Gap Higher rates and prices are likely force a further widening in the affordability gap. In NYC we’ve got new sales price and rent records being set in Williamsburg. The is also creating a domino effect which is creeping south and pushing up prices in edgier neighborhoods, which may be next in line for gentrification and becoming trendy destinations. Meanwhile De Blasio, Cuomo, and other lawmakers are haggling over bringing back 421a. Debates are raging over whether the tax breaks and incentives designed to spur another 2,500 affordable units in greater NYC should also include larger condo units. Maturing Debt & Mortgage Deadlines $90B in commercial mortgages are coming due soon. Analysts expect 13% to 50% will have trouble refinancing. There is a lot of capital out there, though some could be additionally challenged by recent business trends and higher rates. Thankfully interest in acquisitions and redevelopment could help soak up a lot of these properties quickly. Opportunities Current trends indicate a lot of opportunity in the market. It is important to buy right, but with another 4 strong years of real estate growth expected, those holding out for steals, and who are still looking at old data could be missing out on a lot of great opportunities and gains. What will you invest in this year? Call me 305-809-6205 |
COMMERCIAL REAL ESTATE: 4 THINGS TO WATCH OUT FOR IN 2017
Pre construction condos in Miami may plunge
BY
Signs of a distressed preconstruction condo resale market in Miami are continuing, with StatFunding Founder Andrew Stearns’ January market report indicating “the number of condos with unsold developer units is increasing.”
Over the last three months, sales have fluttered as inventory swells and we should expect resale losses to continue with thousands of new units hitting the market in the coming quarters.
Stearns also took a snapshot of one specific condo in the 299-unit Icon Bay in Edgewater, which was completed in Summer 2015 and currently has 68 units for sale.
All resales in that development profited from July 2015 to April 2016 but all nine of the most recent sales dating back to May 2016 have incurred losses, including one unit selling for 28 percent ($190,300) under the original sale price.
“The Miami preconstruction condo resale market appears to be distressed,” Stearns writes. “As an additional 10,000+ units are completed and subsets of those units are then listed for resale over the next 24 months, the preconstruction condo resale market will likely continue to weaken.
“Unless something extremely positive and unexpected occurs which completely changes market conditions, Miami condo flippers should expect further losses on resale in the immediate future.”
Low-ball offers don’t work in today’s market
Anyone buying a property wants to get the best price, and smart offers often lead to deals.
For real estate agents, a smart offer can not only helps close a deal, it also earns them the gratitude and loyalty of clients, especially if they also save thousands of dollars, both upfront and over the life of a mortgage.
Tips to put homebuyers in a better negotiating position
1. Understand how to read the market
2017 is likely to remain a seller's market in most areas, but experts predict that buyers will have more choices in 2018 or 2019. Clients should understand this to help set their expectations, says Brad L'Engle, a real estate attorney and loan originator with the L'Engle team at Guild Mortgage in Folsom, California. If demand is hot and properties are scarce, he says, urge buyers who want to play hardball to think twice, or they may find their potential seller looking elsewhere.
2017 is likely to remain a seller's market in most areas, but experts predict that buyers will have more choices in 2018 or 2019. Clients should understand this to help set their expectations, says Brad L'Engle, a real estate attorney and loan originator with the L'Engle team at Guild Mortgage in Folsom, California. If demand is hot and properties are scarce, he says, urge buyers who want to play hardball to think twice, or they may find their potential seller looking elsewhere.
2. Be realistic about price
In a seller's market, one of the toughest dilemmas an agent will face is finding a way to tell buyers that a house is beyond their means, especially when the buyer has already fallen in love with it.
In a seller's market, one of the toughest dilemmas an agent will face is finding a way to tell buyers that a house is beyond their means, especially when the buyer has already fallen in love with it.
"I had one buyer who wanted to see a house that had come on the market at $385,000, even though the highest price she had been planning to bid was $375,000," says Becky Lund, a real estate pro leading Team Lund at Lyon Real Estate in Fair Oaks, California. "The house was completely updated with great views, just amazing, and I could see right away that it was going to get multiple offers."
However, against Lund's advice, the buyer was so excited that she decided to pull money out of her 401(k) to bump her bid up to $394,000. In the end, the house ended up selling for $415,000.
"What I tell buyers is that if there's an incredible house and you're already at the top price you can handle, you'll almost certainly be outbid," says Lund. "And you can save a lot of time and emotion and frustration if you just move on."
3. Don't put in unworkable "lowball" offers
The housing market has heated up in many parts of the country, so agents should gently discourage buyers who want to get tough with the sellers.
The housing market has heated up in many parts of the country, so agents should gently discourage buyers who want to get tough with the sellers.
"We're not in a market anymore where you can lowball somebody $20,000 below the list price," L'Engle says. "I tell clients to look at the listing and selling prices in a given area to help determine what's reasonable. If you're a buyer, don't lose your bid on a house to save $5,000."
Lund agrees: "If you've found your dream house, do you really want to let it go for a $5,000 difference? Help your buyers think through doing something they'll regret."
4. Do your homework
L'Engle advises buyers to check the MLS to find out how long the house has been listed. If it's been on the market longer than the average amount of time for your area, the seller may be ready to bargain. Any problems with the house? Disclosing this information is required by law.
L'Engle advises buyers to check the MLS to find out how long the house has been listed. If it's been on the market longer than the average amount of time for your area, the seller may be ready to bargain. Any problems with the house? Disclosing this information is required by law.
5. Get pre-approved for a mortgage
Getting pre-approval on a mortgage means buyers will know their price range and have a better chance at a smooth closing.
Getting pre-approval on a mortgage means buyers will know their price range and have a better chance at a smooth closing.
"Any agent with experience and talent would not work with a borrower who has not been pre-approved by a lender, and preferably a lender the agent has worked with before," L'Engle says. "Otherwise, your deals are going to fall apart more often than not."
Source: Steve Evans is an award-winning journalist who has worked as a reporter for SNL Financial, the Richmond-Times Dispatch and writes extensively about mortgages and home buying for MoneyGeek.com.
© Copyright 2017 INFORMATION, INC. Bethesda, MD (301) 215-4688
Miami's Condo Market Is Plummeting
Miami's Condo Market Is Plummeting
It's really difficult to be the bearer of more bad news this week. Progressives have woken up every day this week into a state of panic, crawling out of bed to check their news feeds, only to get the wind knocked out of them upon reading President Trump's newest slate of racist executive orders that seem all but designed to stir global unrest and disaster.
Trump is certainly a threat to Miami. But according to a study released yesterday, so is the city's condo market.
The study, by Andrew Stearns, a real-estate analyst who runs the website StatFunding.com, paints a bleak picture for Miami's condo market. Stears for months has warned that the massive glut of new condo buildings coming to market could hedge into anything from a brief period of "correction" to a full-on real-estate crisis in the next few years.
His latest study presents new evidence to back up his dire predictions: New, "preconstruction" condo sales are plummeting, he reports, just as inventory is reaching its all-time peak.
In September, Stearns told New Times that 3,000 condo units came to market in the last four years — and, despite the fact that most of those units haven't sold at all, developers are building a mind-numbing 11,000 more units by 2018. The results are already becoming clear: There's too much supply, and not nearly enough demand.
"Developers are getting stuck with unsold units at a time when overall condo inventories have built to over 13 months of supply at current sales rates," he writes.
In the resale market, just 13 new condos were "flipped" from November through January — and all of them lost money. One home-flipper at the ultra-luxury Faena House in Miami Beach lost $4.75 million after reselling a unit built in 2015. In addition, more than 70 units are listed as "underwater" — AKA their mortgages cost more than their homes are worth — and with such a glut of condos available, basically nobody is willing to lose money on an underwater investment.
Miami real-estate is typically propped up by foreign investors, but the surging U.S. dollar is likely discouraging Russian and Latin American buyers from shoveling money into the city like they had during the housing crisis.
"Because there are so many listings-for-losses in the market, comparable sales prices are trending down,
inventories are already at staggering levels, and thousands of new condo units will hit the market in 2017
and 2018, Miami condo flippers should expect losses on resale to continue," Stearns writes.
inventories are already at staggering levels, and thousands of new condo units will hit the market in 2017
and 2018, Miami condo flippers should expect losses on resale to continue," Stearns writes.
In addition, buildings aren't selling out nearly as fast as they used to. From 2012 to 2015, entire buildings typically sold out within months. But now, at least nine buildings that opened in 2015 and 2016 still have unsold units — including Brickell's Rise, which opened in September and is still about half vacant.
"The Miami pre-construction condo resale market appears to be distressed," Stearns writes. "As an additional 10,000+ units are completed and subsets of those units are then listed for resale over the next 24 months, the pre-construction condo resale market will likely continue to weaken. Unless something extremely positive and unexpected occurs which completely changes market conditions, Miami condo flippers should expect further losses on resale in the immediate future."
In case that all wasn't worrying enough, the Miami Herald reported earlier this week that the city's luxury real-estate market is taking a beating, too. The culprit is the same: Over-supply.
University of Miami proposes massive $100M student housing project
A $100 million student housing expansion is in the works at the University of Miami, with plans filed to build a development that will house over 1,100 beds on an 8.6-acre site on Lake Osceola, per the South Florida Business Journal.
It would be located on the 8.6-acre site between Lake Osceola and Stanford Drive near the University Center and Eaton Residential College. It would replace a parking lot, and the connection between Dickinson Drive and Merrick Street would be eliminated. In their place, there would be a garden and green space at the base of the dorms, with breezeways between them.
The project entails a development comprised of 23 buildings with amenities on the first two floors that include a learning center, Launch Pad for start-up companies, 200-seat auditorium, retail, micro theater, and food services.
It’s not a bad idea considering the U is located in Coral Gables, a city with rents far from the typical college-friendly prices you’ll find at major universities in college towns across the nation.
Nice one-bedroom apartments nearby are going for around $2,000 a month, which is mind-numbing compared to the $600 a month I was paying in Happy Valley back in 2010.
300 new WI-FI spots, for free in Miami
Miami-Dade County approved a partnership with with CIVIQ Smartscapes to “implement the nation’s first fully integrated smart city ecosystem throughout Miami Dade,” per a press release.
The initial phase of the deal will be over the next three months, where CIVIQ will install and maintain up to 300 WayPoints, which are interactive and include free high-speed Wi-Fi, over 1,000 Wi-Fi devices in public transit vehicles, and 51 Wi-Fi devices for transit stations. Free Wi-Fi will also be available on all public transit buses and trains.
“These new devices and services are much more than a new way to access the internet,” said Alice N. Bravo P.E., Miami-Dade Director of Transportation & Public Works. “Greater connectivity in the transit system means increased efficiency, less downtime, and overall better experiences for our passengers.”
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Another positive? A zero-net cost to taxpayers.
CIVIQ will fund the $20 million to start the project and will generate revenue off digital ads on the kiosks, with Miami-Dade receiving a revenue share, according to Miami Today, in the form of “3 percent in the first six years, 4 percent the second six, then 5 percent through the 17th year.”
A little more about what CIVIQ Smartscapes does, per their website:
Save the date, January 19th, 2017 from 10:30 to 12PM
Complimentary FIRPTA seminar
All brokers welcome!
Aston Martin Miami
RESIDENCE FEATURES
- Premium white marble flooring throughout living areas, kitchen and bathrooms
- 10 FT. ceiling height in residences
- 12 FT. ceiling height in penthouses
- Expansive floor plan layouts
- Floor to ceiling windows and sliding glass doors throughout residences
- Balconies with finished porcelain flooring
- Custom Bulthaup brand kitchens
- Top of the line kitchen appliances
- Bathrooms with custom designed cabinetry
- Panoramic views of Biscayne Bay, Ocean and the Miami Skyline
BUILDING INFORMATION
- 391 Residential Condominium units
- 1-5 bedroom Residences, Duplexes, and
Penthouses
- Residences ranging from 698 SF. to 18,811 SF. - 66 Floors
Residences from $500,000 to $7,000,000 Penthouses from $14,000,000 to $35,000,000 including Triplex PH with private pools
DEVELOPMENT
G & G Business Developments LLC
ARCHITECTS
BMA & Revuelta Architecture International
INTERIORS AND PUBLIC SPACES BMA
- Levels 3 through 14 River Residences
- Levels 15 through 45 Panoramic Residences
- Levels 46 through 51 Sky Residences
- Levels 56 through 62 Penthouses
- Levels 63 through 66 Triplex Penthouse
RESIDENTIAL AMENITIES & SERVICES
- Interior architecture by acclaimed architects
BMA & Revuelta Architecture International
- Full service building with concierge and hospitality inspired services
- Super Yacht Marina facilities
- “The Aston Martin Club” membership
- Building designed with helipad on rooftop
- 24 hour valet and covered garage self parking
- Valet charging stations for electric cars
- Valet Butler
- Additional bicycle and private storage spaces
- 10 destination controlled super hi-speed elevators and separate dedicated service elevators
- Digital connection to concierge and all building amenities from every residence
- Rooftop infinity pool located on 55th floor
- Fitness Spa and Fitness Center with Meditation
Room and Treatments Suites
- Private Steam, Sauna, and Locker Facilities
- State of the Art Business Center and conference rooms
- Art Gallery and Art Lobby on 53rd floor
- Private Residence Movie Theatre, Event Space, Kids Playroom, Teen Center, and Game Rooms
- Virtual Golf
- Beauty Salon with blow dry station, pedicure chair, manicure table, and wash stations
- Pet Friendly Building
AMENITIES - LEVEL 55
SCHEDULE FOR BUYERS DEPOSITS
10% Deposit–At the time of Contract
Estimate Date: Today
10% Deposit
At start of construction Fall 2017
10% Deposit At the time of completion of foundation
Fall 2018
10% Pedestal Complete Spring 2019
8800 Collins Ave. | A new marvel
SOPHISTICATED SURFSIDE LIVING
8800 Collins Avenue, Surfside, FL 33154
At just steps from the pristine Surfside beach, with the amenities of a larger building but in a boutique
and intimate setting, 88 Hundred Collins offers the alternative to large skyscraper living.
This perfectly located, boutique 28 residence building with a modern and simple design will feel like
a home. Offering the first lofts in Surfside, this building is actually meant to be lived in.
A PERFECT LOCATION
• Steps from the Beach
• Two Blocks from North Shore Open Space Park, 36 acres of oceanfront green space
• Across the street from the Surfside Tennis Center
• At walking distance from The Shul Jewish Community Center and St. Joseph’s Catholic Church
• Free shuttle transportation to downtown Surfside, Miami Beach and Bal Harbour
UNITS AND FEATURES
12 unique LOFT units
• Modern, urban, sophisticated
• One master bedroom with full bath on the mezzanine + a Den/flex room and another full bath on
main level
• Open layout kitchen and double-height living room with floor to ceiling glass wall
• One assigned, covered parking space per unit
• 1065 to 1550 square feet of interior/air conditioned area
16 contemporary luxury HOME residences
• Luxurious, contemporary and spacious
• Layouts feature flexible configuration options offering two bedrooms and a generous den, each
with a full bath
• A convenient laundry room is located in the upper/privater floor and an additional family room is
available in some units
• Two assigned, covered parking spaces per unit
• 2010 to 2626 square feet of interior/air conditioned area
• 9 units will enjoy a private terrace with Jacuzzi and landscaped trellis, offering an expansive outdoor
space of 500 to 600 square feet. A private elevator is an option for 5 of these units
All units offer
• Stylish architecture, modern designed kitchens with Bosch appliances and luxurious bathrooms
• Environmentally sustainable design features
• Floor to ceiling high impact windows in living rooms
• Walk-in closets in Master bedrooms and some second bedrooms
• State of the art security system
• Designer-ready delivery
AMENITIES
• The Sunset Terrace with pool, lounge and barbecue area enjoying unobstructed views
• An enclosed gym with state of the art equipment and a landscaped outdoor Yoga Terrace
• State of the art security system
• Bicycle Storage
PRICING
Starting at $695,000
TEAM
Developer: Harding Developers LLC.
Architect: Cristina Fandino
Interior Design: PG Studio
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