Expansion plan off at Hard Rock Hotel

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Feb. 24, 2006 Copyright � Las Vegas Review-Journal Expansion plan off at Hard Rock Hotel By HUBBLE SMITH REVIEW-JOURNAL The planned $1 billion condominium-hotel expansion of the Hard Rock Hotel has been postponed and buyers are being offered a refund on their deposits, Hard Rock owner Peter Morton said Thursday. The sales center for the Bungalows, Flats and Residences, a 1,200-unit project that was announced last year, is closed and the sales staff has been let go, broker Raymond Ware confirmed. Morton said he has received offers to buy the Hard Rock. The expansion on 24 acres behind the hotel, now the site of an apartment complex, would be included in that transaction. Industry experts estimate the Hard Rock to be worth $750 million to $900 million, including the $86 million apartment property. "While we pursue the possibility of this transaction, we put the project on hold while we go through the process to make a determination of what the buyer wants to do with the 24 acres attached to our property," Morton said. "You can't hold someone's money while the decision is in the process of being formulated as to the future of the Hard Rock. So we sent out letters and gave people the option. If they want to stay in the project, that's cool. If they want their money back plus interest, that's cool, too." Morton said deposits amounted to 10 percent of the purchase price. When he unveiled a model of the project in May 2005, he said 375 units were already sold at The Residences, the tallest of the buildings at 350 feet. Prices started in the mid-$900s. Two smaller buildings called The Flats would have 738 condo-hotel units starting from the mid-$400,000s for 550-square-foot studios. Thirty-two poolside Bungalows, ranging from 1,800 to 3,600 square feet, started at $2.5 million. Along with the residences, the expansion would include The Joint concert venue, a collection of restaurants and a rooftop lounge. The project, designed by architect Chad Oppenheim of Miami with Las Vegas-based Marnell Corrao as the general contractor, was supposed to break ground in August. Bruce Hiatt, owner and broker of Luxury Realty Group in Las Vegas, said he didn't have a lot of client interest in the Hard Rock project because prices were so high. If they want to spend $1.4 million for a one-bedroom suite, they could go to Trump International or Sky Las Vegas and be on the Strip for the same price, he said. Hiatt said local brokers are trying to figure out if the project would proceed under another buyer. "If they do not go forward, the whole supply-demand imbalance is starting to occur here," he said. With Related Cos. canceling the twin-tower Icon project, the Hard Rock expansion in question and W Hotel and Las Ramblas building only a limited number of units, Hiatt said he's becoming very bullish on the Las Vegas high-rise condo market. "It actually changes the whole view of Las Vegas compared to New York or Miami. We don't have saturation, and that is incredible for this market," he said. Edge Resorts has cleared the site behind the Ice nightclub at Koval Lane and Harmon Avenue for the W Hotel, and billboards along Harmon advertise, "Own Vegas." Las Ramblas, a $3.5 billion joint venture between Las Vegas-based Centra Properties and Related Las Vegas, is planned for 25 acres on Harmon that's now home to the Harbor Island apartments. Centra principal Jim Stuart said there's not enough of a historical perspective in Las Vegas to draw a conclusion about how many condo-hotel units the market will support. But Stuart said he's sure condo-hotels will be a part of the future here. "How deep of a market we have will play out over the next 10 years," he said. "All of the projects have to be slow and cautious in their first phases, not overly ambitious. This is going to be a marathon, not a sprint." One project already under construction and near completion is The Residences at MGM Grand, which has sold out of its first two towers. "I don't see any negative fallout (from Hard Rock) for us, one way or the other," said Dan Riordan, sales director for The Residences. "If anything, it's going to be a plus. There's fewer and fewer projects actually out there that are getting built and there's still the same number of buyers out there that want to own. I think it helps us and any other projects going forward that are high quality."

Find this article at: http://www.reviewjournal.com/lvrj_home/2006/Feb-24-Fri-2006/business/6049516.html

Condo Hotels: The Latest Twist In Buying a Vacation Residence

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Condo Hotels: The Latest Twist
In Buying a Vacation Residence

By Michael Corkery
From The Wall Street Journal Online

Hoping to cash in on Americans' appetite for vacation properties, hotels are increasingly selling something new: a piece of the hotel.

In the past few years, developers have started aggressively marketing "condo hotels," which look and feel like regular hotels with one difference -- you can buy an individual room. Owners can use that room whenever they want, and they also share in any income when the hotel rents it out to other guests.

Properties like these aren't entirely a new concept: Real-estate mogul Donald Trump developed an early one 14 years ago. However, today the number is rising. As of December, condo-hotel rooms made up 11% of the roughly 113,170 new hotel rooms under construction in the U.S., according to Smith Travel Research, based in Hendersonville, Tenn.
-- February 28, 2006

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Out With the New, In With the Newer

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Out With the New, In With the Newer

At Peter Cooper Village and Stuyvesant Town, big rent hikes take the new breed of tenants by surprise.

• By S.Jhoanna Robledo

W hen Stuyvesant Town and Peter Cooper Village went free-market in 2002, the move shook the culture of those developments hard. Built by Metropolitan Life in the forties, these well-kept, no-frills complexes east of Gramercy Park contained thousands of middle-class apartments (and an endless waiting list to get in). When MetLife decided to make some money and started charging full fare four years ago, the new residents were more transient and wealthier than most everyone else in the place, and the friction changed its cozy, insular nature. But now the old folks may have the last laugh-as the furiously rising rental market drives out those interlopers as promptly as they arrived, with (in some cases) a 25 percent rent hike this year alone.

Eric L. was one of those newcomers. He quit Chelsea last April in favor of Peter Cooper Village, where he found an apartment larger and cheaper-at $2,250-than his $2,600-a-month box. In exchange, he gave up the doorman and prime location. "It's been fine," says Eric. "I was willing to cut out the extras to save money. It was a cost-benefit analysis."

He'll have to run the numbers once again. Driven by all the bursting-bubble talk, buyers are waiting and renting, says Jay M. Heydt, managing director of Citi Habitats' Union Square office. So "as of January 2006, there's a less than one percent vacancy rate for rentals," he says, adding that there's no tighter market than downtown-putting Peter Cooper Village at the improbable center of a boom. If Eric L. wants to stay put, he'll have to pay 25 percent more: $2,800 a month, non-negotiable. Nor is he alone. The tenants-association Website teems with postings from sticker-shocked renters. "At first [I] thought it must be a mistake!" writes one. "Bon voyage, PCV!" huffs another.

Sophia Cicilioni, director of leasing for Peter Cooper Village and Stuyvesant Town, appears unfazed. In a written statement, she responds, "We have been astounded by the consistent demand for our newly renovated apartments . . . When amenities, apartment size and finishes are considered, the rental rates are very reasonable." Heydt, for his part, notes that a 25 percent rent hike is steeper than usual and that "landlords usually . . . raise rents only by a little bit" to keep good tenants. But right now, turnover means money, and Heydt cautions anyone who decides to leave to steel himself. "Can they find something else? Absolutely!" he declares. "But it's a landlord's market."

Movers
Kicking Around Wall Street
Soccer star and former Olympian Claudio Reyna has joined the likes of Naomi Campbell and Margherita Missoni, signing up for the decadently upscale Cipriani lifestyle. Reyna is based in England-he plays the rest of the year for Manchester City, sort of the Mets to Manchester United's Yankees-but he's also logging time in the U.S., as the leader of the American World Cup team. So he and his equally sporty wife, Danielle (a former soccer pro herself), have bought a one-bedroom for an undisclosed amount at the ultraluxe downtown development. (Sources say one-bedrooms start at $1.4 million.) "They were looking for a pied-�-terre, and the building comes furnished with everything, from sheets to flat-screen TVs," says their broker, Sabrina Kleier. "And since he's busy, he doesn't have to worry about setting up." Reyna should expect some friendly ribbing from his landlord, Giuseppe Cipriani, in June, when he leads the U.S. team against Italy in a much-anticipated World Cup match.

Triple Assessment
120 Riverside Boulevard, Apartment 3N
935-square-foot, one-bedroom, one-bath condo.
Asking Price: $1.12 million.
Charges and Taxes: $1,029.
Broker: Eric Benaim and Michael Arcos, Nest Seekers International.
The owner of this never-occupied condo in the newest Trump tower is a flipper looking for a sweet return on his investment. He's fairly firm on the price and even turned down an offer at $1.06 million, says Benaim. Should he have taken it?

Lynn Sullivan, Coldwell Banker Hunt Kennedy: Sullivan was impressed with the kitchen. "All the finishes are beautiful!" she exclaims. "And it's bigger than the ones in the older buildings." But the view's problematic: "A buyer would really take issue if you say it's a river view. It's the highway."
Her assessment: $1.05 million.

Fran Kaback, Bellmarc: "Prices have been going up with each new Trump building [in the area]. But the market has cooled down a bit," points out Kaback. Still, "it's got name recognition, and everything's brand-new."
Her assessment: $975,000.

Amelia S. Gewirtz, Halstead: "It's definitely a more streamlined, Zen approach to design compared to the other Trump Place buildings, which have a hyper-Vegas feel," says Gewirtz, adding, "Buyers whom I've sold to [in this complex] never want to leave. They love the service."
Her assessment: $1.025 million (but, because of the view, it'll probably sell for $975,000).

Find this article at: http://www.newyorkmetro.com/realestate/realestatecolumn/16100

Multiple Condo Ownership Could Be New Trend

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Multiple Condo Ownership Could Be New Trend

ANDREW ASHBY | The Daily News
 

CONDOMINIUMS EVERYWHERE: The Lofts at South Bluffs is one of the newer condominium conversions Downtown. A company called City Dreams is working toward helping multiple investors buy part of a single condo. -- Photograph courtesy of Henry Turley Co.

While multiple people investing in a single condominium might not be the hot trend Downtown right now, a local couple is working to change that.

Ray and Ruth Werfelmann are forming City Dreams, a company that will help several buyers invest in a single condo in the Downtown area. With that in mind, they have placed an advertisement in the March issue of Memphis Downtowner magazine.

The Werfelmanns, who own rental properties in Horseshoe Lake, Ark., want to create a pied-�-terre, which is French for "foot to the ground" and is a common term used in the New York City residential market for a temporary or secondary residence. This differs from a time share in that investors actually own part of the property instead of just some time in it.

Floating a balloon

When it finds a group of investors, City Dreams will set up the condo as a limited liability corporation and then sell shares.

"It would be no different than, say, opening a restaurant and selling shares to people who believe in the restaurant's viability and profit," Ray said.

Ray will handle all the contracts and present them as a package to investors. However, he said he's looking for a particular type of investor.

"I don't want to push anyone away, but I don't need people who aren't interested in doing this and cooperating," he said. "It is a shared property and you have to find the right people to put together."

One of the reasons he's placing an ad is to see what people are looking for in a shared condo.

"With the (ad), we're basically finding out if the market is there," Ray said. "If that's the case, we can move rather quickly and would probably want to."

Maybe, maybe not

"We want people who want a toehold in Memphis without all the costs. You're either a one-ninth or a one-twelfth owner in a piece of real estate that will go up in value. Your share will go up in price as the unit goes up in price."

- Ray Werfelmann

A local rental property owner who wantsto find multiple investors for a Downtown condominium

Cindy James, a real estate agent for Henry Turley Co., lists condos for The Lofts at the Ballpark next to AutoZone Park, but hasn't heard of too many instances in which multiple investors have bought into a single condo in the Downtown market.

"I've seen hints of it, but that's it," she said. "It's not something that's prevalent in Memphis yet."

James pointed out that the Downtown condo market is still young.

"The different trends that go with the condo market will come along," she said.

Mike Parker, who also works for Henry Turley, sells condos at The Lofts at South Bluffs. He said he hasn't seen this trend in his particular building.

"I can't say I've heard it catch on in Memphis, but I'm sure we'll probably get more and more people doing it soon," he said. "We already have a lot of people from out east who use places as a weekend hideaway, where they can come down and watch Grizzlies games or go to AutoZone Park or whatever else."

Part and parcel

The Werfelmanns initially are looking for groups of nine or 12 people for their first condo venture. With nine investors, each person would get six weeks in the condo per year, with three weeks in the summer and three in the winter. With 12 investors, each person would get a month.

The first year, the condo's schedule would be set on a rotating basis. After that, the owners could set up a board and decide how to manage it.

"We want people who want a toehold in Memphis without all the costs," Ray said. "You're either a one-ninth or a one-twelfth owner in a piece of real estate that will go up in value. Your share will go up in price as the unit goes up in price."

One advantage could be that the costs on a condo are defrayed, with homeowner association fees and other costs spread among several investors.

Another potential advantage is flexibility, with investors able to do whatever they want with their portion.

"There are all different kinds of plans with shared properties," Ray said. "There are many ways you can set this up to make it viable for interested parties, for people who want to have a part of Downtown Memphis."

The potential is there

Tracie Gaia, a Realtor with the Garland Co., handles many condo sales. While she hasn't sold a single condo to more than one buyer, she once had two sets of parents with children in medical school buy a small Downtown house together.

"They said, 'We're going to be paying rent anyway, we might as well buy an investment,'" Gaia said.

That was before the Downtown condo market exploded, but Gaia said she doesn't see why it wouldn't work now.

"With the growth of Downtown, I think it's a wise decision," she said. "You've got condos out there, and it makes complete sense."

Carol Lott, a Realtor with RE/MAX on the River, hasn't yet seen multiple investors in a single condo.

"I think we're ahead of our time for a time-sharing development," she said. "I think you see time shares more in places like Colorado, where people want to ski not just for a weekend, but for more than one week out of the year."

Lott said that even though the condo market is growing fast, prices are still excellent.

"So I don't think people have to go in as a group to purchase a unit that I think they can easily buy as a second home, which is what we're seeing a lot of down here," she said.

Commentary: British tycoon plans boutique hotel next to Boca Resort

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Commentary: British tycoon plans boutique hotel next to Boca Resort

By Alexandra Clough

Palm Beach Post Staff Columnist

Sunday, February 26, 2006

A new hotel soon could be going up in the shadow of the landmark Boca Raton Resort and Club.

British property tycoon Cyril Dennis plans to build a 118-room boutique hotel at the northeast corner of Camino Real and Federal Highway in downtown Boca, according to Jorge Camejo, Boca Raton's development services director.

The hotel will be part of a complex of shops and condos that one observer said will be "like Rodeo Drive," a reference to the upscale shopping thoroughfare in Beverly Hills.

The project, tentatively dubbed Via Mizner, will include walkways, a piazza and lots of open space. The idea is to create an elegant southern gateway to the city.

Dennis' move is more evidence that nearly any property has potential for developers wanting to build enclaves for the rich. Just last week, WCI Communities Inc. and the city of West Palm Beach confirmed plans to bring a luxuryhotel and condosto West Palm by knocking down the city's current city hall complex.

The Dennis project, parts of which will rise nine stories, will require bulldozing office and bank buildings on Federal Highway. But the hassle must be worth it. The tract is next to the Boca Raton Resort and has coveted golf course views. Not surprisingly, some 192 condos are planned along the course, according to plans filed with the city.

Dennis, who owns an apartment in Boca Raton, is worth an estimated $200 million and is regularly listed as one of Britain's wealthiest sons. (Dennis was out of the country last week and couldn't be reached for comment.)

Camejo said Dennis' project will bring much-needed hotel rooms to the city. That's especially true now that the Bridge Hotel will be turned into condos by its new owner, Billden Boca Bridge LLC.

.

Word is that builder Dan Catalfumo is leading a group of investors willing to make a new pitch to Briny Breezes, the mobile home park with the coveted oceanfront address.

Briny's original suitor, Ocean Land Investments, just withdrew its offer to buy the town after hearing Brinyites might want to see who else is out there.

It's a risky move when you consider the unlikely scenario of anyone else topping Ocean Land's eye-popping $500 million offer. But Catalfumo reportedly plans to sweeten the deal by increasing the price and including Briny residents in the design of the town's redo.

Sources say Catalfumo and his investors, among them former protege Randall Greene, are quietly working to assemble more investors. (Neither Catalfumo nor Greene would talk about their hush-hush deal.)

In Catalfumo's favor: He has inside knowledge of the Ocean Land deal, having been a silent partner in the group that Ocean Land assembled for its bid.

.

It's hard to have a Boca address and not have a Boca "look."

So in what could be the most expensive face-lift ever to take place within city limits, The Blackstone Group will spend $20 million to upgrade its prized asset, the T-Rex Corporate Center.

The objective: Make more money by charging higher office rents.

The land around T-Rex recently was in the spotlight as Boca city leaders tried to steer The Scripps Research Institute there. County commissioners ended up picking Jupiter's Abacoa as Scripps' HQ.

But T-Rex's buildings still have a lot to offer businesses. The property is the birthplace of IBM's personal computer. Now it's home to many established and growing companies. And 250,000 square feet remain available for lease.

Cosmetically, though, T-Rex looks dated. "The conference center still has IBM finishes on it. It needs a freshening up," said Jeff Kelly, a CB Richard Ellis broker who handles leasing at T-Rex.

A name change to include the word "Boca" and oust the dinosaur monikeris planned. (T-Rex isn't named for an ancient carnivore, by the way. It stands for telecom routing exchange, the business of the prior owners.)

.

You would think developers building condos in West Palm Beach would take a breather from this crazed real estate market. But as we mentioned above, no building is off-limits for developers who think they can make money by building more condos. For example:

.Kolter Property Co. is working on a deal to buy Palm Beach Motorcars at Dixie Highway and Okeechobee Boulevard. Kolter just wrapped up One City Plaza and now is building the 467-unit Two City Plaza across the street. Kolter rep Mary Kay Willson confirmed the deal but said it isn't yet final.

.Merco Group of Miami in December paid Good Samaritan Medical Center $3.5 million for an office building on Palm Beach Lakes Boulevard. Plans are to build a 100-unit luxury condo sometime in the future. Merco is already building Palladio Terrace on Flagler Drive in West Palm Beach.

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Where next for global real estate?

With International Property Week rolling in Dubai, this is an opportune moment to consider what is happening in global real estate. Is this the time to buy or the moment to wait for a better opportunity?

Tuesday, February 21 - 2006

With US dollar interest rates up in the past year, and seemingly heading higher, international real estate markets are gradually slowing down.

But real estate is not like the stock market, up one day and down the next. Instead this sector is more like an oil tanker, which takes a long time to stop and some time to get going again.

The danger for investors is that real estate can appear calm while beneath the surface the tide is turning. Particularly at the top of a market there is no end of tempting projects and indeed, an abundant supply of property may be the first sign that things are not looking so bright.

Slow property sales

Hence the longer selling times for properties in the US and some UK locations over the past year tell a meaningful story. There are fewer buyers around and more sellers, and thus price rises have ground to a halt and even a few bargain distressed sales have been noted.

A Spanish real estate agent on CNBC Europe this week pointed to 2% rental yields in Spain as a solid indication that this was not a market for buy-to-let investors, and was only suitable if you wanted to move to Spain to live in a property for a long time. Indeed, the squeeze on rental yields around the world should surely be a warning to investors.

Rental yields are the property equivalent of price-to-earnings ratios for companies. So if you buy on a 2% yield this means that it will take 50 years of current rental income to pay for the property. Given that interest rates are rising and that a US bank deposit account will pay more than double this amount, this hardly appears a very good deal.

Wild overvaluation

Surely this kind of rental yield suggests the property is wildly overvalued, and that there is a severe risk of capital depreciation. For the only justification for buying on such a low yield would be that either rents were about to go up, or house prices would actually rise further.

What has happened in global real estate is that a long period of low interest rates has gradually allowed prices to rise way beyond anything sensible in comparison to rental yields.

This is a dangerous position for investors, and if global inflation picks up and interest rates rise further then real estate is going to suffer a big squeeze in capital values. This looks in fact to be what has happened and what will happen. Quite obviously with rental yields at these levels there is not much room for further growth in house prices, and a huge margin for a downshift.

Thus bricks-and-mortar is arguably the most risky global asset class in which to invest at the moment, unless you have a very special opportunity or intend to live in a house for a long-time on a mortgage and can ride out the peaks and troughs.

� 1996-2006 by AME Info FZ LLC. All rights reserved.
This story was posted by  staff reporter  Tuesday, February 21 - 2006 at 14:46 UAE local time (GMT+4)

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Sunset Harbor condo bid sprouts to 21 stories

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February 23, 2006

Sunset Harbor condo bid sprouts to 21 stories

By CINDY F. CRAWFORD
Staff Writer

DAYTONA BEACH -- The riverfront property under the Seabreeze Bridge was an abandoned restaurant and dock just a few years ago.

Today, the old Marker 32 is a posh yacht club called Sunset Harbor -- and plans for an adjoining condominium are growing with the area's profile.

At the time the club was built, owners received city approval to build a nine-story, 28-unit structure. But now that construction along the city's once quiet riverfront has started to boom, Sunset Harbor developers are seeking a 21-story, 116-unit condo. The Planning Board is expected to vote tonight on the rezoning request. The City Commission has the final say.

"We want to improve and create an even prettier waterfront view," said Hugh Upton, Sunset Harbor developer.

Located at the north end of the Downtown-Ballough Redevelopment Area, the $100 million condo with three floors of parking and up to 200 boat slips would fulfill several city goals. It would be a residential "bookend" at the edge of downtown, supplying customers for the local businesses. And it would be in an area where officials prefer to place the tallest riverfront buildings -- at the base of bridges, said Steve Spraker, planning manager for the city.

"This project would bring a substantial (tax) increment to the Ballough Road redevelopment district that could be used for roads and parks," Spraker said. The condo, with units worth $750,000 to $1 million, is expected to generate $125 million in property taxes.

Since opening the yacht club convention center and restaurant in 2004, Upton said it's been interesting to see Ballough Road blossom into a thriving riverfront district.

"I like the fact that we started the ball rolling by spending a lot of money here to build the yacht club and we're finally seeing what the area could look like," Upton said. "We're fortunate and pleased to be able to be the first in line of a number of developments going in here."

To the club's north, the 20- to 25-story condo Terra Mark is planned in place of Smokey Yunick's racing garage and the former Park's Seafood Restaurant. North of that, over the Holly Hill line, is an even bigger project, Marina Grande, which will have four 25-story towers and nearly 1,000 units. South of Sunset Harbor, two 22-story condos called Beach Street Condos have been approved.

Upton also has plans to build a four-story residential and retail project across the street from the yacht club, where the tennis court and parking lot sit, but has put the idea on hold for now.

Buyers angered as developer misses 3 deadlines at idle condo site in Boca

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Buyers angered as developer misses 3 deadlines at idle condo site in Boca

By Paul Owers
South Florida Sun-Sentinel

February 23, 2006

Jackie Badome has four bedrooms, three bathrooms and two grown children. She doesn't need a big house anymore.

So in 2004 Badome agreed to pay $360,000 for a two-bedroom condominium at Eden, a former apartment complex on Palmetto Park Road and Southwest Fourth Avenue in Boca Raton. She put down 10 percent in cash for the condo that was supposed to be ready in March 2005.

But the developer, West Palm Beach-based Ceebraid-Signal Corp., didn't deliver, blaming a busy hurricane season for the delay. Ceebraid missed at least two more deadlines and now promises Badome can move in by September -- except that construction on the job site stopped months ago.

This is an example of the struggles area developers face as the once-hot housing market slows down.

Increasing costs of materials are leaving builders in the lurch, and lenders are becoming more restrictive as the condo market tightens.

"It's pretty disappointing," Badome, 51, said Wednesday. "You make life plans based on where you're going to live, and this puts everything on hold. I'm sure I'm not the only one in this position."

Badome, a real estate agent for Nestler-Poletto Realty in Boca Raton, is one of an estimated 200 prospective owners at Eden wondering when, or if, the condo conversion will be finished. Would-be buyers also are questioning the future of another Ceebraid project, Bocara, also in Boca.

Ceebraid is facing construction liens and lawsuits, but Adam Schlesinger, a company vice president, insists that Ceebraid will resolve those and finish both Eden and Bocara.

"We're very sincere and empathize with the buyers," Schlesinger said. "But all we can do is work through these issues and deliver the project at the end of the day.

"Unfortunately, in this case, it's been a very long day."

A Ceebraid affiliate, Ceebraid Acquisition Corp., filed for Chapter 11 bankruptcy reorganization Feb. 10 in West Palm Beach. The filing is related to another of Ceebraid's properties, Holiday Isle Resort in Islamorada, Schlesinger said.

Back at Eden, prospective buyers and real estate agents are fed up.

"This may be a house of cards," said Anthony Cutaia, broker-owner of Cutaia Realty Advisors. The Boca Raton real estate firm filed suit against Ceebraid, alleging the company failed to pay commissions for units sold at Eden.

Ceebraid says it has more than 40 years in the industry, converting about 25,000 residential units throughout the eastern United States. It bought the Brazilian Court in Palm Beach and is turning it into a condo-hotel. Ceebraid also announced similar plans for the GulfStream Hotel in Lake Worth and owns other properties in Palm Beach Gardens, Pembroke Pines and Miami Beach.

Schlesinger said Ceebraid had to refinance the loan for Eden and expects to resume construction and begin completing sales in the next month. He acknowledged rising construction costs but said the company will honor the sales contracts.

"We're going to make sure we deliver," Schlesinger said. "We're not going anywhere."

As prices and interest rates rise and speculators leave the housing market, demand for condos is waning, said Jack McCabe, a Deerfield Beach real estate analyst.

Condo conversions were especially hot during the past few years, but those deals have slowed as well, McCabe said.

"It's a complete opposite of the feeding-frenzy attitude just last year," he said.

Joe Bova, an executive vice president for Fidelity Federal Bank & Trust in West Palm Beach, said federal regulators want lenders to be more careful in 2006.

"The market is definitely softening; there's no question about that," Bova said. "If there are 30,000 units coming . and only 15,000 units will be consumed, what's going to happen to the other 15,000?"

Myra Rubenstein, a Boca Raton real estate agent, agreed to buy two condos at Eden as an investment and also has a client waiting to buy.

Rubenstein, 70, said she and other agents are upset because Ceebraid's delays jeopardize their credibility with clients. As a result, she's shying away from preconstruction deals.

"It's put a bad taste in my mouth," Rubenstein said. "Why don't they finish what they start?"

Developer Zaps $150M Luxury Condominium Project in Miami

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Developer Zaps $150M Luxury Condominium Project in Miami February 17, 2006 By Hortense Leon, Southeast Correspondent The 1390 Brickell Bay condominium tower, which was planned for a one-acre site near Miami's posh Brickell Avenue, has joined a growing list of doomed luxury projects. The 49-story, 364-unit development has become a casualty of a faltering market, characterized by stiff competition, ever higher construction costs, a shortage of labor and materials and the new-found thriftiness of lenders. In addition, the developer succumbed to the wrath of mother nature, which inflicted several hurricanes on South Florida last summer and fall. Kenneth Baboun, president of the BBB Group, originally estimated the project, which was 90 percent sold out, to cost $90 million. According to reports, however, that figure rose more than $150 million. Baboun has notified buyers that he was returning their deposits plus interest. Inexperience of the developer is another contributing factor to the failure of some condominium projects today, Michael Cannon, managing director of the South Florida office of Integra Realty Resources, told CPN this afternoon. Baboun is the 25-year son of Jose Baboun, who is a member of a family-run, residential and commercial development firm in Mexico. "Lenders and equity investors are very nervous unless a developer has a large profit margin and an experienced team," Cannon said. Also, regulators are instructing lenders to diversify their lending activities away from a preponderance of large loans to condominium developers, he said. The 1390 Brickell Bay project (rendering pictured) was conceived in January 2004, but the building was redesigned in the spring 2005, Schwartz said. Although ground-breaking was scheduled for last summer and the previous four-story building on the site was demolished, "We never began construction," he said. The developer was in talks with several lenders, but never was approved for a construction loan. Schwartz said that he did not know the amount of the loan the developer was seeking, nor the total losses which were sustained in trying to get the tower off the ground. The developer had hired two heavy hitters for the 1390 Brickell Bay project--Bernard Zyscovich, a Miami architect, and Fortune International, a Brickell Avenue real estate broker to do the sales and marketing

Home-Selling Strategies For a Softening Market

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Home-Selling Strategies
For a Softening Market

By Terri Cullen
From The Wall Street Journal Online

A record 72 metropolitan regions saw double-digit year-over-year increases in existing single-family home prices in the fourth quarter, while only six areas saw prices drop, the National Association of Realtors reported Wednesday. It noted, however, that the overall pace of growth cooled slightly in the quarter, as the number of homes on the market began to rise.
-- February 22, 2006

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Housing affordability slips for fourth consecutive quarter

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Housing affordability slips for fourth consecutive quarter

Los Angeles area is rated least affordable

Thursday, February 23, 2006

Inman News

Indianapolis was the most affordable housing market in the fourth quarter, with homes selling at a median price of $120,000 and households earning a median income of $64,000.

Nationwide housing affordability slipped for a fourth consecutive quarter to its lowest level yet, according to the National Association of Home Builders'/Wells Fargo Housing Opportunity Index released today.

"The latest HOI shows that only 41 percent of new and existing homes that were sold during the final quarter of 2005 were affordable to families earning the national median income," said David Pressly, a home builder from Statesville, N.C.

That index level is down from 43.2 percent of homes sold in the third quarter and 52 percent of homes sold in fourth-quarter 2004.

The least affordable market rated by the index was Los Angeles-Long Beach-Glendale, Calif., where 2.3 percent of homes sold in the fourth quarter were affordable to families earning the area's median household income of $54,500, according to the index.

The median price of all homes sold in that area was an even $500,000. The bottom of the affordability scale was dominated, as usual, by California cities, including Santa Ana-Anaheim-Irvine, San Diego-Carlsbad-San Marcos, and Stockton. New York-White Plains-Wayne, N.Y.-N.J. rounded out the list of the five least affordable major housing markets.

Among cities smaller than 500,000 people, Merced, Calif., was lowest on the list and the second least affordable market overall. Other small cities in the unaffordable column included Modesto, Salinas, Santa Barbara-Santa Maria, and Santa Cruz-Watsonville, Calif.

Pressly stated that the housing affordability situation should improve, as mortgage rates are expected to peak later this year and home-price appreciation is expected to decelerate from the record rates of the last several years. "This will give incomes a chance to catch up."

He added, "Between the third and fourth quarters of last year, the national weighted interest rate on fixed- and adjustable-rate mortgages that we use in calculating the HOI rose from 5.84 percent to 6.21 percent, and this certainly increased the threshold for families seeking home ownership," said NAHB Chief Economist David Seiders. "Meanwhile, nationwide home prices were on a strong upward trajectory through 2005."

NAHB forecasts predict that the average rate on a 30-year, fixed-rate mortgage will inch up gradually to about 6.6 percent late in 2006 and average about 6.5 percent for the year as a whole.

In the nation's most affordable major housing market of Indianapolis, Ind., 88.7 percent of new and existing homes that were sold in the fourth quarter were affordable to households earning the area's median income of $64,000. The median sales price of all Indianapolis homes sold in that time frame was $120,000. Also near the top of the list for affordable major metros were Youngstown-Warren-Boardman, Ohio-Pa., followed by Detroit-Litonia-Dearborn, Mich.; Grand Rapids-Wyoming, Mich.; and Dayton, Ohio, in that order.

Midwestern metros also dominated the list of the most affordable small housing markets with fewer than 500,000 people. Davenport-Moline-Rock Island, Iowa-Ill. was tops, followed by the metro areas of Cumberland, Md.-W.V.; Lima, Ohio; Mansfield, Ohio; and Lansing-East Lansing, Mich.

The index is a measure of the percentage of homes sold in a given area that are affordable to families earning that area's median income during a specific quarter.

The index incorporates newly revised U.S. Housing and Urban Development Department data for household income, which was previously underestimated in some markets, and revised property tax and insurance data in several metro markets, the trade group announced.

Prices of new and existing homes sold are collected from actual court records by First American Real Estate Solutions, a marketing company. Mortgage financing conditions incorporate interest rates on fixed-rate and adjustable-rate loans reported by the Federal Housing Finance Board.

The association's Web site, www.nahb.org/hoi offers more tables, historic data and details.

The National Association of Home Builders has about 225,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction.

Investment Interest Deduction Remains Alive and Well

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Investment Interest Deduction
Remains Alive and Well

By Jennifer Openshaw
From Marketwatch

Since 2000, Congress and the Bush administration have moved mountains to create more tax breaks for investors. Most people are aware of new lower tax rates on long-term capital gains and qualified dividends. But buried on Line 13 of Schedule A is a mystery deduction called investment interest. It's easier to use than you think.

A deduction for interest? You know that most mortgage interest is deductible. But you probably thought everything else like interest on credit cards, car financing and other personal loans went away in 1986.

-- February 23, 2006

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U.K. Home Prices Set Records

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U.K. Home Prices Set Records

 

MBA (2/23/2006) Sorohan, Mike

The U.S. is not the only place with a hot residential real estate market. Separate reports released this month pushed the average price of a single-family home in the United Kingdom past the $350,000 mark for the first time.

The U.K. Building Societies Association reported that lenders closed a record �23.03billion ($40.19 billion) in single-family loans as the average price of a single-family home rose by nearly 5 percent last year, to more than �200,000 ($349,000). And U.K. real estate Web site Rightmove reported that its February survey of buyer/seller activity found that the average asking price was �201,600 ($353,000) up by 2.7 percent from January.

The reports reflect a remarkable turnaround for the U.K. market, which as recently as 2004 was being talked about in terms of "heading for a crash" following a decade of steady house price inflation. At a U.K. BSA conference in October 2004, Roger Bootle of Capital Economics, London, predicted that U.K. housing prices would drop by as much as 20 percent over the next few years. However, while some areas did show house price declines in 2005, the overall market grew between 3 percent and 5 percent.

While that is good news for sellers, it's problematic for buyers, proving that housing affordability is an issue on both sides of the Atlantic. According to the U.K. BSA, average household income has not equaled home price appreciation, which has affected potential home buyers at all levels.

"First-time buyers drive the market. But second-time buyers, such as newly married couples and young families, are now struggling as well because prices have risen so much," the BSA's Rachel Blackmore told the U.K. Sun.

Despite this, Rightmove said high buyer demand and low inventory drove home prices. The average price of a single-family home rose by �5,281 ($9,205) from January to February, the largest monthly increase since April 2004, while the average time on the market per home fell from 94 days to 81 days. Miles Shipside, commercial director with Rightmove, said competitively priced properties in areas of limited supply are "flying off the shelves," often selling as soon as the come on the market.

"The market's picked up quickly this year. As a result, properties are selling more quickly and stock levels are declining," Shipside said. "House prices have stormed through the �200,000 barrier to record levels several months earlier than the market anticipated."

For the first time in 11 months, all property types saw prices rising in virtually every region of England and Wales, Rightmove said. The largest increases came at the lower end of the market, driven by growing demand for terraces and flats (condos/apartments). Agents report increasing numbers of first-time buyers, partly assisted by parental help with deposits as well as more flexible lending criteria, Rightmove said.

Not surprisingly, the London area has the most expensive single-family real estate, with an average home price of �296,712 ($517,000).

"Buyers are back, particularly at the lower end of the market," Shipside said. "We believe this will lead to further sales as successful sellers move up the property ladder. However, sellers must not get too ambitious or the recovery could run out of steam as affordability is over-stretched again."

Banks in real estate development carries heavy risk

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Banks in real estate development carries heavy risk Perspective: Savings and Loan crisis provides history lesson Thursday, February 23, 2006 By Marcie Geffner

Marcie Geffner Commercial real estate development is neither an appropriate nor a necessary business activity for the nation's banking institutions. Yet federal regulators have allowed two major banks to invest in such projects, despite the considerable inherent risks and the troubling historical precedent of the savings-and-loan crisis, in which hundreds of financial institutions failed largely as a result of unwise real estate developments. These regulators should be compelled to reverse their erroneous decisions and not allow these banks to go forward with these activities. The Office of the Comptroller of the Currency, an arm of the Bush administration that regulates federally chartered banks, has given Bank of America and PNC Financial Services Group permission to invest in two major real estate development projects that they contend are part and parcel of their banking business activities. PNC will invest $122 million in a mixed-use project near its headquarters in Pittsburgh, Pa., that will include a 30-story office building, a 150-room hotel and 32 condominiums, the later of which will be sold to make the project pencil out. The bank also expects to tap public financing and tax incentives to make the project work, according to a local newspaper report. Bank of America plans to develop and own a 15-story, 150-room luxury hotel as part of its headquarters complex in Charlotte, N.C. The bank expects to utilize approximately 37 percent of the hotel rooms for its own business-related guest stays each year. Banks are permitted to engage in real estate development projects that are necessary to accommodate the needs of their banking businesses. However, as the National Association of Realtors contended in a letter to U.S. Treasury Secretary John W. Snow, these projects expand the scope of national banks' development activities in a manner that seems inconsistent with a number of existing federal banking laws and regulations. The OCC's decision to permit a couple of banks to build in their own backyards and, to some extent, for their own needs, might seem innocuous. But these activities aren't truly necessary for these banks and since the necessity is questionable, there's no sound reason for OCC to start down this path. Since two banks today could become dozens of banks tomorrow it would be better for the OCC to draw a hard line against such activities now rather than risk the possibility of potentially costly consequences later. It was only 17 years ago that Congress was forced to create the Resolution Trust Corp., which sold off the assets, primarily real estate, of some 750 savings-and-loan associations that had overextended themselves into risky investments. During its seven-year lifespan from 1989 until 1995, the agency cost taxpayers $116 billion, according to one FDIC study. It's not unreasonable to suggest that a rebirth of the Resolution Trust Corp. could be cards if the OCC and the banks continue along this proverbial slippery slope. As NAR correctly argued to Snow: "The OCC's course of action poses a significant threat to the safety and soundness of the entire banking system, financial markets and the U.S. economy. The savings-and-loan scandal of the 1980s and the sluggish Japanese economy, where banks are intertwined with real estate and commercial enterprises, are dramatic examples of the negative consequences of mixing banking and commerce. We do not want to repeat past mistakes, and we should learn from the mistakes of others." The association's argument may be less sound, however, when it comes to the OCC's decision to allow Union Bank of California to own 70 percent of a wind energy project, an investment NAR has cited as another instance of a banking institution's involvement in real estate development. Yet the bank, perhaps rightly, contends that this activity is not a real estate development, but rather an investment to generate federal tax credits. NAR's effectiveness as an advocate may be diluted by the inclusion of this project, which seems not to fit the argument. Further, NAR is perhaps not the ideal challenger to set against the banks on this issue since the Realtors association has fought a longstanding grudge match against the banks over their desire to compete directly with NAR's members in the real estate brokerage business. Yet a biased challenger is far better than no challenger at all, and NAR is to be commended for its pursuit of the matter thus far. Regardless of one's position on the question of whether banks should be permitted to enter the real estate brokerage business, the idea of banks going into real estate developments such as those that Bank of America and PNC have announced should cause considerable alarm. The Realtors group rightly points out that such activities "increase banks' exposure to risk and threaten the safety and soundness" of the banking system.

Three Cents Worth: Listing Inventory Gets In The Red Zone

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Three Cents Worth: Listing Inventory Gets In The Red Zone

Wednesday, February 22, 2006, by Joshua

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[This week, graphist Jonathan Miller plots the change in listing inventory (red line) against the change in median sales price (blue line) in Manhattan over the last five years. The highlighted zones represent periods of rising inventory. Click on the image to expand.]

Manhattan real estate is all about change, so I thought it would be cool to plot the change in median sales price and listing inventory over the past 5 years (that's as far back as I can go for historical inventory).

Since I am still suffering from post-Superbowl traumatic stress syndrome and wanted to ease my pain because Olympic curling was not cutting it, I decided to zero in on significant periods of rising inventory. These "rising inventory zones" are highlighted in red (okay, pink) and marked by the now-infamous "Curbed Arrows." [Technically, Curbed arrows are red. -ed.]

After the jump, a few observations that jumped out.

Listing Inventory: The change in listing inventory is far more volatile than change in median sales price than one would think, given the tight levels of inventory we have seen over the past 5 years. The red zones show periods of 31%, 62% and 52% increases in inventory levels. I also found it interesting that a sharp rise in inventory did not occur at the same time each year, making the argument that inventory changes were not predictable based on just seasonality alone.

Median Sales Price: The change in median sales price has showed a steady upward rate of annual appreciation for the past 4 years, exceeding 20% in 4 of the past 5 quarters (with the exception at 18%). While in the red zone, the rate of annual price appreciation either eases or levels off but appreciation still occurred.

Going forward, I would guess that inventory will continue to rise over the next few months as listings enter the spring market and then eases as the number of sales increases.

Whopper Condo Conversion in Greenwich: Two Big Apartments Sold for $223M

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Whopper Condo Conversion in Greenwich: Two Big Apartments Sold for $223M
February 22, 2006
By Paul Miller, News Editor

CPN learned last night that Antares Investment Partners has picked up two of the last remaining rental properties in Greenwich, Conn., for $223 million, and plans to convert them to condominiums, according to a source very familiar with the deal.

The source told CPN last night that the deal may be the largest real estate acquisition in Connecticut history. The Greenwich-based Antares Investment Partners got the inside track on the hotly contested, aging buildings, and won out in a bidding war for the properties sold by an affiliate of Mill Management Group.

The two complexes, the 266-unit Putnam Green I-III located at the juncture of Post Road and Western Junior Highway and the 130-unit Weaver's Hill located off of Weaver Street in the Glenville section of Greenwich, make up more than half of the Greenwich's remaining rental apartments. They will be converted to luxury condominiums priced between $1 million and $2 million-plus.

Antares is essentially eliminating the rental market in Greenwich. "There wasn't a large supply of rentals," the source said. Antares, which is spending more than $125 million to restore the properties and add such amenities as health clubs, swimming pools and tennis courts. In addition, the exteriors will get new roofs, windows, patios and facades, as well as extensive new landscaping. In addition, the interiors will get a drastic overhaul, including new state-of-the-art kitchens and baths, hardwood floors and doors, and extensive wall and molding treatments.

But money can't buy Antares peace and harmony in a wealthy town like Greenwich, which is known to challenge many a commercial real estate venture. "It's going to be a challenge for Antares from a public relations standpoint," the source said, "to win over existing tenants to purchase the units. It will also be a challenge to not have the general public look down on Antares as the evil landlords, even if it is trying to improve the community."

According to the source, Antares won out in the bidding not because it placed the highest bid, but because it is locally based. "Some institutional players came in with higher bids," the source said. "The owner has owned and managed this property for a long time and is very sensitive to the well-being of the tenants, some of whom have lived there for 30 years. It really wanted a local developer."

Staging Advice from the NY Times and Sacramento Bee

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February 21, 2006

Staging Advice from the NY Times and Sacramento Bee

I ran across a blog post from Damon Darlin NY Times  from the about home staging. He basically highlights the key points from an article in the Sacramento Bee which discusses the subject. These general tips are a good starting point for anyone who is considering selling their home. For more in depth tips, contact your local Realtor.

Here are the tips:

Don't skip a single room: "Which rooms wouldn't you want to sell?" says Schwarz.

Create curb appeal: "People make a decision within 10 seconds (of seeing a house from the outside) on whether they're interested," Norris says. Tasks might include power washing sidewalks or pruning trees and bushes, especially if they hide the house.

Get it "Q-tip clean:" That means cleaning around toilets, faucets, the refrigerator handle and light switches. Sellers "don't see it because they've lived there - it becomes part of the environment," Schwarz says.

Rearrange: Situate furniture so it flows nicely and remove some if it makes the room feel crowded. Arrange it to emphasizes a main focal point, such as a fireplace or window view.

Nix the knickknacks: It's the little stuff that make a room seem smaller. "Clutter eats equity," says Schwarz.

Depersonalize: Put away family mementos and pictures. "We don't want them buying your family; we want them buying your space," Schwarz said.

Neutralize: Interior walls should be white, off-white or taupe. Color on walls make rooms appear smaller. There is one exception, Schwarz says: a tiny bathroom, where color can add pizzazz. Color works best in accents such as towels, area rugs and bed spreads.

Stage until the end: Don't let the house slip out of pristine condition while on the market or in escrow. In recent months more homes have fallen out of escrow because, among other reasons, more buyers have failed to qualify for financing.

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Why you'll pay more in rent this year

Rents were up last year and they're expected to continue rising. Who or what to blame depends on where you live. The culprits include rising home prices, condominium conversions -- even Hurricane Katrina.

By Melinda Fulmer

• Table: The most expensive U.S. cities for renters
• How much rent can I afford?
• Top deposit busters for renters

If rent money is harder to come by, blame it on the hottest rental market in five years. The average rent climbed to $940 in the fourth quarter of 2005, according to real estate data firm M/PF YieldStar. And this year, it's going to be even more expensive as rents recover from historically low levels.

"2006 should be the big price correction," for rents, said Greg Willett, vice president of research at Carrolton, Texas-based M/PF. "Everything is really underpriced in many markets around the U.S."

National apartment occupancy rose 1.6% to 95.2% in last year's fourth quarter, the highest point since the fall of 2001. Rising home costs, coupled with an increase in new job creation, is creating a bigger pool of renters, Willett said. But in many areas, the number of apartments is dwindling, as building has failed to keep pace.

"Real estate is out of control here," said Jess Callahan, a 29-year-old Ft. Lauderdale yoga instructor and single mother looking for a two-bedroom rental for $1,000 a month or less. "I've been looking on and off for six months."

The condo-conversion craze
At 99%, Ft. Lauderdale had the highest occupancy rate in the country in 2005's fourth quarter; its average rent climbed 11.6% to $1,104. It joins other cities like Chicago, San Diego, New York, Las Vegas and Miami, where a significant number of apartments are being converted to condominiums.

Last year, condo conversions exceeded apartment construction for the first time in recent history, according to the M/PF report.

Not surprising, five of the nation's tightest apartment markets last year were in Florida, where the condo boom was in full swing. Renters in Ft. Lauderdale say it's virtually impossible to find an apartment in a decent neighborhood unless you're willing to live in converted garage apartment, or pay thousands in rent.

Kim Miller, an interior design assistant who is looking for a one-bedroom in nearby Hollywood. Fla., said, "If you don't have $900 or more a month, it's pointless to even look" in Ft. Lauderdale.

Apartment occupancy in West Palm Beach, Orlando and Miami also came in above 97%, as more apartments were taken off the market in the fourth quarter. With only 400 new units under construction, rents shot up in these areas 12.6%, 7.9% and 6.3% respectively.

Building constraints = pricy rents
The three priciest rental markets were in some of the tightest markets with the biggest hurdles for new construction: New York City, San Francisco and Los Angeles. (To see a list of the 58 most expensive cities for renters, click here.)

Los Angeles was the nation's fifth-tightest rental market with an average occupancy rate of 97.8%, had an average rent of $1,421 in the fourth quarter, according to M/PF, in part because it takes developers as many as eight years to get a project built here.

Rents moved even higher in San Francisco, where 96.4% of the apartments surveyed were occupied at an average rent of $1,573. The highest rents were in New York City, which was 97.1% occupied at the end of last year, with an average rent of $2,400, according to real estate data firm, Reis Client Services. (MPF does not track New York City.)

Other cities where M/PF's Willett expects to see big jumps in occupancy and rent this year include Austin, Texas; Las Vegas, Nev.; and Phoenix, Ariz, where apartment construction was lapped by demand. Jobs in these cities are growing at a fast pace and home prices are rising quickly, making the limited stock of apartments more appealing.

"The fact that home prices have climbed so much has widened that gap (between renting and owning) again," Willett said. "This is the most optimistic I've seen (landlords) in a long time."

The Katrina effect
Renters in Houston can thank Hurricane Katrina for boosting their rents. Due in part to the influx of evacuees last fall, Houston's apartment occupancy rate jumped almost 5% to 94%, and rents climbed 3% to an average of $692. Atlanta, Dallas, Birmingham Ala., and Nashville, Tenn. also reported gains as relocations from Katrina began setting down roots.

A recent survey by the National Multi-Housing Council of large apartment owners showed that 42% had seen "modest" improvement in leasing as these new residents moved from hotels to apartments. While some of these new apartment residents could return home in the next year, analysts believe many will remain in their new homes.

"Probably somewhere around half of the people who spread out to new locations will end up staying in those locations," Willett said.

Want lower rent? Move to Cincinnati
Rents aren't rising everywhere. Apartment landlords in Cincinnati, Ohio; Raleigh and Greensboro, N.C.; have been forced to lower rents as the job picture remains stagnant. And analysts are expecting further job cuts in Detroit, Pittsburgh and Atlanta, which may allow renters to call their own shots.

Still, economists say, the recovery in most of the nation's rental market has been fairly quick, and should last for the next couple of years.

"Three years ago, rents were going down," all over, said Mark Obrinsky, chief economist with the National Multi-Housing Council in Washington D.C. "Now rents are going up higher than the rate of inflation." And that, Obrinsky said, should spur some developers to begin building again.

In the meantime, however, property managers such as Dan Murphy of San Diego's 1,410-unit La Mirage apartment complex, know that they have the upper hand in negotiations and plan to hike prices.

"It's been very busy for us," Murphy said. "I'll probably up the rents a little bit each month.

Faced with such rising rents, Ft. Lauderdale renter Callahan said she'll just have to make do, either taking on a roommate, or getting a smaller place.

"I have three weeks to come up with something," she said. "I'll just have to settle for something I might not want, until I can find something I do want," she said.

Condo king out to trump Donald

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Condo king out to trump Donald
LIFESTYLE
Las Vegas's latest colossus will be a slice of Barcelona: that's the vision of a larger-than-life developer with movie star mates. Julie Earle-Levine reports

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18feb06

JORGE Perez's excitement is palpable when he is talking about his Las Vegas project Las Ramblas. It's a colossal Barcelona-inspired $4 billion hotel condo and casino complex he is building with the actor George Clooney.

Unlike Clooney, Perez -- who speaks animatedly, hands outstretched to show just how big this project is -- is not a household name in America. Yet.

Perez is the largest residential condominium developer in the country, a Miami version of New York real estate developer Donald Trump without the bad hair and aggressive self-promotional skills.

In Miami, Perez has already built 55,000 units and his $13 billion Related Group has plans to build another 15,000 units in South Florida and Las Vegas in the next four years. Atlanta is another target.

It is a lofty ambition to build a "first" anything in Vegas, a city that is thought to have seen it all and where a new hotel or condo tower seems to be built every other day (even Donald's ex-wife Ivana Trump is building her own 82-storey luxury residential building called Ivana Las Vegas). But Perez believes his Las Ramblas project really will be unique.

In an interview in his headquarters in Miami, Perez, 56, who was born in Argentina to Cuban parents, outlined his vision for Las Ramblas, and shared his passion for building and fast cars.

Las Ramblas, just off The Strip, will spread across 11 hectares and feature 11 towers, including a five-star hotel, condos and bungalows -- that's more than 4000 units in total -- a spa and health club, nightlife, dining, shopping and, of course, a casino.

It will also have an open-air pedestrian promenade modeled after Las Ramblas in Barcelona, even though this is glitzy Vegas and residents may well be dodging drunk tourists armed with super-size, brightly coloured cocktails in plastic cups.

The project is due to be completed early 2008.

Perez has based the project on his favourite city, Barcelona.

"Sitting in a cafe having tapas, seeing the trees, flower shops and bookstores in Barcelona is a wonderful experience we are going to recreate," he says.

To do this, he's bringing together his dream list of architects, designers and entertainers including ubiquitous designer Philippe Starck on the interiors, and architect Keith Hobbs of United Designers Europe.

George Clooney and Rande Gerber (the nightclub owner better known as Cindy Crawford's husband) are involved.

Clooney is also talking to his friend Brad Pitt about "designing" for the project.

Both superstars famously love Vegas, and then of course there was the movie, Ocean's Eleven, where Clooney and Pitt, aka Dapper Danny Ocean and Pitt as a card ace, staged an elaborate heist at Las Vegas's Bellagio casino.

Perez says Clooney and Gerber will be "extensively involved in multiple aspects" of Las Ramblas, which is due to start construction in mid-2006.

More specifically, as investors and residence owners, they will contribute to the design and direction of the project, including the hotel, restaurants and entertainment and "the look and feel of the casino".

Clooney has said the project will be a "first class experience, with a five star hotel, the coolest bars and clubs and an exceptional spa", reflecting his personal taste and interests. "We're clearly putting more than just our names to this project."

Perez says he is negotiating with an up-market brand for the hotel, and is pushing forward with reservations.

Perez is hoping the project will create the kind of frenzy he is used to seeing in Miami.

While the market has recently cooled in that city, Perez recalls buyers were scrambling to buy and "flip" (resell) properties.

Some of Related's 1000 unit condos in Miami sold out within 36 hours of being announced.

On talk of the real estate bubble in Miami, Perez says he is certain there will be a short-term correction, and that development is peaking.

"It is red hot. There is a crane on every corner."

But he is confident strong local and international demand will create another boom. "I think Latin Americans continue to see Miami as their capital, and I can't think of another city in America that is better poised for growth."

He has seen strong interest in Apogee, his latest high-end project with 66 of 67 units sold, mostly to domestic buyers. Their average price is $5.3 million.

Miami's potential is greater than Las Vegas, New York and Atlanta, some of the other favourite cities for developers to be in, he says.

In New York, Related developed the Time Warner Centre, and also developed and owns the W Union Square and the Mandarin Oriental.

Atlanta is another growth spot where Related is looking to make its mark. "We have a piece of land and are trying to zone it into a great urban city, building around 4000 apartments and bringing in great restaurants, architecture and design."

But it's not all about buildings for Perez, who started out as building affordable housing in Florida. He set up Related with New York developer Steve Ross in 1979, and last year, Related had $4.3 billion in revenue.

"What really makes me tick is not just building a building, but changing a city," he says. Can he really change Vegas? "Las Ramblas is all about getting away from the glitz, The Strip and the casinos, and creating a more elegant environment."

He sees visitors strolling a tree-lined promenade, ice cream cone in hand, dropping into Gucci and other luxury retail shops and dining at up-market restaurants and cafes.

Perez does love the high life and owns a 2002 Ferrari 360 Modena Spider and a 2002 Mercedes S500 AMG, but his favorite car is much like him -- a low-key, fast-moving and nimble yellow Mini Cooper convertible.

Perez is swiftly and aggressively changing America's skyline, city by city.

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February 17, 2006

Flamingo under contract to go condo

Susan Stabley

Part of 'The Bird' is about to be bought. MCZ/Centrum Developers, a Chicago-based condo conversion joint venture, is hammering out a contract to buy part of the Flamingo South Beach, a well-known 1,688-unit rental complex on 16 acres along Biscayne Bay.

A deal to buy one of the three towers in the apartment complex, at 1500 Bay Road, may close by Monday, confirmed Jennifer Arons, MCZ/Centrum's vice president of sales and marketing.

The two other buildings may eventually be purchased, as well, she said, but declined further comment.

Denver-based seller AIMCO decided to put the Miami Beach apartment buildings on the market last summer.

Through affiliate company Morton Towers Apartments LP, AIMCO (NYSE: AIV) had offered to sell the Flamingo's three towers and other improvements, but keep the land through a simultaneous 99-year land lease.

MCZ/Centrum Developers has converted at least six apartment buildings in South Florida. The most recent is the Sian, a multi-phase conversion that includes transforming the Ambassador Resort in Hollywood Beach into a condo-hotel.

Other projects have been Parc Central East in Aventura, formerly part of The Bay Club; The Tides and The Wave on Hollywood Beach; The Wave and Cit� near the Miami Performing Arts Center.

Because of the different ages of the towers and size of the units, estimating a sales price for the Flamingo is complicated. The Miami Beach complex was first built in 1960; the newest tower was constructed in 2001, county records show.

AIMCO rehabilitated the two older towers and built the third.

The CB Richard Ellis team selling the Flamingo comprises Executive Vice Presidents Jay Massirman and Sean Cunningham, First Vice President Robert Given and Senior Associate Gerard Yetming.

Led by Massirman, the brokers are projecting more than $3.5 billion in multi-family property sales this year, with 90 percent of those buildings slated for conversion.

In 2005, CB Richard Ellis' South Florida Multi-Housing Group sold 57 multi-family properties - more than 19,900 units. About $2.7 billion in sales and financings were closed, plus $1.1 billion put under contract. That breaks their 2004 record of $2.6 billion sold or contracted.

Of the deals last year, 48 were condo conversions, more than double the number from the prior year. CB Richard Ellis said nearly 98 percent of all activity last year resulted in turning rental apartments into condos.

The Miami firm cited research that 57,240 units have been pulled from the area's rental pool since 2002.

Haft, CFO, USCONDEX

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James Haft, CFO, USCONDEX

New Yorker and Strat-O-Matic online baseball game champion James Haft combined his knowledge of real estate, high tech, and finance to help found the online condo brokerage USCondex.com.

By Eric Chabrow,  InformationWeek
Feb. 20, 2006
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=180204046

Photograph by Sacha Lecca

James Haft
CFO, USCondex
Interview by Eric Chabrow

1

Unconventional Wisdom This CFO takes a unique approach to his work. "I use intuition with an understanding of statistics. If you're too focused on the actual numbers themselves, many times you can miss the big picture."

2

Game Boy "Almost everything you need to learn for business and for life--things like problem solving and planning--are skills you can pick up from video games."

3

Taxi! Living in New York has taught Haft valuable lessons. Here's one: "The trick to getting a cab on a rainy day is to walk against traffic. If you stand still, the person in front of you will get that cab. It's born into the DNA of all Manhattanites."

4

Meet George Jetson "It's really cool to live in the future. Digitally walking around with a video iPod, sitting in an airplane watching 'The Office' while flying down to Florida to commute to my business. That's the Jetsons."

5

Lend Him Your Ear Audio is the killer app, Haft says. "I can show you a thousand images at a time on a Web page, and I have no idea what you're focusing on. But once I put a voice-over on it, I know exactly what you're listening to, and I know l have your attention."

2006 Real Estate Capital Markets Industry Outlook

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2006 Real Estate Capital Markets Industry Outlook

Top Ten Issues

The U.S. economy is expanding, now at a slower rate, and investments are on the increase again. The economy appears poised for continued positive growth in 2006. Interest rates remain relatively low and, contrary to conventional wisdom, are not increasing as quickly as expected, creating the famous "conundrum" in the economy. Yet a number of concerns remain on the horizon, especially with the budget and trade deficits; selected residential "bubbles;" post hurricane Katrina, Rita and Wilma impacts; along with the Iraqi war. Given the past few decades and the cyclical nature of the real estate industry, insiders often pay attention to certain critical issues to determine whether the upward trend will continue, a downward fall is eminent, or if there may be a "soft landing" with minimal impact. Industry professionals often gain insight into where the market is headed by paying attention to these critical issues. The first two critical issues for 2006 include the following: 1. Economy Growing Steadily, But Slowing. Although the economic outlook has slowed from its highs in 2004,the economy remains relatively healthy with consistently low interest rates and the dollar is attempting to stabilize and possibly continue to improve. Looking toward 2006 and beyond, a number of troubling trends (e.g., the expanding twin U.S. budget and trade deficits) could potentially derail the economy. That said, how will these trends affect the economy and industry, and how strong will 2006 be? 2. Fundamentals Turn the Corner. For the first time in more than three years, most commercial real estate market fundamentals are recovering, with declining vacancy rates and stabilizing rents in many property categories. No place is this more evident than the office and hospitality sectors. If economic growth continues, property fundamentals should continue to improve modestly in 2006. Even if value increases plateau, the increase in property fundamentals could mean that the real estate market has outgrown its former boom-and-bust character; however, the length of time it takes for these fundamentals to trickle down to other areas such as property rents and profitability could affect the overall outlook. Read the attached report for research findings and predictions on all ten issues in the Real Estate Capital Markets industry. Dennis Yeskey, national director of Real Estate Capital Markets practice, shares his thoughts on the topic. Read the interview.

Last Updated: January 19, 2006

Source: Deloitte & Touche USA LLP - United States (English)

Home Starts Bloomed in January; Less-Rosy Days Are Seen Ahead

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Home Starts Bloomed in January;
Less-Rosy Days Are Seen Ahead

By Christopher Conkey
From The Wall Street Journal Online

Home builders broke ground at the fastest pace in more than three decades last month, as unusually warm weather trumped signs of a weakening market.

The Commerce Department said housing starts surged 14.5% last month from December to an annual rate of 2.28 million units. Housing starts were up 4% from a year earlier. Permits for new residential buildings rose 6.8% in January from December levels.

Many economists expected a rebound in housing starts after an 8.9% decline in December, but few said they expected such a strong surge. Mild weather in many parts of the country last month -- also a factor underpinning strong retail sales and employment growth in the period -- was cited widely as the main factor behind the surge. Many analysts predict a slowdown in the housing market in coming months.

-- February 21, 2006

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