New Development Added – PARAMOUNT Miami Worldcenter

An exciPARAMOUNT Miami Worldcenterting new development going up in the Miami skyline. Dubbed a “city within a city”, the impressive new PARAMOUNT Miami Worldcenter tower is a truly exceptional property.

“A signature residential tower that rises above what will be the ultimate shopping, dining and entertainment destination in Miami. It is above and beyond, when it is a PARAMOUNT.

PARAMOUNT Miami Worldcenter

Designed to maximize your experience and views, this 700-foot tower reaches far into the Miami skyline so that the world can admire your address, and your views are without boundaries. PARAMOUNT Miami Worldcenter is truly exceptional with a private pool deck, park, tennis courts and even indoor regulation soccer field on the Upper Deck of the mall (now called your backyard).

PARAMOUNT Miami Worldcenter

But move to the rooftop of your residential tower and you will discover the Skyview Deck and Lounge. An even more exclusive residential lounge and plunge pool oasis that was designed like a super yacht and guarantees all residents get to live in the penthouse. As you get to know this great tower, you will hear things like “outdoor living rooms” or “perfected kitchens”. What you really need to know is that your life, style and desires are one when entrusted to this address that could only be called PARAMOUNT.”

For more information, visit the PARAMOUNT Miami Worldcenter page on my website.

Fort Lauderdale to Consider 456 Residential Units Downtown

The Las Olas Co. has proposed building 456 residential units in two buildings along Federal Highway in downtown Fort Lauderdale, but the site would likely be sold to another developer.

The city’s Development Review Committee will meet on Oct. 25 to consider the site plan for the projects at 116 and 200 S. Federal Highway. The applicant is Las Olas Co., a longtime local developer led by President Michael Weymouth that has owned the land for more than three decades. A spokesperson for the company said the real estate would be sold to another developer for the projects.

The application lists the builder of the project as Orlando-based apartment developer ZOM USA. An official at ZOM USA couldn’t immediately be reached for comment. It was designed by architect CallisonRTKL with Architectural Alliance Landscape.

The overall project would be called Las Olas Walk. It would be north of Las Olas Boulevard, home to many restaurants, retailers, office buildings and residential towers.

The larger building would have 329 residential units at the northeast corner of Federal Highway and Southeast 2nd Street, where Las Olas Co. owns about 2.09 acres. The furniture store built in 1950 would be demolished. The new 8-story building would total 385,076 square feet, including 319,342 square feet of residential. It would include a pool on the ground floor.

The 1.38-acre site at the southeast corner of Federal Highway and Southeast 2nd Street would have 127 residential units and a 656-space parking garage. The 8-story building would total 342,567 square feet, with 128,721 square feet of that dedicated to residential space. The units would range from efficiency sized to three bedrooms. There would be an amenity terrace on the top floor. Residential units line the perimeter of the garage to improve its appearance from the street level.

Source: South Florida Business Journal

Scaled Back Galleria Mall Re-design Project Still Large at $750 Million

Keystone-Florida Property Holding Corp. has further scaled back its redevelopment plans for the Galleria mall in Fort Lauderdale, but it would still be a large project valued at more than $750 million.

On Oct. 19, the city’s Planning and Zoning Board will consider the application for Live Galleria, a rezoning of the 35-acre site at 2414 E. Sunrise Blvd. The new buildings would be built on the surface parking lots around the existing mall.

The developer has proposed 1,250 residential units, 47,251 square feet of new retail space, 18,700 square feet of new restaurants, 12,362 square feet of community event facilities and eight acres of open community space. The developer would build parking garages to replace the surface lots, leading to 1,360 new spaces.

By comparison, the original Galleria redevelopment plan had 1,640 residential units, a hotel, significantly more retail space, and office space. The revamped proposal has no hotel or offices.

The tallest building in the new proposal would be 285 feet. It would have seven new buildings, with all of them containing some residential, including three towers, built in three phases.

The designers of the Live Galleria are Adache Group Architects, TBG Partners, and Perkins + Will. The developers are represented by attorney Stephen Tillbrook of GrayRobinson and Courtney Crush of Crush Law.

“We have listened carefully to the community’s input and have revised the original redevelopment plan for Live Galleria several times accordingly,” said Peter Flotz, managing member of FLL Development Enterprise, one of the developers. “In its current form, the proposed plan will deliver an innovative, walkable, environmentally-friendly and interactive community which will transform the existing Galleria mall and be an asset to Fort Lauderdale.”

Many traditional malls around the country have been exploring ways to maximize their real estate as retailers deal with competition from online retailers and more entertainment-oriented destinations.

Live Galleria could generate more retail traffic by building residential on the property. It also aims to invite the public in with more pedestrian space, such as a linear park looping around the property, outdoor fitness equipment, a yoga area, a dog park, two welcome plazas, and a rooftop garden.

Keystone would also fund $24.1 million in multi-modal improvements to deal with traffic, such as redesigned streets, improved signal timing, turn lane enhancements, better pedestrian paths, new bicycle parking stations, and new bus shelters.

Once the three-phase project is completed in 2015, it would generate 476 a.m.trips and 697 p.m. trips, according to the developer’s traffic study.

Source: South Florida Business Journal

Homeowners Regain Equity in 2nd Quarter 2016

CoreLogic released a new analysis showing 548,000 U.S. homeowners regained equity in Q2 2016 compared to the previous quarter, increasing the percentage of homes with positive equity to 92.9 percent of all mortgaged properties, or approximately 47.2 million homes.

Nationwide, home equity grew year-over-year by $646 billion, representing an increase of 9.9 percent in Q2 2016 compared with Q2 2015.

2016 Year-Over-Year change in negative equity, by state.

2016 Year-Over-Year change in negative equity, by state.

In Q2 2016, the total number of mortgaged residential properties with negative equity stood at 3.6 million, or 7.1 percent of all homes with a mortgage. This is a decrease of 13.2 percent quarter over quarter from 4.2 million homes, or 8.2 percent, in Q1 2016 and a decrease of 19 percent year over year from 4.5 million homes, or 8.9 percent, compared with Q2 2015.

Negative equity, often referred to as “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or a combination of both.

For homes in negative equity status, the national aggregate value of negative equity was $284 billion at the end of Q2 2016, decreasing approximately $20.4 billion, or 6.7 percent, from $305 billion in Q1 2016. On a year-over-year basis, the value of negative equity declined overall from $314 billion in Q2 2015, representing a decrease of 9.5 percent in 12 months.

Average amount of negative equity

Average amount of negative equity for 10 largest Core Business Statistical Area (CBSA)

Of the more than 50 million homes with a mortgage, approximately 8.6 million, or 17 percent, have less than 20 percent equity (referred to as under-equitied) and approximately 965,000, or 1.9 percent, have less than 5 percent equity (referred to as near-negative equity).

Borrowers who are under-equitied may have a difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of shifting into negative equity if home prices fall.

“Home-value gains have played a large part in restoring home equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index,” said Anand Nallathambi, president and CEO of CoreLogic. “Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

Highlights as of Q2 2016:

  • Nevada had the highest percentage of mortgaged properties in negative equity at 15.3 percent, followed by Florida (14 percent), Maryland (11.8 percent), Illinois (11.7 percent) and Arizona (11.6 percent). These top five states combined accounted for 33.7 percent of negative equity in the U.S., but only 18.6 percent of outstanding mortgages.
  • Texas had the highest percentage of homes with positive equity at 98.3 percent, followed by Alaska (98 percent), Colorado (97.8 percent), Hawaii (97.7 percent) and Utah (97.6 percent).
  • Of the 10 largest metropolitan areas by population, Miami-Miami Beach-Kendall, FL had the highest percentage of mortgaged properties in negative equity at 18.4 percent, followed by Las Vegas-Henderson-Paradise, NV (17.6 percent), Chicago-Naperville-Arlington Heights, IL (13.4 percent), Washington-Arlington-Alexandria, DC-VA-MD-WV (9.9 percent) and New York-Jersey City-White Plains, NY-NJ (5.9 percent).
  • Of the same 10 largest metropolitan areas, San Francisco-Redwood City-South San Francisco, CA had the highest percentage of mortgaged properties in a positive equity position at 99.4 percent, followed by Denver-Aurora-Lakewood, CO (98.5 percent), Houston-The Woodlands-Sugar Land, TX (98.4 percent), Los Angeles-Long Beach-Glendale, CA (96.7 percent) and Boston, MA (95 percent).
  • Of the total $284 billion in negative equity, first liens without home equity loans accounted for $159 billion aggregate negative equity, while first liens with home equity loans accounted for $125 billion.
  • Among underwater borrowers, approximately 2.2 million hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $252,000, and the average underwater amount is $73,000.
  • Approximately 1.4 million of all underwater borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $314,000, and the average underwater amount is $88,000.
  • The bulk of positive equity for mortgaged residential properties is concentrated at the high end of the housing market. For example, 96 percent of homes valued at $200,000 or more have equity compared with 89 percent of homes valued at less than $200,000.
  • Q1 2016 data was revised. Revisions with public records data are standard and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.

Source: CoreLogic

New Home Sales Numbers Are In: July SOARS to 8 Year High

A recent new home sales report for July showed that sales of newly built homes increased 12.4 percent since June, and rose 31.3 percent year-over-year. This surge marks the highest point in almost eight years.

“New homes are being purchased at a furious pace, and it could give the housing market the added push it’s been waiting for,” says Quicken Loans vice president Bill Banfield. “With more new homes purchased by move-up buyers, it provides an increase in housing choice for first time buyers looking for their starter house.”

Data released found that the new home sales seasonally adjusted annualized rate for July was 654,000, the highest pace of sales since October 2007. Actual new homes sold so far this year are up 13 percent over the first seven months of 2015. This July’s new home supply remains tight at 4.3 months of supply.

The median sales price of new houses sold in July 2016 was $294,600; the average sales price was $355,800. The seasonally adjusted estimate of new houses for sale at the end of July was 233,000. This represents a supply of 4.3 months at the current sales rate.

“It’s great to see evidence of much-needed growth and a shift toward more affordable prices in July’s report,” says realtor.com Chief Economist Jonathan Smoke. “It’s also good news that we are finally seeing builders shifting toward more affordable price points. And given the limited number of homes currently for sale, we can be confident that the decline in new home prices is a result of market shift and not discounting by builders.”

Source: RISMedia

Florida Realtors Assoc. Releases 2Q Wrap Up Data

ORLANDO, Fla. – Aug. 10, 2016 – Florida’s housing market reported more new listings, higher median prices and fewer days to a sales contract during the second quarter of 2016, according to the latest housing data released by Florida Realtors®. Closed sales of single-family homes statewide totaled 76,748 in 2Q 2016, up 1.4 percent over the 2Q 2015 figure.

“In the second quarter of 2016, Florida continued to add new jobs, which attracts new residents, encourages economic growth and strengthens the housing market,” says 2016 Florida Realtors President Matey H. Veissi. “Traditional housing sales increased statewide over the three-month period, while sales of distressed properties continued to decline. In another positive sign, new listings for single-family homes over the three-month-period rose 2.9 percent year-over-year, while new condo-townhouse listings rose 3.3 percent.”

The statewide median sales price for single-family existing homes in 2Q 2016 was $220,000, up 10 percent from the same time a year ago, according to data from Florida Realtors research department in partnership with local Realtor boards/associations. The statewide median price for condo-townhouse properties during the quarter was $163,000, up 5.2 percent over the year-ago figure. The median is the midpoint; half the homes sold for more, half for less.

Looking at Florida’s condo-townhouse market, statewide closed sales totaled 31,699 during 2Q 2016, down 2.7 percent compared to 2Q 2015. The closed sales data reflected fewer short sales – and rising traditional sales – over the three-month period: Short sales for condo-townhouse properties declined 42.2 percent while short sales for single-family homes dropped 36.7 percent. Meanwhile, traditional sales for condo-townhouse units rose 6.9 percent and traditional sales for single-family homes increased 14.4 percent year-over-year. Closed sales typically occur 30 to 90 days after sales contracts are written.

“Existing home sale prices throughout most of Florida’s metro areas are continuing to exhibit robust year-over-year growth,” says Florida Realtors Chief Economist Dr. Brad O’Connor. “This growth is attributable to simple economics, which is to say that demand is strong and supply is currently limited. The inventory of homes for sale at the more affordable end of the price spectrum – which includes the vast majority of distressed properties – continues to decline significantly, and new construction has not come close to making up the difference.”

In 2Q 2016, the median time to a contract (the midpoint of the number of days it took for a property to receive a sales contract during that time) was 42 days for single-family homes and 50 days for condo-townhouse properties.

Inventory was at a 4.3-months’ supply in the second quarter for single-family homes and at a 6-months’ supply for condo-townhouse properties, according to Florida Realtors.

According to Freddie Mac, the interest rate for a 30-year fixed-rate mortgage averaged 3.59 percent for 2Q 2016, significantly lower than the 3.96 percent average recorded during the same quarter a year earlier.

Source: Florida Realtors

Top Buyers of U.S. Real Estate are Chinese for 4th Year

Chinese buyers were the top foreign purchasers of U.S. real estate for the fourth year in a row, a survey released Wednesday showed.

The National Association of Realtors reported that Chinese buyers bought 29,195 properties worth $27.3 billion in the 12 months ending March 2016. At a median price of $542,084, the typical Chinese purchase was more than double the median U.S. existing-home price of $223,058, showing that the acquisitions were made by the burgeoning Chinese elite.

Chinese purchases were more than triple that of the number-two nation, Canada, which had $8.9 billion of U.S. properties. India ranked third with $6.1 billion of purchases, and Mexico fourth at $4.8 billion.

That said, foreign purchases of U.S. real estate actually declined slightly, by 1.3% to $102.6 billion of residential property. The NAR said that decline came due to a stronger U.S. dollar and a weak global economy, as well as rising U.S. house prices.

Even the Chinese purchases fell, by 4.5%.

Lawrence Yun, chief economist of the NAR, said British purchases may subside after the vote to leave the European Union, which has sent the pound GBPUSD, -0.9906% down sharply. Britain accounted for $5.5 billion worth of purchases in this survey, ranking fifth-highest.

Latin Americans, Europeans and Canadians mostly sought properties in Florida and Arizona. California and New York drew the most Asian buyers, the NAR said.

Source: Marketwatch

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FED: Vulnerable Commercial RE Sector May Take Hits

The Federal Reserve warned that prices in the commercial real-estate market may have run up too far too fast.

Valuations in commercial real estate “appear increasingly vulnerable to negative shocks, as CRE prices have continued to outpace rental income,” the Fed said in its semiannual Monetary Policy Report to Congress. The Fed noted that prices exceed their pre-crisis peaks by some measures.

The Fed included a special section on financial stability risks in the report, which accompanies Chair Janet Yellen’s testimony. The report said that even given “moderate’’ financial vulnerabilities, risks of external shocks, such as the U.K.’s possible exit from the European Union, pose stability risks.
The report also highlighted issues related to credit exposures to the energy sector, money-market mutual funds and stock valuations.

The central bank said price-to-earnings ratios on a forward-looking basis for stocks have increased to a level “well above” their median for the past 30 years.

“Although equity valuations do not appear to be rich relative to Treasury yields, equity prices are vulnerable to rises in term premiums to more normal levels, especially if a reversion was not motivated by positive news about economic growth,” the Fed said.

The Fed said “some structural vulnerabilities are expected to persist” in money-market mutual funds even after Securities and Exchange Commission reforms go fully into effect in October.
“Leverage for the non-financial corporate sector has stayed elevated and indicators of corporate credit quality, though still solid overall, continued to show signs of deterioration for lower-rated firms, especially in the energy sector,” the Fed said in its report.

Strong U.S. bank capital positions contributed to the resilience of the financial system, the Fed said.

Source: Bloomberg

Sumitomo Re-enters Boldly the Miami Market with $220M Icon

The U.S. arm of Japanese trade conglomerate Sumitomo Corp. recently paid $220 million for the iconic Miami Tower office building.

The purchase marked one of Miami’s biggest investment deals so far this year, as well as a surprising display of optimism in the U.S. commercial real estate market from Sumitomo, which only has a handful of marquis properties stateside.

The company has a long history developing and investing in real estate, both within its home country Japan and abroad. Data from Real Capital Analytics shows the company has interests in 63 properties worldwide with an estimated value of $4.9 billion. Most of those properties are office buildings in large Japanese cities like Tokyo, though a smattering of development sites, retail and industrial buildings are also included.

Within the last decade, Sumitomo has acquired interest in $2.4 billion worth of property and sold another $2.3 billion, according to the data. For its real estate dealings in the U.S., however, Sumitomo seems to take a much more calculated approach. Before its purchase of Miami Tower, the company’s stateside office holdings included only two office towers, both occupying premium locations in their cities’ respective central business districts. Sumitomo owns the Class A office tower at 203 North LaSalle Street in Chicago, for which it paid $111.5 million in 2014, and the tower at 450 B Street in San Diego, which it acquired for $73 million in 2013.

This purchase smacks of Sumitomo’s previous and first foray into Miami back in 2008, when it made a splash in the office market with its $260 million purchase of the 34-story Miami Center building. Four years later, the company sold Miami Center to Crocker Partners for a mere $5.2 million more than what it paid.

As recently as a few years ago, “South Florida wasn’t viewed as a long-term investment; it was opportunistic,” Krasnow said. “Now, Miami is viewed from the capital perspective. It is much more of a strategic investment.

In the past year, institutional buyers like insurer Prudential Financial and TIAA have swallowed up large swaths of office product in suburban markets like Coral Gables and the business parks surrounding the Miami International Airport.

Though Sumitomo has been tight-lipped about its most recent acquisition of Miami Tower — sources say those involved in the sale are under confidentiality agreements — a statement from Robert Obringer, the company’s vice president, illustrates Sumitomo’s motivation for paying such a premium for a piece of Miami iconography.

As part of our constant management of assets, we are always looking for opportunities that will maximize return on investment, and this property offers a strong upside potential for in-place cash flow and the opportunity to increase value,” Obringer said in the statement.

Source: The Real Deal