Low Mortgage Rates: Time Is Running Out – Looming FED Rate Hikes

It’s time to reaffirm some advice. That’s because on Wednesday we heard from the ultimate authority on interest rates in the U.S.: the Federal Reserve.

Now, technically, the Fed does not set mortgage rates—but that’s probably what most people believe, given the amount of news and hype surrounding its decisions.

The way it really works: The Federal Reserve sets the short-term rate policy, which governs what banks charge one another for short-term loans. Short-term rates are different from long-term rates, but they typically move in similar ways in times of change.

Longer-term rates usually move before the Fed acts. Mortgage rates, in particular, usually track to long-term bond rates like the 10-year U.S. Treasury note. Since the surprise outcome of the presidential election, mortgage rates have risen close to 60 basis points—more than twice the quarter-point increase that the Fed did on Wednesday. (One basis point is 0.01%.)

Even before the election, evidence was stacking up that the economy was picking up momentum. Now the financial markets are betting that inflation will be higher under the Trump administration’s fiscal policies. But the data-driven Fed hasn’t seen the inflation evidence that would justify a greater increase in short-term rates yet.

Emphasis on “yet.”

If you want to understand how the Fed affects mortgage rates, pay more attention to what the central bank says about the future rather than the policy rate changes it has already enacted.

The Fed expects the economy to hit its target level of inflation next year. As a result, it also expects to raise short-term rates three times, by a total of 75 basis points. In reality, rate moves could be less—but they also could be more.

That means rates like we’ve seen for most of the past five years are indeed history.

Hate those annoying radio ads screaming about refinancing while rates are in the 3% range? Well, relax. They’re history, too.

Mortgage rates will move higher before the Fed acts again, so if the Fed carries out its three planned hikes in 2017, we could come close to 5% on 30-year conforming rates before the end of next year. This is more than I have been expecting even as recently as last month.  My, how quickly things have changed.

It’s time for a bit of harsh reality: The move toward 5% will not likely be smooth, gradual, or immediate. Instead, rates will likely jump in intervals, based on whatever new positive economic data emerge and also when we see actions from the new Trump administration on fiscal policy.

Since mortgage rates have already gone up more than the Fed’s increase, they will likely stay in this range for the next two months or so. That means we may see some day-to-day volatility but little consistent movement up from where rates ended on Wednesday (the average 30-year conforming rate was just under 4.2%).

But as the year progresses, rates are more likely to move. Mortgage rates are most likely to move in the month ahead of each key Fed policy meeting. The most important meetings are in March, June, September, and December—so home buyers, mark your calendars!

If you intend to buy this year and finance the purchase with a mortgage, acting sooner rather than later will cost you less.

On a typical median-price home with 20% down, the monthly principal and interest payment would be $978 at a rate of 4.2%. That same home at 4.5% would cost $35 more per month. If we reach 5%, that monthly payment goes up to $1,074, or almost $100 more per month than where it is now.

Source: Realtor.com

 

Florida Realtors Sees Positive Trends in Today’s Housing Market

WASHINGTON – Dec. 2, 2016 – What fall slowdown? In many markets across the country, the housing market is showing anything but the typical seasonal slowdown. In fact, a report released by the National Association of Realtors® (NAR) finds just the opposite.

Existing-home sales eclipsed June’s cyclical sales and, in October, zoomed to the highest annualized pace in nearly a decade, according to NAR. All major regions saw an increase in sales last month as well.

It’s a good time to be in the real estate business. And NAR says that Realtors have a lot to be thankful for this holiday season:

The Economy is Improving

In 2017, the economy is expected to continue growing, at least at a moderate pace, next year, and growth will lead to even lower unemployment, which can help boost consumer confidence. What’s more, a growth in jobs often translates into more households looking for homes.

Powerful Buying Forces Emerge

Two major demographic shifts at play in the current housing market could profoundly drive sales in the coming years: millennials and retiring baby boomers.

We are now in the midst of two massive demographic waves that will power above-average demand for homes for at least the next 10 years,” says Jonathan Smoke, realtor.com’s chief economist. The median age of a first-time buyer this year was 32, according to NAR’s 2016 Home Buyer and Seller Report. Next year, 4.4 million people in the U.S. will turn age 32.

Further, the nation’s second-largest generation, the boomers, is now moving into retirement. Americans age 65 to 74 are in a key age range where housing decisions are being made, which typically involve a home sale and a purchase. Over the next five years, the number of people in the U.S. over the age of 65 is expected to increase 18 percent as the population overall grows only 4 percent.

Foreclosures are Plummeting

The foreclosure inventory fell 31 percent in September and completed foreclosures dropped 7 percent year over year, according to data from CoreLogic. What’s more, the number of seriously delinquent mortgages (ones 90 days or more past due, including loans in foreclosure or REO) dropped by 25 percent in September year-to-year to the lowest level since August 2007.

Completed foreclosures have fallen by a total of more than 100,000 homes during the 12 months prior to September 2016, says Anand Nallathambi, president and CEO of CoreLogic. “The decline in foreclosures is one of the drivers in the drop in vacancies, which is positive for homeowners and communities. Heading into 2017 we see that prices, performance and production – the three most important drivers of the real estate market – are all improving.”

More New Homes are in the Pipeline

Housing starts rose 25.5 percent in October, reaching a seasonally adjusted annual rate of 1.3 million, the Commerce Department reported. It’s the highest pace since August 2007. Single-family housing starts reached a nine-year high in October, reaching a rate of 869,000.

These robust figures correlate with strong builder optimism in the housing market,” says Ed Brady, chairman of the National Association of Home Builders. ” A firming job market, a growing economy and rising household formations will keep the housing recovery on track into next year.”

Drones are Flying

Long-awaited guidelines were released in June that allow more real estate professionals to incorporate drones into their marketing, and they’re capturing aerial pictures and videos of properties to lure buyers.

The Federal Aviation Administration released its final rule on commercial drone use in June, though guidelines must be followed: Operators are required to obtain a Part 107 certificate, which replaced the previous Section 333 waiver. Operators also no longer are required to hold a pilot’s license. Still, operators must take a test before flying, and they must retake that test every 24 months in order to operate drones. Also, there are restrictions on the number of activities you can do with a drone (such as FAA prohibitions against flying a drone over a person or flying at night).

“Businesses are more and more finding opportunities to utilize drones as a way of cutting costs and better serving customers,” says Tom Salomone, NAR’s immediate past president. “That’s true in real estate and other industries as well. As application of this technology picks up, the regulatory landscape will likely continue to evolve.”

Source: Florida Realtors

 

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

August Scorches the Market Most in a Decade Says Realtor.com

A record-breaking summer for the residential real estate market continued in August, according to new monthly data on for-sale housing inventory and demand on Realtor.com®. Homes for sale on the site in August are moving two percent more quickly than last year as prices continue to reach new record highs.

“Summer 2017 was one of most competitive buying seasons that we have ever witnessed, fueled by historically low mortgage rates and inventory shortages that resulted in record-high prices, said Jonathan Smoke, chief economist for Realtor.com. “With the school year starting now in most of the country, we’re seeing some drop-off in demand, which may provide some relief for buyers weary from battling it out against other buyers all summer.”

The median age of for-sale listings on Realtor.com in August is expected to be 72 days, which indicates properties are selling two days faster than this time last year but four days slower than last month. In August most markets begin to slow down in response to the start of the school year, with inventory levels and market velocity moving away from peaks and sales beginning to decline.

The median home was listed for $250,000, eight percent higher than one year ago and virtually the same as last month. That extends this summer’s trend of record high prices and is a new peak for August.

For-sale housing inventory reached its apex last month and August now reflects the usual seasonal shift with the first monthly decline since January. Even with an estimated 475,000 new listings coming onto the market in August, the total inventory remains considerably lower than one year ago.

The median age of inventory in August is expected to be 72 days, down three percent from last year and up six percent from last month. The median listing price for August should reach a record high of $250,000, an eight percent increase year-over-year and flat compared to July.

The listing inventory in August should show a one percent decrease from July. Additionally, inventory should still show a decrease of eight percent year-over-year.

Realtor.com’s Hottest Markets received from 1.4 to 4.5 times the number of views per listing compared to the national average. In terms of supply, these markets saw inventory move from 21 to 39 days more quickly than the rest of the U.S. The hottest markets saw inventory movement slow down slightly as the median age increased by two days on average from July.

RDC_Hotness_Index_Aug

Key Takeaways from Realtor.com’s® August Hotness Index

California again dominated the list with 11 markets, but seven other states were represented (Texas, Colorado, Indiana, Ohio, Michigan, Washington and Tennessee).

  • Vallejo-Fairfield, Calif., continues its streak of 4 straight months atop the hottest markets.
  • The new entrants to the top 20 in August were Kennewick-Richland, Wash. and Waco, Texas.
  • The biggest gainer beyond the new entrants was Detroit, which moved up four spots and into the top ten.

Source: Realtor.com

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

May Report: Broward Prices Pick up the Pace

While much of South Florida’s housing market has struggled through a rough spring, May proved to be a bright spot for Broward County.

Sales for both homes and condos spiked year-over-year, all while inventory held mostly steady, according to a new report from the Greater Fort Lauderdale Realtors association. A total of 1,671 single-family homes were sold in May, up 9.5 percent from the 1,526 sales made during May 2015. Sales for townhomes and condos also jumped by 9.5 percent, from 1,434 closed deals a year ago to 1,570 this May.

Those spikes in numbers are also a considerable improvement from April, which saw the pace of home sales slow year-over-year in both Broward and South Florida in general.

Despite the recent market volatility, prices are still rising at a steady clip. The median price to pick up a Broward condo or townhouse hit $145,000 in May, which grew by $10,000 from a year ago. Median prices for a single-family home also rose by $22,000, from $290,000 per home to $312,000.

Meanwhile, sellers took a breather during May, with only a slight rise in inventory for both sectors compared to last year. Listing inventory for single-family homes stood at 2,177 in May, an increase of only 1.2 percent year-over-year, while condo inventory showed even less growth with a 0.2 percent bump to 2,113 listings.

Fewer properties hitting the market and a faster sales pace could be a sign that Broward’s housing market is tightening, though it’s too early to tell if that trend will continue through the year.

To the south, Miami-Dade County has been hammered by declining sales and a surplus of inventory as homeowners look to cash in on ever-rising prices. Some analysts have said this will likely lead to a correction in the market and sellers start adopting more realistic pricing.

Source: The Real Deal

A Tale of Two Cities: Broward County Steady, While Miami Struggles

The first half of 2016 has been a regular slugfest for Miami’s housing market, but the grass seems a bit greener for its neighbor to the north.

While sales in Miami-Dade continue their downward slope, Broward County saw a moderate uptick for both closed sales and prices during June, according to a new report from the Greater Fort Lauderdale Realtors association.

A total of 1,635 condos and townhomes were sold in Broward last month, marking a 4.4 percent jump in closed deals year-over-year. Single-family homes saw a slightly higher 4.8 percent jump in sales, coming out to 1,805 properties sold.

Although the numbers are by no means earth shattering, they’re a far cry from the market woes in Miami and Miami Beach. A second quarter report from brokerage Douglas Elliman showed sales fell as much as 24 percent, year-over-year in certain areas, signaling a market correction could be on its way.

Back in Broward, housing prices continued their steady rise during June. The median price for condos and townhouses hit $149,250 last month, spiking by 10.4 percent year-over-year. Single-family homes had a more moderate price increase of 7.3 percent, standing at a median of $325,000 in June.

And the inventory pile-up that’s slowing down Miami-Dade was nowhere to be seen in Broward. Active inventory for single-family homes fell 10 percent to 5,490 properties in June, while condos saw a slight inventory uptick of 1.8 percent to 8,641 units. The past 12 months have been a constant squeeze on single-family housing inventory, according to the association, while new condos entering the market are starting to level out year-over-year after a significant influx that started in February.

While both sectors of the market grew during June, the association’s figures show Broward’s true strength is in its single-family homes. Dollar volume for home sales hit $682 million in June, more than double that of condo’s $307.8 million. And for the past 12 months, year-over-year home sales haven’t fallen once — something Broward’s more volatile condo market can’t boast.

Source: The Real Deal

HUD Awards $46.5 Million to Tackle Lead in Homes

To protect children and families from the hazards of lead-based paint and other home health and safety hazards, the U.S. Department of Housing and Urban Development (HUD) recently awarded $46.5 million in grants to 15 local and state governments.

The grant funding will reduce the number of lead-poisoned children and protect families by targeting health hazards in over 3,100 low-income homes with significant lead and/or other home health and safety hazards. The Lead Hazard Reduction Demonstration grant program has a demonstrated history of success, filling critical needs in urban communities where no other resources exist to address substandard housing that threatens the health of the most vulnerable residents.

As HUD celebrates this June as the first ever National Healthy Homes Month, HUD Secretary Julián Castro is focused on helping children and families secure quality housing by protecting them from the hazards of lead-based paint and other home health and safety hazards.

As the leader in lead paint hazard control, HUD’s grant awards are one of our strongest efforts to prevent lead poisoning among children,” says HUD Secretary Julián Castro. “These awards will help clean up lead paint hazards in thousands of low-income homes across the nation, eliminating the sources of permanent health and behavioral problems that lead poisoning brings.

Unsafe and unhealthy homes affect the health of millions of people of all income levels, geographic areas, and walks of life in the U.S. These homes affect the economy directly, through increased use of health care services, and indirectly through lost wages and increased school days missed. Housing improvements help prevent injuries and illnesses, reduce associated health care and social services costs, reduce absentee rates for children in school and adults at work, and reduce stress, all which help to improve the quality of life.

HUD’s Office of Lead Hazard Control and Healthy Homes promotes local efforts to eliminate dangerous lead paint and other housing-related health and safety hazards from lower income homes, stimulates private sector investment in lead hazard control, supports cutting-edge research on methods for assessing and controlling housing-related health and safety hazards, and educates the public about the dangers of hazards in the home.

The funding announced directs critical funds to cities, counties and states to eliminate dangerous lead paint and other housing-related health hazards in thousands of privately-owned, low-income housing units. HUD is also providing these Lead Hazard Reduction Demonstration program grantees over $4.5 million in Healthy Homes supplemental funding to help these communities mitigate multiple health hazards in high risk housing simultaneously, in conjunction with their lead hazard control activities.

SOURCE: RISMedia

 

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