Is there a Commercial Real Estate Credit Crunch on the Way?

by Isaac Benmergui, Esq on May 4, 2016

 Is there a Commercial Real Estate Credit Crunch on the Way?Commercial real estate lenders will be more cautious in 2016, says Mark Myers, head commercial real estate business for Wells Fargo.

Myers spoke to Bloomberg in a telephone interview regarding the future of commercial real estate lending as the six-year recovery cycle shows signs of drawing to a close. A Federal Reserve survey had already indicated that major banks were tightening underwriting criteria for commercial real estate clients as early as late 2015, and now commercial mortgage-backed securities are more scarce as well, cutting off another avenue of financing for leveraged property owners. Problems in the commercial bond market led Bank of America to reduce their forecast of commercial mortgage-backed security issuance by 30 percent, to $55 million. Other firms have followed.

Currently, commercial real estate growth is following economic growth, says Myers, so any downturn in the economy will have an impact on commercial real estate. Some metro markets are already feeling the effects of a correction as pricey condos and hotels lay vacant in Miami, Manhattan and other high-end markets, where corrections are most heavily felt.

The CIO at Mack Real Estate Credit Strategies in Miami says they are already raising the bar for lending. In recent months, they have provided $275 million in financing to condo projects, but now say, “The bar is much higher.” That’s going to impact lenders has they turn to private sources of funding as regulated lenders leave the market much more volatile than they found it.

Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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South Florida Condo Sales Take a Hit In February

by Isaac Benmergui, Esq on May 3, 2016

South Florida Condo Sales Take a Hit In FebruarySales for newly listed South Florida condos were down in February, according to a report from the Miami Association of Realtors.

In Miami-Dade County, just under 1,100 condos closed sale last month. That’s down 10 percent from February 2015. But while fewer condo units sold, the price rose 9 percent compared to the same time last year. For single-family homes, the number of sales held even compared to February 2015 while the median sales price also rose 10 percent.

Supply in both markets has been rising, with rising prices inspiring more South Floridians to take a dip into the market. At the same time, new condos have been flooding the market, with more than 11,000 units in progress east of I-95. Listings for existing condos hit 13,000 in February, a 16 percent increase year-over-year.

Countywide numbers show the real estate market as a whole is cooling, but in certain price brackets, sales are actually picking up speed. For example, single-family homes priced in the $200,000 to $600,000 range rose 18 percent in February. Condos priced between $150,000 and $300,000 grew 8 percent.

A strong U.S. dollar is impacting the Miami market, discouraging foreign investors, while volatility in the stock market is causing wealthy domestic buyers to play it safe for now. Another factor at play in the market may be the recent geographic targeting order issued by the U.S. Treasury Department, which now requires title agencies to report the buyer identity in all-cash sales of $1 million or more in Miami-Dade county. Currently, the order is in effect until late August.

Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Listings are Getting Creative in Miami

by Isaac Benmergui, Esq on May 2, 2016

Listings are Getting Creative in Miami

As home sales tighten up in Miami, it’s hard to get your listing noticed. Well, here’s one way: Give your potential buyer options. A Miami construction magnate is doing just that.

Luis Garcia, CEO of Adonel Concrete, is offering his home for sale, but that’s not all. You can either buy the existing property as it stands for $9.98 million. Or for $15 million, he’ll demolish the current structure and build a 6-bedroom, 5-bathroom two-story mansion with a rooftop terrace, the plans for which have already been approved by both the city and the HOA. The two different options each have their own MLS numbers.

Garcia bought the property in 2012, and was planning to knock it down in favor of the 6-bedroom mansion he had envisioned. The 3,458 square-foot home is impressive as it stands: The mid-century mansion has 3 bedrooms, 3 bathrooms, a dock, pool, mini golf course and zen garden. The home is also the only home in the community to have a rooftop terrace approved since Bay Point passed a rule banning them on new construction. Other perks include a park across the street and the location right at the connection of Sabal Lake and Biscayne Bay.

A buyer purchasing the current home as it stands would be paying about $2,886 a square foot. The rebuild comes in at $2,068 per square foot since it’s nearly double the square footage of the existing home. The average home price in the Upper Eastside is around $273k.

Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Colombia Leads Searches for South Florida Real Estate

by Isaac Benmergui, Esq on April 29, 2016

Colombia Leads Searches for South Florida Real Estate

Brazil may have finally been unseated as the most frequent searchers of South Florida real estate: for the past two months, Colombia has topped the list of international destinations looking to buy up property in Miami.

Venezuela and Brazil represent the largest number of international buyers in Florida. They represent 31 and 12 percent of South Florida home sales respectively. Colombia ties with Argentina, representing 10 percent of home sales. Brazilian buyers spend an average of $516,000 on a home.

South Florida is currently the number one market for all international property searches, followed by Los Angeles and Long Beach. South Florida’s popularity with international buyers is part of the reason it was included in a recent geographic targeting order.

The U.S. Treasury Department will now require title insurers to report the identity of cash purchasers for transactions over $1 million. This includes LLCs. The order affects Manhattan county as well, and if successful will be implemented in other metro areas. Authorities hope it will reduce the use of high-value properties in money laundering. In Miami-Dade county, more than 1,150 home sales priced $1 million or high took place last year. That means 60 percent of all home sales over $1 million were cash transactions. Nearly 78 percent of all home sales nationwide are conducted through a mortgage company.

Currently, the GTO only extends to Manhattan and Miami-Dade counties, and only lasts through August. If the program is successful, it is expected to expand to more counties and for a longer period.

Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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Developers Moving into the Rental Market

by Isaac Benmergui, Esq on April 28, 2016

Developers Moving into the Rental MarketAs sky-high cranes continue to pump out condos in South Florida amidst waning demand, some developers are changing their focus to the rental market.

One such developer is Verzasca Group LLC. Although they have been in the condo-building business since 2014, they are changing tack to the rental business, largely because of a huge slow down in condo sales. Currently, 78 towers with 11,201 units east of I-95 in Miami-Dade County are still unfinsinhed.

The demand for rentals is high in Florida for a number of reasons. First, still-climbing home prices mean South Floridians can’t afford to save for a large down payment. Second, millennials entering housing market eligibility are showing a preference for renting over buying to stay mobile and follow the job market. Third, housing inventory is tight and likely to stay that way.

Absorption rates for rental projects are fast on the Upper East Side, Coral Gables and North Miami Beach. Once rentals are completed, they are rented out within 12 months. Many rentals in Miami are also older, so the demand for new-construction rentals is high.

One area that is greatly wanting in the South Florida market is affordable housing. With prices slowing, many builders are focused on the high-end market to make up for lost volume with luxury prices. Verzasca Group’s rental projects, which will be new construction, will go for $2.20 to $2.50 a square foot, which will include amenities like dog parks, gyms, office space and common areas.

Miami Real Estate Lawyer Isaac Benmergui at 305.397.8547 and set up a no charge, no obligation consultation to discuss your case. We have over a decade of experience handling Real Estate, Civil Litigation, and Personal Injury cases throughout Miami and South Florida, and will use our expertise to help your case to the best of our abilities.

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