By the end of 2017, Manhattan will have 5 years of excess inventory: analysis

pipeline

From the New York website: Developers, those most antsy of creatures, would be wise to start getting patient.

Roughly 14,500 units are expected to hit the market between 2015 and 2017, according to a new analysis by Miller Samuel for The Real Deal. But by the end of 2017, just over 5,000 of those units are expected to have sold, and going by the current rate of sales, it would take more than five years to sell all that excess inventory.

The analysis looks at all new units that have launched or are set to launch in Manhattan over a three-year period, across all price points. It assumes the same rate of sales the new development market saw during the second half of 2015, which equates to just under 1,850 closed sales per year.

Based on that absorption rate, more than 9,400 new units would be unsold by the end of 2017, according to the Miller Samuel analysis.

“The takeaway is that we have anywhere from four to six years of excess supply, assuming the rate of sales holds steady,” said Miller Samuel CEO Jonathan Miller, who cautioned that the analysis is imperfect since it measures closed sales and not contract activity. “You’re still selling during this period, but you’re not selling as much as is coming on. You can’t burn it off fast enough.”

In 2015, roughly 5,500 new condos came online, with another 6,000 and 3,000 projected to hit the market in 2016 and 2017, respectively.

“It’s confirmation to me that we’ve entered a new market of rational exuberance, as opposed to irrational exuberance,” said Leonard Steinberg, president of Compass. “It’s a solid market, but it’s a market about patience or price.”

The extreme speed at which apartments sold and the massive price escalations has “tempered,” he added.

The long runway for absorption poses a real question for developers, said Olshan Realty’s Donna Olshan, who tracks contract activity for residential properties $4 million and up. “It’s worrisome,” she said, but added that predictions don’t always come to bear. “If you used that model in 2000, you’d think we’d be under water for a long time.”

Developers operating in the market should take a long-term view, according to Olshan. “They can’t have projections of selling out quickly,” she said.

A few more caveats: Units will sell faster or slower depending on the neighborhood, price point and variety of other factors. While demand for ultra-luxury product has certainly slowed, Olshan pointed out that there remain few choices  for buyers looking for one-bedroom condos under $1 million.

Dave Maundrell of Citi Habitats concurred, saying “there are no broad strokes” in the current market. “It’s really product specific,” he said. “When a client calls and says, ‘I want to do a condo in Williamsburg, can I get $1,300 a foot?’ I need to ask a lot of questions before I can answer.”

Still, Maundrell said new development units are taking longer to sell today compared with two years ago, both because of more product on the market and an increased willingness on the buyer’s part to venture into a larger group of neighborhoods.

“In 2006 when we were marketing condos, people said ‘Williamsburg or Park Slope,’” he recalled. “Now, people are bouncing from neighborhood to neighborhood, and building to building.”

Douglas Elliman’s Frances Katzen said some developers are (wisely) repositioning projects based on the current market. “The old adage that once you go up [in price], you can’t go down? We’ve seen people do it and do very well. There’s been no shame in it,” she said.

Extell Development, for example, has lowered its expectations at One Manhattan Square, dropping its total sellout price by more than $200 million to $1.87 billion, as TRD reported. Toll Brothers has also dropped prices at 1110 Park Avenue and 400 Park Avenue South, and World Wide Group and Rose Associates have done the same at 252 East 57th Street.

“Everything has adjusted to a new normal and that’s okay” Steinberg said. “The market is far from dead. There are a lot of deals happening. If you have a property at the right price and are not expecting to sell within a few hours of listing, you will be fine.”


Source: real deal miami

D.R. Horton plans homes at closed golf course

The Golf Club in Cape Coral

The Golf Club in Cape Coral

Home builder D.R. Horton has a contract to buy a former golf course property in Cape Coral known as The Golf Club for an undisclosed price.

Representatives of Fort Worth, Texas-based D.R. Horton told Cape Coral City Manager John Szerlag the company hopes to build single-family homes on the 175-acre green space dominated by overgrown fairways.

Once a source of pride among Cape Coral residents, The Golf Club closed 10 years ago. The city subsequently rejected a proposal by the property’s owner, Florida Gulf Venture Inc., to build a mixed-used development there.

D.R. Horton has not applied to the city to develop The Golf Club property, but the prospect already has sparked criticism.

Mary Nielson, founder of a community campaign called “Save The Golf Club,” told the CapeCoral.com that the property is the last large green space in south Cape Coral, and D.R. Horton would eliminate the space by building homes there : “If this comes to pass, it’s sad.”

Cape Coral city spokeswoman Connie Barron said the future land use of the property is “parks” and the zoning designation is “residential.” [CapeCoral.com] — Mike Seemuth


Source: real deal miami

Suze Orman sells Plaza Hotel condo for $4M

The Plaza Hotel and Suze Orman

The Plaza Hotel and Suze Orman

From the New York website: TV host, author and personal finance guru Suze Orman took a break from talking personal finance to take care of a bit of her own.

Orman sold her one-bedroom, 1,279-square-foot condominium unit at the Plaza Hotel on Central Park South for $4 million, Curbed reported.

The asking price for the furnished unit – which features a chef’s kitchen, marble walls and bathrooms and smart lighting – was $3.995 million, reduced from $4.5 million in September.

The Corcoran Group’s Charlie Attias had the listing.

The Plaza is set to be auctioned next month, after Monaco-based billionaire brothers David and Simon Reuben moved to foreclose on the property this week after majority owner Subrata Roy’s Sahara India Pariwar defaulted. The sale will also include the Plaza’s restaurants and retail spaces.

Orman recently ended her CNBC program, “The Suze Orman Show.” She’s currently developing an new series, “Suze Orman’s Money Wars,” for Warner Brothers. [Curbed]Ariel Stulberg


Source: real deal miami

February homes sales fall 22% in Naples area

The number of Naples-area homes listed for sale surged 27% to 5,510 in February.

The number of Naples-area homes listed for sale surged 27% to 5,510 in February.

February home sales in the Naples area fell 22 percent, year over year, but the median sale price increased, the Naples Area Board of Realtors reported.

The Realtors also reported that the number of Naples-area homes listed for sale increased 27 percent to 5,510 in February from 4,343 a year earlier.

“After two years of rapid sales, it looks like the Naples-area real estate market is going through a natural correction process to a balanced market,” Rick Fioretti, president and broker associate of Berkshire Hathaway Home Services Florida Realty, said in a prepared statement.

The number of Naples-area home sales fell to 518 in February from 668 in the same month last year, the Realtors reported, and the median sale price rose, anyway, to $323,000 from $290,000.

“February had the lowest number of closed sales on record of any month since November 2013,” Bill Coffey, broker-manager of Amerivest Realty Naples, said in a prepared statement. “And the highest inventory level in two years. If we continue to see a dramatic increase in inventory each month like we did for February, then we may eventually see it affect median closed prices.”


Source: real deal miami

Waterfront mobile home park goes for $3.3 million

The Zachary Taylor RV Park in Okeechobee

The Zachary Taylor RV Park in Okeechobee

A waterfront rental community sold for $3.3 million in Okeechobee, the small town on the northern shore of the state’s biggest lake, Lake Okeechobee.

Coastal Income Properties bought the Zachary Taylor RV Park from a private seller, according to brokerage firm Capstone Manufactured Housing.

Kevan Enger and Deucie Bies of Capstone Manufactured Housing brokered the $3.3 million sale.

It was the fourth manufactured housing park sale that Capstone has brokered for the seller.

Zachary Taylor RV Park is a 55-plus community with “immediate rental upside, and a high percentage of permanent residents,” Capstone said in a press release.

It is located four miles from the site of a planned 200,000-square-foot retail center.


Source: real deal miami

The Wrap: Design District developer signs utilities deal for Stardust retail, Palm Beach house to make way for spec home after $12M sale…and more

Miami

One of the Stardust retail projects in Miami’s Design District (Credit: The Next Miami)

1. Design District developer signs utilities deal for Stardust retail [The Next Miami]
2. Palm Beach house to make way for spec home after $12 million sale [Palm Beach Daily News]
3. West Palm Beach again moves to develop Tent Site [Palm Beach Post]
4. U.S. stocks are back in the green, but investors aren’t in the clear. [Wall Street Journal]

— Sean Stewart-Muniz


Source: real deal miami

CMBS could make a comeback, experts say

From left: Ron ,

From left: Ron Lo Russo, Jennifer McCool, Jessica Lappin and Qahir Madhany 

From the New York websiteAs banks retreat from funding certain projects, commercial mortgage-backed securities may return with renewed vigor over the next few months.

“You’re seeing the market solidify itself,” said Qahir Madhany, a principal of the Blackstone Group, at a panel on Wednesday. “We do think there should be a rally of CMBS over the next couple of months.”

Madhany, speaking at New York Law School’s “The Keys to the Future of NYC Real Estate” panel, noted that the strength of these securities has recently coincided with the health of equities and oil — two sectors that suffered in mid-February. He said the sectors have recovered quickly, and he expects CMBS to follow suit.

Lenders have increasingly backed off CMBS issuances since mid-2015, largely due to the volatility of global markets and pending federal rules — dubbed the “risky-retention” policy — that will require lenders to keep a portion of the loans on their balance sheets, increasing their cost of capital, The Real Deal reported in February. Jennifer McCool, chief legal officer at Related Companies, said that as long as other funding sources, such as balanced-sheet lenders, remain strong, the market in Manhattan shouldn’t be dramatically impacted.

“Over the past two years, CMBS debt markets have really fueled the recovery, in particular Manhattan,” she said at the panel. “Now, in looking at debt opportunities, the CMBS space has really dropped off, and folks who are still in that game, the pricing is not nearly as competitive.”

Ron Lo Russo, tri-state president at Cushman and Wakefield, said that the residential market in general is seeing a softening, with the exception of multifamily properties, which remain especially attractive to foreign investors.

“When you have the thread of negative interest rates in a lot of countries, New York is a great place to park money in large buckets,” he said.

He noted that the city’s aging infrastructure may imperil its longevity as the go-to city for millennials to — as various marketing campaigns hammer home — live, work and play. Jessica Lappin, president of the Downtown Alliance, cited the new Fulton Street Station and the $4 billion World Trade Center Transportation Hub — which opened earlier this month and has long been criticized for its massive cost overruns — as crucial examples of steps that have been taken to revitalize the city.

“We do, on a big scale, trail other cities,” she said. “But here, in Lower Manhattan, we really made that investment.”


Source: real deal miami

The Weekly Dish: Glass & Vine now open, Lokal owners to launch new Grove concept … & more

Clockwise from left: La Colombe, Pieology, Stellino's and Glass & Vine

Clockwise from left: La Colombe, Pieology, Stellino’s and Glass & Vine

The Weekly Dish is a TRD recurring feature that showcases the latest in South Florida’s restaurant openings, leases and sales. 

Coconut Grove is welcoming two new restaurants, Aventura Mall will offer another choice for a pick-me-up while shopping, and the first restaurant has opened at Downtown Doral. 

Glass & Vine | Coconut Grove

Glass & Vine opened on Monday in Coconut Grove’s Peacock Park about two months behind schedule. The 200-seat, 4,600-square-foot restaurant opened in the former Coconut Grove Library space at 2820 McFarlane Road. Miami chef and restaurateur Giorgio Rapicavoli, along with Grove Bay Hospitality Group, are behind the new eatery.

The space will include a waterfront, 2,320-square-foot outdoor patio with white quartz tabletops and orange chairs; a 24-seat bar with sliding accordion and garage-style glass walls; an open kitchen; a 600-square-foot open patio area; and a vine-covered roof. The indoor space will span 1,680 square feet. Lease details were not disclosed.

Grove Bay Hospitality Group is also developing a restaurant and retail project on the Coconut Grove site called the Harbour, which will include two high-end restaurants, a casual outdoor eatery, an indoor and outdoor event space, a 400-slip marina, retail and a bay walk.

Spillover | Coconut Grove

Matt Kuscher of restaurants Kush and Lokal announced he will open the Spillover in Coconut Grove.

The new restaurant, at 2911 Grand Avenue, will open soon pending permits, Kuscher told the South Florida Business Journal. The Spillover will offer local seafood dishes and seat up to 70. It will also feature a mural from Miami artist Camilo Rojas. [SFBJ]

La Colombe | Aventura Mall

La Colombe Coffee Roasters signed a lease at Aventura Mall to open this summer. The new location marks the first in Florida for the coffee chain, which has 14 locations in Chicago, New York City, Philadelphia and Washington, D.C.

Lease details were not disclosed. The coffee shop will serve chocolate bars; “Drum Rum,” a sugar and coffee-infused rum; cold-pressed coffee; bakery items and salads and sandwiches. It will be located near Macy’s at the mall, at 19501 Biscayne Boulevard.

On New Year’s Eve, Turnberry Associates closed on a $213.5 million mortgage from JP Morgan Chase to fund the mall’s planned expansion. Construction has begun on the new wing, which is expected to open in late 2017, and will include restaurants, more than three dozen retail stores, a new food court with indoor/outdoor seating, and a VIP concierge area.

Stellino’s | Downtown Doral

Stellino’s Trattoria & Bar opened in Downtown Doral, marking the first restaurant to open at the mixed-use project. The owner of Sal’s Italian Ristorante opened Stellino’s at 8550 Northwest 53rd Street.

Koniver Stern Group’s Mickey Finkle and Arthur Shifrin represented the landlord, while Andrew Guzik of Real Estate Wealth Advisors represented Stellino’s. The 15-year lease is for 4,109 square feet, Guzik told The Real Deal.

Codina Partners also scored a grocer tenant this week for the $1 billion Downtown Doral project: Publix. The development is slated to bring 1 million square feet of commercial space, 400,000 square feet of offices and 2,840 residences to Doral when it’s completed.

Pieology Pizzeria | Miami

Pieology Pizzeria inked a 10-year lease for its first Florida location in Miami. The pizza restaurant chain opened in a 2,650-square-foot space on West Flagler Street, according to Newmark Grubb Knight Frank.

NGKF brokered the lease for the space at the Fountain Square shopping center, which is anchored by Publix and SuperTarget. The company has plans to open more locations in Florida. NGKF senior managing director David Preston in a release cited the store’s proximity to FIU and Doral.

Pieology’s menu includes customizable pizzas and salads.

Ms. Cheezious | Coral Gables

Say cheese, Coral Gables.

Ms. Cheezious will open in a 4,692-square-foot space in downtown Coral Gables in April. Westside Estate Agency’s Ari Drabkin represented Ms. Cheezious owners Brian and Fatina Mullins for the company’s second brick-and-mortar location, at 1915 Ponce de Leon Boulevard. WEA said the lease details were confidential.

The Coral Gables location will open in a single-story building built in 1945, which is about six blocks from Miracle Mile. It was formerly Cavatappi Cibo + Vino, and before that, Route 9.


Source: real deal miami

Verzasca closes $13M deal for City Hall site in Edgewater

The property at 2000 Biscayne Boulevard

The property at 2000 Biscayne Boulevard

The Verzasca Group has closed on its $13 million purchase of land on Biscayne Boulevard in Miami’s Edgewater district, where the developer is planning a new residential project.

The deal, first reported by the South Florida Business Journal, covers 32,775 square feet of land at 2000 Biscayne Boulevard. It was previously home to the City Hall restaurant, which closed in January, as well as several small commercial tenants like CitiMED.

Aerial view of the property

Aerial view of the property

Verzasca paid nearly $397 per square foot for the land to owner 2000 Biscayne, LLC, which is managed by Christian Parth, according to county records. Parth’s company acquired the site for $5.4 million, or $165 per square foot, in 2007.

A Verzasca spokesperson declined to disclose details about the planned project at this time.

As part of the deal, Verzasca signed an agreement to give Parth’s company an unspecified number of condominiums in a high-rise the developer plans to build on the property, county documents show.

Versazca, a Russian group of developers based in Bay Harbor Islands, is working on three other condo projects: Aurora in Sunny Isles Beach, along with Pearl House and Le Jarden in Bay Harbor.


Source: real deal miami

Starwood accepts Anbang’s takeover offer for over $13B

From left: Anbang’s Wu Xiaohui of Anbang and Thomas Mangas of Starwood

From left: Anbang’s Wu Xiaohui of Anbang (credit: Anbang Insurance Group) and Thomas Mangas of Starwood

From the New York website: Starwood Hotels & Resorts accepted Anbang Insurance Group’s takeover offer with the Chinese insurance giant acquiring the hotel owner and operator for about $13.2 billion.

Anbang will pay $78 per share in cash for Starwood, with news of the bid made public just this week.

However, Marriott, under the terms of a prior agreement to buy Starwood in November for $12.2 billion, now has five days to respond, CNBC reported. Anbang will also have to pay a hefty fee to Marriott if the bid goes through.

Marriott plans to make a counter-bid, sources told CNBC.

News of the deal lifted Starwood’s stock to 4.6 percent to $79.90 in pre-market trading, according to CNBC.

Last weekend, Anbang, which owns the Waldorf Astoria, also moved to acquire another marquee U.S. hotel portfolio. The Beijing-based insurer has a deal to buy the 16-property Strategic Hotels & Resorts portfolio from the Blackstone Group for a record $6.5 billion.

The Real Deal looked at what was behind the more than $19 billion play — global ambitions coupled with a slowdown in China. The combined figure roughly represents the total volume of Chinese investment in U.S. commercial real estate from 2007 to 2015. [CNBC]Dusica Sue Malesevic


Source: real deal miami