Category Archives: News

Foreign buyers are snapping up more American real estate than ever

Sunday, July 23, 2017

From TRD New York: One market’s loss, is another market’s gain. Countries like Canada, the United Kingdom, Australia, and New Zealand are starting to see foreign buying tapering.

However, the United States is starting to see a surge in foreign buying according to the National Association of Realtors (NAR). These numbers are showing explosive growth in both the transactions, and dollar volume.

Explosive Growth Across The United States

Foreign buying is experiencing growth across the United States according to NAR. In the 12 month period from April 2016 – March 2017, there were 284,455 homes bought by foreign buyers. This represents 32.37% growth from the previous 12-month period, and roughly 5% of all homes bought across the US. The total dollar volume of these homes works out to just over US$153 billion.

Canadians Most Likely To Be Non-Resident

An interesting breakdown of foreign buyers is how they use the homes. There’s two kinds of foreign buyers, resident and non-resident. Resident buyers are people that have immigrated to the US, or have obtained a long-term visa. Non-resident buyers are buyers that (at best) use the home occasionally. Sometimes these are people that have an occasional use family home, but often they’re just speculators that are holding property as an inflation sensitive currency hedge.

According to NAR, the majority of buyers from China, India, and Mexico were resident buyers. Buyers from Canada, and the United Kingdom were both mostly non-resident buyers.

Breakdown Of Regions By Dollar Volume

The US has foreign buyers from all over the world, but just five countries are estimated to make up the majority of sales by dollar volume. Chinese buyers bought US$31.7 billion worth of real estate, a 16% increase year-over-year (YOY). Canadians bought US$19 billion worth of real estate, a massive 113% increase YOY. Residents of the United Kingdom bought US$9.5 billion, a 72% increase YOY. Mexicans bought US$9.3 billion in real estate, a 93% increase YOY. In fifth is India, with an estimated US$7.8 billion, a 27% increase YOY. This is huge growth, and likely to contribute to upwards pressure on home prices.

Breakdown Of Regions By Transactions

In terms of the number of homes, the same five countries are estimated to top the list. Chinese buyers bought 40,572 homes, a 38% increase YOY. Canadians bought 33,819 homes, a 25% increase YOY. Mexicans bought 28,516 homes, a 59% increase YOY. Indians bought 14,934 homes, a 2.86% increase YOY. Residents of the UK bought 12,869 homes, a 40% increase YOY. That’s 46% of the 284,455 foreign purchases made across the US.

There’s two things that I think are important things to consider when looking at these NAR numbers – concentration, and new capital controls. While foreign buying across the country is only 5% of home purchases, there’s a lot of regions where foreign buyers aren’t even considering. This likely makes the concentration of foreign buyers much higher in markets like Los Angeles, and San Francisco. Conversely, the concentration in Poughkeepsie is probably a little lower.

The second point is China’s new capital controls were rolled out in January, along with a new anti-money laundering framework. This expected to drastically reduce the amount of capital that can exit the country. Even China’s largest overseas property firm estimates at least a 20% decline this year. Since these numbers are mostly 2016 months, expect Chinese buying to slow down dramatically in 2017.


Source: The Real Deal

Almost 1,000 acres for sale in rural Collier County

Saturday, July 22, 2017

HHH Ranch (Source: Naples Daily News)

The owners of nearly 1,000 rural acres in Collier County have circulated an offering memorandum to sell their property.

Land Solutions is marketing the partially cleared pasture land, known as the HHH Ranch, east of Collier Boulevard and north of the Alligator Alley section of Interstate 75.

The offering memo has set a deadline of July 28 at 5 p.m. for bidders to make their best offer for the HHH Ranch.

Randy Thibaut, one of two brokers marketing the HHH Ranch, told the Naples Daily News that their goal is to put the property under a sale contract by the end of August.

The offering memo lists residential development options for the land, one with 342 houses and two others with more than 500 houses each, plus rental housing. The land also could be used for mining, perhaps in advance of residential development.

The land is owned by Dr. Francis Hussey Jr. and his wife, Mary Pat. In May, they proposed selling the HHH Ranch to Collier County outright. Alternatively, they also proposed transferring the land to the county but retaining limestone-mining rights.

The Florida Wildlife Federation proposed an acquisition of the HHH Ranch by Conservation Collier, a land-buying program funded by county tax revenue.

The Husseys subsequently submitted an acquisition application to Conservation Collier, in which they valued their land at $75 million – far more than the program can afford to pay. [Naples Daily News]Mike Seemuth


Source: The Real Deal

Alta nabs $58M construction loan for 3900 Biscayne project

Friday, July 21, 2017

Rendering of Quadro (Credit: Metrostudio) and developer Henry Pino

Alta Developers closed on a $58.4 million construction loan for a mixed-use project at 3900 Biscayne Boulevard.

The Miami-based development firm, led by Henry Pino and Felipe Raimundo Onetto, secured the loan from Banco de Credito e Inversiones subsidiary BCI Miami, according to a press release. It’s for Quadro, a 198-unit, 13-story mixed-use apartment building planned for the former home of ABC affiliate WPLG-10.

The financing, which includes a $13.5 million mezzanine loan, took a year to structure and close, the release said.

The Comras Company is handling leasing for the 28,000 square feet of ground floor retail space. Revuelta Architecture and Behar Font & Partners are designing the 13-story building. It’s going through the city approvals process, including re-platting and environmental remediation.

Quadro will replace the Miami Arts Charter School, which moved to a new facility in Wynwood. Nancy Karp, of Kobi Karp Architecture & Design, sold the 1.6-acre property to Alta in 2015 for $18.4 million.

Alta’s other South Florida developments include Baltus House at 4250 Biscayne Boulevard, 900 Biscayne and Le Parc at Brickell. – Katherine Kallergis


Source: The Real Deal

Castle Lanterra Properties buys Loftin Place in West Palm Beach for $63.5M

Thursday, July 20, 2017

805 North Olive Avenue Inset: CLP founder and CEO Elie Rieder

New York-based Castle Lanterra Properties just paid $63.5 million for a 259-unit Loftin Place apartment community in West Palm Beach, marking its first acquisition in Florida.

The mid-rise, eight-story building at 805 North Olive Avenue was developed by Cypress Real Estate Advisors, a Texas-based real estate investment and development company. Cypress paid $13 million to acquire the site in 2006.

A spokesperson for CLP said the building is 92 percent leased. Elie Rieder, CLP founder and CEO said CLP took on $40 million in debt from Freddie Mac.

The multifamily development offers studio, one-, and two-bedroom units that range from 578 square feet to 1,037 square feet, with rents ranging between $1,581 to $2,169, according to Apartments.com.

Units come with high ceilings, quartz countertops, wood flooring, stainless steel appliances and private patios and balconies. Residents have access to a fitness center, conference room, pool, rooftop running track, tennis courts and grilling stations.

“There’s been a five-year shift in the market where there’s more millennials looking to move to downtown,” CLP’s head of investments Ben Loney said. “That coupled with the train [Brightline], it’s a strong demand driver for that area and we see that continuing in the near and extended future.”

Avery Klann of ARA Newmark represented the seller. David Layman of Greenberg Traurig and Mitch Clarfield of Berkeley Point Capital represented CLP, according to a press release.

CLP owns and manages a portfolio of 8,900 units with a value in excess of $1.5 billion. Rieder said CLP is looking to get more active in the South Florida and Orlando markets.

Real estate prices in West Palm Beach’s downtown are rising along with rent costs. A 73-acre, mixed-use development called Water Tower Commons is being built on Lantana Road. Although construction on the development has lagged, the developer has approval to build more than 300,000 square feet of commercial space for offices, retail stores and restaurants.


Source: The Real Deal

West Palm office buildings sell out of foreclosure for $7.5M

Wednesday, July 19, 2017

1601 Belevedere Road and Neil Merin

A pair of West Palm Beach office towers just sold out of foreclosure for $7.5 million to NAI/Merin Hunter Codman.

A commercial mortgage-backed securities trust sold Towers at 1601 Belvedere, a 101,730-square-foot office complex with two five-story buildings to the West Palm Beach-based real estate investment firm. The deal breaks down to about $74 per square foot.

Marcus & Millichap’s Douglas K. Mandel and C. Todd Everett represented the seller, Belvedere Investment Associates LLC. Mandel and Everett had previously marketed the property in 2013, when it faced foreclosure due to an outstanding $9.86 million mortgage from Wells Fargo.

The property previously sold for $9.9 million in November 2003. In 2005, it was appraised at $15.5 million but dropped to $6.8 million in 2013, property records show.

Everett said in a press release that the suburban office market is strong in Palm Beach County thanks to supply constraints and limited new development.

Last month, a CMBS trust sold the Concourse Towers, also in West Palm, to investors Carlos and Thomas Morrison for $13.8 million, or $92 per square foot. – Grace Guarnieri


Source: The Real Deal

Douglas Elliman signs lease at 5555 Biscayne

Tuesday, July 18, 2017

5555 Biscayne Boulevard and Jay Parker

Douglas Elliman plans to relocate its Design District office as well as its development marketing team to 5555 Biscayne Boulevard, The Real Deal has learned.

The brokerage signed a lease for the entire third floor, or nearly 6,000 square feet, at the office building recently renovated by Avra Jain’s Vagabond Group. Elliman will make the move in about six months, once the space is built out, Jay Parker, CEO of the brokerage’s South Florida division, confirmed to TRD.

Since it acquired Majestic Properties in June 2014, Elliman has occupied about 3,000 square feet at 35 Northeast 40th Street in the Design District. That building, owned by Redsky Capital, is slated for redevelopment.

Elliman’s development marketing team, which now operates out of parent Vector Group’s corporate offices at 4400 Biscayne Boulevard, will also join in the move to 5555 Biscayne. In all, the space will serve as the office for about 100 agents.

“We needed more space, we needed a more functional location with parking and accessibility and visibility,” Parker said. “It’s a great location with great exposure on Biscayne.”

Jain and partner Joe Del Vecchio’s 261 Bumblebee LLC acquired the property for $2.2 million in 2014, property records show. Leasing for the 23,000-square-foot building began in October 2015, during construction, which included gutting and updating the interiors, putting in new floor-to-ceiling glass windows and installing six new balconies. Metro 1 is handling leasing.

Asking rent is $40 per square foot, according to Loopnet. The only tenant currently in the building is Apure, an architectural lighting company owned by Porsche Design Studio.

Elliman has 20 offices and more than 1,000 agents in South Florida. In addition to its Design District location, the firm has five other offices in Miami-Dade County, including three in Miami Beach, one in Coconut Grove and one in Aventura. In TRD’s October 2016 ranking of top new development marketing firms, it placed fourth, with 1,757 units over 18 projects.


Source: The Real Deal

Alfred Angelo bridal retailer files for Chapter 7, closes South Florida stores

Monday, July 17, 2017

Credit: Flickr user Celynek

Alfred Angelo broke its vows with brides across the country.

The Delray Beach-based bridal store chain filed for Chapter 7 bankruptcy on Friday and closed its 60 stores, including 23 in Florida and three in South Florida. Chapter 7 leads to liquidation.

Alfred Angelo has between 10,001 and 25,000 creditors, which appear to include municipalities, customers who made deposits, and landlords, according to its bankruptcy filing. The bridal chain estimated its assets between just over $10 million to $50 million, and requested that any remaining funds be available to unsecured creditors. Alfred Angelo’s estimated liabilities were self-reported as between just over $50 million to $100 million.

The company filed for bankruptcy protection in the Southern District of Florida. It does not appear to own any real estate.

In South Florida, Alfred Angelo shuttered its standalone stores at 246 Miracle Mile in Coral Gables, 13895 Sunrise Boulevard in Sunrise and 393 Congress Avenue in Boynton Beach. Property records show a company tied to property owner and former commission candidate Jackson Rip Holmes owns the Coral Gables building. Stores and restaurants along Miracle Mile have reported slower sales and foot traffic thanks to a delayed streetscape project.

In Sunrise, Trikon Sunrise Associates, a company tied to Midtown Miami developer Jon Samuel, owns the shopping center where Angelo Gordon was located.

All three South Florida landlords were included in the bankruptcy filing’s list of creditors. The company also owed the property owner of its Delray headquarters rent, according to the South Florida Business Journal. G&C Arbors Investors sued to evict Alfred Angelo from its office at 1625 South Congress Avenue for one month’s rent, which came out to more than $45,000. G&C is also a creditor.

Retailers across the country have struggled in recent years, suffering from declining mall traffic, fixed rental costs and online competition. Last week, children’s clothing chain Gymboree filed for bankruptcy protection and will close hundreds of stores nationwide, including 14 in Florida and four in South Florida.

Alfred Angelo’s competition was quick to capitalize on the closures. David’s Bridal offered discounts and free rushed alterations to Alfred Angelo customers with a receipt, the New York Times reported.

Harunobu Coryne contributed reporting.


Source: The Real Deal

Developer set to start building 400-unit Jacksonville apartment complex

Sunday, July 16, 2017

Rendering of the Ciel apartment complex in Jacksonville (Source: Jacksonville Daily Record)

A developer expects to start construction within 30 days for a 400-unit apartment complex in the Southside area of Jacksonville.

Permit applications show that the cost of the construction work is $38 million, and developer WRH Properties Inc. expects to finish building the rental project in 20 months.

An affiliate of WRH paid $9.2 million for the 16.6-acre development site at 4929 Skyway Drive, next to the campus of health insurer Florida Blue.

The sellers were Guidewell Group Inc. and Blue Cross and Blue Shield of Florida Inc.

The WRH affiliate also obtained a $39.2 million loan from State Farm Life Insurance Co. secured by the 16.6-acre site.

The rental housing development, called Ciel, will have six apartment buildings, each four stories tall, plus a two-story, 8,500-square-foot clubhouse and two parking garages, each one story tall.

Ciel will have one-, two- and three-bedroom apartments with monthly rents starting at $1,150.

The size of the apartments will range from 654 square feet for a one-bedroom unit to $1,900 for three-bedrooms.

In addition to the clubhouse, the common-area amenities at Ciel will include a swimming pool, spas for people and pets, a fitness center, business center, dog park, bicycle shop for storage and repairs, and electric-car charging stations.

The city of Jacksonville approved site-clearing work for Ciel on June 23 and is now reviewing applications for permits to construct the apartment complex.

The general contractor is Summit Contracting Group and the architect is Humphreys & Partners Architects. [Jacksonville Daily Record]Mike Seemuth


Source: The Real Deal

Saglo buys its fifth Tampa-area shopping center

Saturday, July 15, 2017

A barbecue cookout at a clubhouse in Sun City Center

Miami-based Saglo Development acquired its fifth Tampa-area shopping center in Sun City Center, an age-restricted, senior housing development south of Tampa.

Saglo obtained financing from BB&T and bought the Marketplace at Cypress Creek in Sun City Center. A lender had controlled the 75,100-square-foot retail property for the last two years, and property’s occupancy rate is 67 percent. CBRE and NAI Global brokered the transaction.

Retail properties at Sun City Center have high occupancy rates except for Marketplace at Cypress Creek.

Its major tenants at include American Clinical Solutions, Hear USA, Enterprise Rent-A-Car, DaVita Medical Group and DaVita Dialysis.

Saglo said in a press release it was attracted to Marketplace at Cypress Creek because of its proximity to retirement communities and South Bay Hospital, which is undergoing a $30 million renovation and expansion.

Saglo owns Florida shopping centers spanning more than 1.4 million square feet of and is actively seeking to acquire more.


Source: The Real Deal

An inside look at the German institutional investor that bought 1111 Lincoln for $283M

Friday, July 14, 2017

1111 Lincoln Road

The name Bayerische Versorgungskammer may not sound familiar, but the institutional investor that acquired 1111 Lincoln last week for $283 million, is an active buyer of trophy properties in the United States.

Across the country, Bayerische Versorgungskammer, known as BVK, owns retail and office properties worth at least $1.6 billion, in cities like New York, Chicago and Los Angeles, according to The Real Deal’s analysis of Real Capital Analytics dataAmong BVK’s holdings: 85 Fifth Avenue in New York that houses Anthropologie, and the downtown L.A. former headquarters of CBRE at 400 South Hope Street. It is also one of the largest institutional investors in Germany and among the top 10 pension funds in Europe, BVK’s head of corporate communications Maike Kolbeck, wrote in an email.

In South Florida, BVK owns at least one other property, the London Square mall in Miami’s Kendall neighborhood. Institutional investment adviser RREEF, on behalf of the German investor, paid $95.25 million for the traditional shopping center in early 2011, records show. It’s anchored by TJ Maxx, Ross Dress for Less and other retailers.

BVK closed on the acquisition of Robert Wennett’s 1111 Lincoln, a mixed-use parking garage known for its design by Herzog & de Meuron Architects, in late June and financed the deal with a $66.85 million mortgage from HSBC. CBRE Global Investors and German investment firm Universal-Investment purchased the property on behalf of BVK.

CBRE Global Investors, which declined to comment for this article, previously told TRD that CBRE saw opportunity in one of the largest buildings on Lincoln Road.

The building’s design, mix of uses, and experiential retail tenants will “stand the test of time,” Stuart Sziklas, managing director of CBRE Global Investors-Americas, said.

BVK has about $39 billion of assets under management, Kolbeck wrote. “There will likely be more acquisitions within our international investment strategy in the U.S.,” she said, declining to comment on its deals.

In the U.S., BVK “partners” with local investment managers and funds like CBRE Global Investors. LaSalle spent more than $600 million on behalf of the German investor since 2011, and CBRE was the second biggest with nearly $515 million, according to RCA.

In terms of commercial brokerages, Eastdil Secured, which represented Wennett in the sale of 1111 Lincoln, works with BVK more than any other firm in the U.S., brokering nearly $632 million in sales volume since 2011. CBRE is again close behind with about $512.5 million, data shows.

Eastdil did not return calls for comment and LaSalle declined to comment.

1111 Lincoln

The 1111 building, which sits at the northwest entrance of the Lincoln Road mall, includes 94,488 square feet of office space, 51,839 square feet of retail space, and a 300-space parking garage/event space. Wennett recently renovated the lobby, converted some of the office space on the fourth floor to retail, and made improvements to the alley north of the parking garage.

The deal included the retail space at 1664 Lenox Avenue and 1666 Lenox Avenue, both newly constructed, and excluded the residential condos.

Eastdil had the listing in the fall, but the sale was an off-market deal, Sziklas said.

Michael Comras, who sold the Nike and Apple-anchored block for $370 million to Zara billionaire Amancio Ortega in 2015, said the deal shows the strength of the Lincoln Road market nearly two years after his record sale, which many considered the peak of the market.

Institutional investors and wealthy buyers like Ortega look for finished product as opposed to value-add opportunities, Comras added. “They don’t want to buy a product and make it something,” he said.

The Lincoln Road market, like retail across the country, is shifting. “When we first went into Lincoln Road 20 years ago, it was a different era. … [Now] properties are being redeveloped to their potential and sold because people need to do different things.”

Brick-and-mortar retail now needs to keep consumers interested and engaged, pulling them off of their phones and into stores. “I think 1111 and Robert and his ability and vision to create different uses in the property in an architectural fashion makes it a great [asset],” Comras said, adding that the property is spurring new leasing activity nearby, including at the AMC-anchored 1100 Lincoln Road.

When it comes to attracting institutional-level buyers, he said it’s “very easy to make the call, not so easy to make the price.”

CBRE, which reports to CBRE Global Investors, was just hired to manage and lease 1111 Lincoln, the brokerage said. Todd Siegel and Danny Diaz will lead retail leasing, Diana Parker and Kevin Gonzalez will handle office leasing, and Love Levy will spearhead management. The property is fully leased.

Tenants include Juvia on the rooftop, Ted Baker, Shake Shack, Taschen, Nespresso, Rosa Mexicano, MTV Latin America and Douglas Elliman according to RCA and CBRE. Jo Malone and Rosetta Bakery will be in the newly completed retail space on Lenox Avenue, Diaz said.

Juvia is in the midst of expanding by about 4,000 square feet of former office space.

The retail market on the pedestrian-only street has been going through a correction ever since rents peaked at the start of 2016, experts say. Market rents range from about $260 per square foot to about $300 per square foot. CBRE declined to provide rents at 1111 Lincoln.

“Right now, there are some vacancies [on Lincoln Road]. Two years ago rents were increasing at a double-digit pace but now its sort of leveled off,” Diaz said.

The brokerage’s plan includes to work with the property’s events manager to develop signature events, including during Art Basel and Fashion Week, as well as company parties and more, Parker said. The sale included the artwork on every floor, she said.

“This new ownership [is] known for creating elevated tenant experiences,” Parker added. “There’s nothing close to it.”

Harunobu Coryne contributed reporting.


Source: The Real Deal