Offshore investors buying Florida real estate

Offshore investors are flocking to Florida’s distressed real estate prices as major companies with ties to Hong Kong, Spain, Argentina and Malaysia are snapping up properties sensing the local market has bottomed.

International companies can park their investment and position themselves for the next development cycle, said Tere Blanca, president and chief executive officer of Miami-based Blanca Commercial Real Estate.

“Acquiring prime properties at discount prices in the height of the market was not achievable. Whomever has deep liquidity and can be nimble and act when opportunities arise can acquire properties at what we consider to be solid pricing,” he said, according to the Daily Business Review.

Stephan Gietl of Austria and his partner Fernando Levy-Hara, of Argentina, have purchased 307 South Florida condo units for $40 million since 2009. The duo has sold most of the units, mainly to international investors. Levy-Hara says the units yield between 5 and 6 percent profit per year after maintenance fees and property taxes.

“With the potential appreciation, if you’re buying at half the price of the bubble, you have the potential to go up 60 to 70 percent in the next five years,” he said.

As Americans worry about the economy and debt ceiling, international investors still perceive the U.S. as “the most reliable country in the world,” said Andrew Hellinger, chief executive of Coral Gables-based Hellinger & Penabad.

“We are a country where you can place your money for investment and know it’s safe.”

South Florida’s most notable recent deals have ties to investors with connections to major international companies.

Swire Properties, part of Hong Kong-based real estate and airline owner Swire Pacific, bought 2.15 acres in Miami at $14 million, along with the $13.1 million acquisition of Eastern Bank’s headquarters.

In May, Malaysia-based Genting Group paid $236 million for the Miami Herald’s headquarters. Genting, which also owns 50 percent of Norwegian Cruise Lines, plans to build nearly 7 million square feet of hotel, convention and restaurant space. Genting executives cited Florida’s growing population, budding Miami tourism and a likely nonstop flight from Asia to Miami International Airport as motivating the deal.

Agave Holdings, with ties to the owner of Jose Cuervo tequila, paid First Bank Puerto Rico $30.55 million for a project in Coral Gables.

Espacio USA, the American arm of Spanish real estate company Inmobiliaria Espacio, is about to close on its second office building. The company paid $31.52 million for another office building last year, with renovations running more than $1 million.

Brazilians have led the Miami condo market resurgence, accounting for 9 percent of unit purchases among international buyers of Miami single-family homes and condos, according to the Miami Association of Realtors.

“The feeling in Brazil is certain aspects of their real estate and economy make U.S. real property a relative bargain,” said Richard Goldstein, of Bilzin Sumberg. “In other countries like Venezuela, the currency is not as much of a factor. Political instability is a factor; they want a safe haven for their money.”

MIAMI (AP) – Aug. 8, 2011 –

Copyright © 2011 The Associated Press. Information from: Daily Business Review, http://www.dailybusinessreview.com

Offshore investors snapping up Fla. real estate.

Two Merging Trends—High Rent and Low Prices

Two Merging Trends—High Rent and Low Prices. #in Within the past week, the Wall Street has given REALTORS® two merging trends to build a marketing strategy on. The first article, about a week ago, was on rental rate increases. [Click here for the full article: rental rates increase] Basically, the rental market is being overrun with former owners, who now need to rent, as well as a segment that either isn’t able to buy or isn’t ready to buy. The second article is just another one predicting doom and gloom in real estate markets. Full text is here: housing continues decline. We’ve heard this, if you are a REALTOR® you’ve been living this—although as we all know, all local markets vary.

But, as a traveling real estate trainer, I hear lots of buyers continue to fence sit, fretting about whether or not the bottom has been reached in housing, or whether or not the house they buy this year may decline in value. As your local association didn’t issue you a crystal ball when you paid your dues, you don’t know anymore than they do.  But here’s my take on fence sitting buyers, and the approach we should be using.

Let’s leave price in terms of sales price out of the equation. As I’ve told buyers for years, there is a cost to living anywhere—even if it is the cost of your self-respect, because you moved back in with Mom and Dad.  Those weighing renting or buying should bring the decision down to this: “Am I willing to pay $X a month to live in this house?” or: “Am I willing to pay $X a month (subject to increases) to live in this apartment (or condo, or house) for an indefinite period of time, at the end of which I’ll have a lovely collection of receipts, but nothing else.”

During the boom, everyone began thinking about their home as an investment. Some still argue real estate remains a good investment, overall (I’m one of them). But in the face of falling prices, buyers got skittish and now many think that if the price stays flat, or goes down, it’s a bad idea to buy that house. But what if the cost of the mortgage is less than comparable rent? In many parts of the country, that’s true. I’m in North Central Pennsylvania, where the influx of gas workers has pushed our rental rates up very high, very quickly.  Our prices are still very low. Rates are still very low. Again, the question should be: “Is it worth it to you to spend this much per month to live here?”

One final example: our son attended college at Coastal Carolina University, near Myrtle Beach. The amount of on-campus housing was way too little for the growing student body. He rented space in a house for one semester, living with a kid who was—let’s not mince words here—a real pig.  If the housekeeping bothers an eighteen year old boy, it’s bad. After that semester, my spouse and I looked at each other and said: “It’s going to cost us $X a month to have this kid housed—in something—for the duration of his college career. We might as well own it, control it and get some rental income from it.” We bought a house. We got in when prices were low, did NOT sell when they went up drastically, and got out of the property below break even—financially. But it terms of what it cost us per month to keep our son in that house, it was worth it.

I’m not suggesting your buyers set out to sell a house at a loss, even a small one (as we did). I am suggesting that your buyers simply look at housing cost as one part of their budget, and ask if the benefits received for that monthly payment are equal to or greater than the benefits received in a rental.  I’m also suggesting that buyers take a longer look at their anticipated tenure in a house, as the longer they are there the more likely it is two things will happen: the market will even out, and begin appreciating again and interest rates will rise, making that same house less affordable than now.

Home Prices Rise In 17 Cities In June, but …

But Prices Expected To Fall Now That Tax Credits, Demand Has Faded. Home Prices Rise In 17 Cities In June – Money News Story – WFTV Orlando. #in

Delinquent Mortgages Reach Record Levels

Almost 10 percent of all mortgages on one- to four-unit properties are in some stage of foreclosure, up from 2.65 percent a year ago on a seasonally adjusted basis, according to the Mortgage Bankers Association’s National Delinquency Survey released Thursday.

The combined percentage of loans in foreclosure or at least one payment past due was 14.41 percent on a non-seasonally adjusted basis, the highest ever recorded in an MBA delinquency survey.

The bankers blamed the high foreclosure levels on unemployment. “Over the last year, we have seen the ranks of the unemployed increase by about 5.5 million people, increasing the number of seriously delinquent loans by almost 2 million loans and increasing the rate of new foreclosures from 1.07 percent to 1.42 percent,” says Jay Brinkmann, MBA’s chief economist.

Brinkmann points out that prime fixed-rate loans represent the largest share of foreclosures and are the biggest driver of the increase in foreclosures.

Home builders and housing analysts mostly shrugged at the high foreclosure-rate information.

“My prediction is we’ll probably recover on a seasonal basis,” Robert Toll, chairman and CEO of Toll Brothers, the largest builder of luxury houses, said yesterday at a conference in New York sponsored by Citigroup Inc. “It’s generally accepted that the homebuilding industry is off the mat and on the road to recovery.”

Josh Levin, a housing analyst at Citigroup Global Markets Inc. in New York, said he expects sales to continue to be slow until January or early February, followed by a surge as buyers try to beat the April 30 expiration of the tax credit.

“The bouncing along the bottom is distorted by government policies,” he said in an interview with Bloomberg News yesterday.

Source: Mortgage Bankers Association (11/19/2009) and Bloomberg, Kathleen M. Howley and John Gittelsohn (11/20/2009)