Brett Palos’ 13,000-square-foot waterfront spec mansion on Miami Beach’s Sunset Island II has been on the market for more than six months, priced at $26 million.

Even in Miami Beach’s ultraluxury, waterfront spec home market — where houses once moved into contract at a feverish pace — it’s possible to have too much of a good thing. It’s the latest sector of the South Florida market to slow down, with new houses taking longer to sell and developers holding off on buying their next parcels.

That means less product in the spec mansion pipeline, and — in many cases — price reductions, developers and brokers said.

Nelson Gonzalez of EWM Realty International estimated that there are about 10 to 15 ultraluxury Miami Beach spec homes on the market now, compared to at least 25 in 2016. “There are not a lot of developers starting new construction as of today,” the broker said. “My sense is that the developers that started homes a couple of years ago are finishing up what they started and putting them on the market, and hopefully selling them.”

Some asking prices are falling and deals can be made, he said. “It is cyclical,” Gonzalez added. “But we are toward the bottom of the cycle and I think in the next year to two years, prices are going to start going up again.” The broker said developers that start building today “will benefit greatly” because of the reduced pipeline.

Gonzalez has had the $18.95 million listing for New York developer Peter Fine’s 6010 North Bay Road mansion since January. Fine, who heads To Better Days Development, which focuses on the Miami Beach waterfront market, also completed 6440 North Bay Road. Though it’s not currently listed, that home has been on and off the market since 2015, initially asking $30.5 million and later $29 million, then $26.95 million. Fine also owns a property at 6342 North Bay Road, which is not yet under construction. He did not respond to requests for comment, but Gonzalez said that like other developers, he is waiting to sell and then will start developing again.

High-end spec home developer Brett Palos is also hitting the brakes. His 13,000-square-foot waterfront spec mansion on Miami Beach’s Sunset Island II has been on the market for more than six months, priced at $26 million. That’s a particularly long time because, he said, he usually sells his homes shortly after completing them, or even before they are finished. The home, at 1600 West 25th Street, has drawn plenty of interest, but no one has yet pulled the trigger, Palos said.

“It’s a slowdown in any urgency people might have had to be a buyer,” said Palos, who heads Brett Palos Investments. “Before, they wanted it before anyone else got it. Now, they appreciate the fact they have more time. They come again and again. There are a lot more third and fourth viewings.”

Buyers of the new, modern, multimillion-dollar mansions are mostly what Gonzalez calls “domestic tax refugees” from places like New York, New Jersey, Connecticut, California and Illinois — states that have an income tax.

Palos is in the midst of completing an 8,000-square-foot waterfront spec home at 5712 North Bay Road in Miami Beach, which will be priced at $16 million or $17 million when it is finished early next year.

He said that at this point he would normally have already purchased another piece of developable land to start his next project, as he likes to have one home completed and ready to sell, one under construction and another in the planning and permitting stages. In that way, he usually sells two homes a year.

But this year is different. “The cycle is going to be slower,” he said. “So when I sell [the Sunset Islands home] and the next one, I won’t have stock for 18 months,” he said.

By that time, he figures, there will be fewer spec homes on the market and more urgency from buyers.

Penciling out a profit

While Gonzalez sees some prices going down, spec developers — with their eagle eyes on profit margins — are loath to offer deep discounts. Builders measure the cost of buying land and construction costs against their desired profit margin of between 30 and 50 percent, and some, like Palos, say they can’t budge on pricing.

“Where people want something, the prices are holding up,” he said. “I haven’t reduced prices, and I haven’t managed to acquire any land that would enable me to produce homes at a different price point.”

Palos said he has tried to buy developable waterfront land, but the prices are too high to be feasible, with costs for design, construction and high-end finishes at upwards of $800 per square foot.

“There’s not too much profit in the business today — we either need to see land prices coming down or finished asset prices going up, because the cost of construction is not going down,” he said. “I got less for the last house I sold per square foot, and I will probably get less for this one than I sold prior. So prices have not gone up in the high end in the last three or four years, but costs have, so it makes it difficult.”

For now, Palos is focusing more of his time developing properties in Europe, though he owns a home on La Gorce Island and said he loves Miami Beach. “I’ll continue to put money into Miami Beach if I can, but it has to be the right circumstances, and at the moment I haven’t come across the circumstances that I am chomping at the bit to put another $20 million into a spec home,” he said.

Developer Ramin Aleyasin, who has focused on waterfront properties on the Venetian Islands, is less concerned about a slowdown. Aleyasin works on one to three spec homes a year, usually completing the process — from demolition of the previous home to completion — in six to eight months.

“If you buy it right and build it right and the location is right — you have to design, build and stage it right — and you do all of that, the market should not affect you as much,” claimed Aleyasin, of Ramin Designs + Development. “You should be able to offload properties.”

He is currently finishing 500 West Dilido, which will be priced between $14 million and $15.5 million and listed with Gonzalez. The broker also partnered on the development and handled the listing for Aleyasin’s spec home at 705 West Dilido, which sold for $4.25 million in March, before it was finished.

He and Gonzalez are also now under contract to buy a home on San Marino Island in the Venetians with plans to tear it down and build on spec. “I think
Miami Beach is extremely undervalued and underpriced,” he said, offering an opinion that some watching the market might disagree with. Waterfront spec homes are selling for $2,200 to $2,600 per square foot, but Aleyasin thinks the range should be up to $4,000 or even $5,000 per square foot in the next five years.

The challenge he sees is a shortage of bayfront tear-down homes on the Venetian Islands that he considers priced right. Prices are currently $4.2 million to $6 million for a 10,500-square-foot lot, depending on whether it is east- or west-facing and its proximity to a bridge.

Ami Shashoua, a tech entrepreneur-turned-spec mansion developer, also plans to continue acquiring and building. His 14,500-square-foot spec home and guest house at 6360 North Bay Road, built by Todd Michael Glaser, has a total of 12 bedrooms and 18 bathrooms and is almost completed. It will hit the market this fall at $32 million.

Shashoua, who sold his tech company Qpay in 2010, sees spec home development as a hobby. “I like the idea of building something,” he said. The slow market doesn’t scare him. In fact, he’s confident enough in the market dynamics that he may not wait for 6360 North Bay Road to sell before he buys more waterfront property. “By the end of the year I will buy one or two more properties in Miami Beach and build more spec homes,” he said.

Peter Fine’s 6010 North Bay Road has been listed for $18.95 million since January

Aside from his home for Shashoua, Glaser is developing spec homes in both Palm Beach and Miami Beach. He is partnering with Stuart Miller, Lennar Corporation’s former CEO and current executive chairman, to build a 27,000-square-foot mansion at 22 Star Island designed by Domo Architecture + Design. The project, expected to be completed in seven months, will be priced at between $69 million to $79 million. Glaser has two more homes under construction in Miami Beach, one at 1635 West 22nd on Sunset Island IV and another at 119 East Second Court on Hibiscus Island.

Spec for less

Meanwhile, the market for “regular” luxury — nonwaterfront spec homes priced at $3 million to $6 million, rather than $15 million or $20 million and more — looks far more promising, developers said.

“You can drive down any street in Miami Beach and there’s a brand-new house being built dry,” said Glaser, who currently has two nonwaterfront spec homes on the market: 5150 Cherokee Avenue, priced at $4.5 million, and 2821 Lucerne Avenue on Sunset Island I, priced at $5.5 million.

“It’s a growing market, it’s a new market,” Glaser said. “It’s a guy who wants a house that is 5,000 square feet, beautiful and brand-new, but doesn’t want to be on the Venetian Causeway and spend $13 million and doesn’t care about being on the water but wants a big house.”

Andi Greenwald, principal of the Greenwald Group who — in partnership with her family — has built more than 20 spec homes, is also focusing on a lower-priced market, in the $2 million to $5 million range. She recently sold the house she built at 5025 Delaware Avenue in Miami Beach for $3.6 million after reducing the asking price from $4.25 million to $3.95 million, according to Redfin.

Beyond Miami Beach, Greenwald is now building spec homes in Coconut Grove, South Miami, Coral Gables and Miami’s MiMo District, including two homes at 3630 Avocado Avenue and 3640 Avocado Avenue in Coconut Grove that are on the market for $2 million each.

She said she hasn’t seen a slowdown in that market, and she’s not holding off on building more homes.

“If you build a nice product in a nice area on a nice street, people are going to want it,” she said. “These things take time. It’s like a surgery. You don’t ask, ‘How long is it going to take?’ Why, do you have somewhere you have to go? You want to do it right.”

Elvis Dumervil in front of his office in North Miami (Credit: Amanda Rabines)

During his 12-year National Football League career, Elvis Dumervil tackled his way to success with teams like the Denver Broncos, Baltimore Ravens and San Francisco 49ers. He signed four multimillion-dollar contracts — but he knew the money and the profession wouldn’t last forever.

“I knew football was a great opportunity, but I knew it was a job, not a career – there’s a big difference,” Dumervil said. “A career is something you do for life. Football, unfortunately, when you get too old, you can’t play the young man’s sport.”

As his football career began winding down in 2015, Dumervil began transitioning into real estate, buying a small multifamily building in Fort Lauderdale. Today, he’s busy establishing a firm footing in South Florida’s real estate game. Dumervil has amassed a portfolio of more than 700 multifamily units, mostly concentrated in North Miami and North Miami Beach, since forming his property management and investment firm Prestige Estates in 2016.

His company focuses on buying and renovating apartment complexes. It’s currently in the midst of completing a two-story multifamily building called Prestige Waterfront, which required a full gut-renovation of its interiors.

“It’s probably the closest I’ve come to development,” Dumervil said.

Rents at his properties range from $1,200 for a one-bedroom to $2,000 for a three-bedroom apartment. Each complex features royal blue doors – a signature of his firm’s projects.

Dumervil, a former defensive linebacker, joins a number of athletes who have moved on to real estate. Though some have become brokers, others like basketball legend Magic Johnson and Maurice “Mo” Vaughn, who founded the real estate company Omni New York in 2003, have entered the investment and development business.

The Real Deal interviewed Dumervil at his office at 14050 Northeast Sixth Avenue in North Miami.  The interview has been condensed for space.

What was your childhood like?

It was different, but sometimes different is OK. Single mom. Youngest of four. Father separated from us when I was three. From there, my mom would work a couple of jobs. It was a great childhood, but we moved around a lot. I lived in Little Haiti, Liberty City, Opa-Locka and different parts of Miami. But we got better every time we moved. That’s where I learned what progress meant.

I know you had a very successful football career, but at what point did you decide to start saving up money to get into real estate?

I remember my first three years in the NFL I was going in debt. In the real world it’s serious money, but when you’re trying to take care of your family and live the lifestyle of an eight-year veteran… I just didn’t know.

Right before the 2009 season, near the end of my third year of a four-year contract, I remember thinking this is my opportunity to get into the big leagues. I went on having my best year ever. I was rewarded a huge contract [$61.5 million, according to spotrac.com] from the Broncos’ owner, and I thought what will I do differently?

Did you have an idea it was going to be real estate?

I always loved Monopoly. I was very competitive. It wasn’t until in Baltimore, around 2014, when I hurt my Achilles — I was out for a year — and I said let me start investing.

You signed four contracts totaling $97.5 million — how much did you save? And how did you start?

Throughout my entire career, I probably saved 80 to 85 percent of it.

I started with a little house that went well. Then I bought a little 37-unit apartment building in Fort Lauderdale that went really bad.

What did you learn about your Fort Lauderdale experience?

I learned it’s hard to manage if you’re not prepared. I had no clue what I was doing. I thought you get your building, just like Monopoly, but Monopoly didn’t teach me you actually have to go in there and do maintenance work. It’s not just about collecting rent. Now you’re dealing with lenders and most importantly people’s livelihoods. It’s one of the reasons why every building that I ever buy – all of them – the first thing we do is put in new windows and A/C.

Is there some sort of crossover between football and real estate?

Real estate is kind of like football, there are so many moving parts. Everybody has their own responsibility, their own jobs, but we all need each other.

And like football, the numbers don’t lie. Either you occupy or don’t. In the NFL you win or lose. Your record is what you are. You can’t say you’re great management with only 80 percent occupancy. The truth is in the pudding, so for me I love the rawness about it. You can’t hide in this business.

Why did you begin investing in North Miami and North Miami Beach?

I always believed in building right in your own backyard. That’s why I say I was blessed to have grown up in Miami and not somewhere like Kansas.

I think people that originally started in North Miami in the 60’s and 70’s were brilliant. The buildings, the architecture of North Miami is beautiful and different. The problem that I think happened was the next generation came in and somehow that vision got lost. And when you don’t [invest] into the building, then people come in and they treat it as such. Now I’m here to say how can we get it back to the original vision.

Andris Pukke and the Sanctuary Belize development (Credit: Google Plus and Belize Real Estate Property for Sale)

Ever fantasize about fleeing the winter cold and getting in on the ground floor of a beachfront real estate deal in which you double your money in a few years? If you’ve dreamed that dream, here’s how it could turn nightmarish.

When Frank Balluff and his wife, Rebecca, purchased a lot in what seemed to be an exciting new Caribbean resort development, little could they imagine what they were getting into. In fact, it was what the Federal Trade Commission now calls the biggest real estate scam involving overseas property it has ever investigated. Promoters allegedly fleeced 1,000-plus lot buyers out of $100 million or more. Earlier this month, the FTC sought and obtained a federal court order temporarily shutting the project down and freezing promoters’ assets.

Balluff, a business owner from Michigan, estimates that his personal losses exceed $310,000, but he says he’s heard of others who “invested their full retirement funds” and planned to build homes and move to the resort. Now “they just have nothing left,” he says.

Balluff and others — mainly Americans nearing retirement age or already retired — bought into a slickly marketed development known variously as Sanctuary Belize, Sanctuary Bay and The Reserve. The 14,000-acre project is located on the Caribbean coast in Belize, an English-speaking nation bordering Mexico.

Through advertising pitches on Bloomberg News, Fox News and infomercials, developers promised purchasers a seductive list of amenities — fine restaurants, a luxury hotel, a world-class marina and shops, a hospital staffed by Americans, a championship golf course, a casino and even an airstrip, according to the FTC. Plus they dangled financial catnip: fat and fast profits if buyers chose to sell their parcels. The promoters pushed on-site tours to people like the Balluffs, who flew to Belize to inspect the property before putting down any money. However, according to the FTC, “many consumers” purchased lots costing $150,000 to $500,000 sight-unseen.

Balluff says he was attracted by the promoters’ innovative “no-debt” approach; unlike most real-estate developers, they wouldn’t depend on lenders to finance their activities. Instead they’d plow sales revenues back into the resort to speed its completion within two to five years.

High on the Balluffs’ priority list was that the project be completed as quickly as promised, because they wanted to build a home and get away from Michigan’s harsh winter weather. When they periodically inquired about progress at the site, they were assured by officials that Sanctuary Belize “would meet its timelines.” But six years have passed, and most of what was promised hasn’t been delivered. Hardly any homes have been built, according to the FTC, and Balluff says the developers seem “to be doing little more than moving dirt around and making excuses for delays.” When buyers ask for the developers to buy back their lots or they stop making payments, the developers refuse refunds and resell the lots to new buyers, the FTC alleges.

But it gets worse. To gather information on Sanctuary Belize, the FTC created a sting operation that involved a fictitious small business whose owners fit the profile of Sanctuary’s target marketing. They posed as purchasers and in the process documented disturbing facts, according to the FTC: The person orchestrating the Sanctuary development, Andris Pukke, is a convicted felon who had been sued by the FTC for consumer fraud in connection with a debt-counseling scheme; Pukke ultimately agreed to forfeit millions of dollars in assets that could be used to refund money to victims. James Kohm, director of the FTC’s consumer protection enforcement division, called Pukke “a hardcore recidivist scammer” who perpetrated the Sanctuary Belize scheme “even while serving a prison sentence for obstruction of justice.”

Sanctuary Belize officials covered up his involvement, according to the FTC, repeatedly lying to buyers such as the Balluffs, who had discovered his connection to the development after their purchase. Neither Pukke nor officials of his company, based in Irvine, California, could be reached for comment last week; the main number for Sanctuary Belize marketing and sales was no longer in service.

Some takeaways? First, the FTC’s allegations and injunction will need to pass further tests in court. Even if successful in permanently shutting down the Sanctuary Belize enterprise, the agency may not recover the funds needed to repay alleged victims. Second, buying into resort land developments — whether in Florida at various times in the past century or in exotic locations like Belize — has always been inherently high risk. You can never do too much due diligence, especially when checking out the promoters.

Loveridge Plantation (Photos courtesy Hall & Hall)

A massive quail hunting plantation in Florida’s Leon County is on the market for nearly $30 million, making it the most expensive ranch property for sale in the region.

The more than 4,500-acre property sits on 1.25 miles of Lake Miccosukee frontage near the Florida-Georgia border. The ranch has 14 quail hunting routes, 10 horses and a dog kennel with 49 dogs, including English cocker retrievers, pointers, derby dogs and puppies, according to the Wall Street Journal.

The main house is almost 5,800 square feet with four bedrooms. The property also has a caretaker’s house and a home for the kennel manager.

The plantation, on the market for $29.6 million, is being sold by the grandchildren of George H. Love, who helped lead both Consolidated Coal and Chrysler to profitability. Love bought the ranch in 1946 from the wife of the late New Jersey Gov. Walter Edge, according to the Wall Street Journal.

The ranch is now owned by Howard Love’s five children, who vacation on the property and also lease it to other quail hunters. [WSJ]  — Keith Larsen

Rendering of Downtown Dadeland

Downtown Dadeland – Midtown Capital Partners | $78.2M

Midtown Capital Partners’ $78.2 million purchase of Downtown Dadeland’s ground floor retail marked the most expensive retail sale in October.

The deal includes about 126,000 square feet of retail space at 7270 North Kendall Drive that’s 97 percent leased to tenants like Pasión del Cielo, West Elm, Orangetheory Fitness, Ghee and Harry’s Pizzeria.

The mixed-use project features more than 400 residences. The seller, a joint venture between Pebb Capital and Duncan Hillsley Capital, still owns the condo portion.

Downtown Dadeland was built in 2008 and renovated in 2015. Pebb Capital and Duncan Hillsley Capital paid $39 million for the property in 2014. It was 50 percent leased at the time. CREC handles leasing at the retail space.

Rendering of a Publix Supermarket

18320 Collins Avenue – Dezer Development | $31.7M

The second priciest deal in October involves Publix and Porsche Design Tower developer Gil Dezer of Dezer Development.

Publix Super Markets sold nearly an acre of waterfront land at 18320 Collins Avenue for $31.7 million to Dezer Development. The deal left Publix with ownership of an adjacent site where it recently renovated one of its supermarkets.

Since Dezer Development also owns land immediately to the north, the company now controls roughly 4.5 acres of land with significant frontage on the Intracoastal Waterway. The deal is an indicator the developer may be embarking on yet another condo project in the area.

Winfield Plaza

Winfield Plaza – Investments Limited | $13.1M

Developer James Batmasian bought a retail strip center in Boca Raton for $13.1 million.

The 30,683-square-foot Winfield Plaza at 515 Northeast 20th Street traded hands for $427 per square foot. The land spans more than 2.8 acres. The property sold 93 percent occupied to tenants including Osha Thai Restaurant, Sweet Deals Chocolates, Subway and Señor Burrito.

The seller is a company led by Giovanni Cannavo, Juan Alvarez and the Panamanian law firm Galindo, Arias & López. Records show the entity, Taormina Investments S.A., spent more than $1.2 million assembling the property between 1978 and 1985.

2200 South Federal Highway

2200 South Federal Highway – HGreg | $11M

Used car dealer HGreg expanded its real estate portfolio when it purchased a former Nissan dealership in Delray Beach for $11 million.

Fort Lauderdale-based AutoNation was the seller. The sale of the dealership at 2200 South Federal Highway broke down to about $230 per square foot.

The 3.76-acre site last sold for $5.2 million in 2005. It was built in 1970 and spans 47,694 square feet.

A 7-Eleven convenience store

7-Eleven Plaza – David K. Hass | $5M

The fifth largest retail sale in October was David K. Hass’ $5 million purchase of a corner lot with retail space near Boca Raton’s Mizner Park.

The nearly 1-acre property features 11,025 square feet of retail space across three, stand-alone buildings on the northwest corner of South Dixie Highway and West Palmetto Park Road.

The seller, WGG Palmetto LLC, is led by Arnold Granet. Records show he paid $2.56 million for the properties in 2005.

The retail space is leased to a 7-Eleven convenience store, a dry cleaners and a number of fast-concept restaurants including Boca’s Best Pizza Bar, Mi Casita Mexican and Pita Principle.

(Credit: iStock)

After Arizona took a hard line on real estate licensing, two companies that work with property rentals have exited the state entirely.

Virtually Incredible, which takes lead calls about leases, and OnSight PROS, which examines apartments to determine how much of a security deposit should be returned, were told their employees would have to get licenses to work in Arizona, according to Inman.

Rather than do that — or go to court to fight the mandate — the companies ceased doing business in the state.

Florida-based Virtually Incredible uses a call center in the Philippines to handle inquiries about rentals. Company officials said it helps answer basic questions and helps keep landlords from getting bogged down with calls that never lead to leases. Serious inquiries are transferred to U.S.-based employees to pursue.

Landlords hire Texas-based OnSight PROS to detail the condition of a rental unit before tenants move in, then again when they move out to determine how much of their deposit money should be returned. The employees are not licensed inspectors.

Arizona officials told both firms that real estate licenses were required to do the tasks in question.

Virtually Impossible founder Todd Breen and OnSight PROS CEO James Alderson said the hard line on licensing will turn off companies that may be interested in investing in Arizona.

Fire pros and landscaping experts are coming up with ways to protect homes from the flames. (Credit: iStock)

A manicured, lush front yard can add a lot to a home’s curb appeal and value. But it can also add fuel to a fire, putting a residence at more risk.

With the latest wave of devastating wildfires burning tens of thousands of acres across the state, fire pros and landscaping experts are coming up with ways to protect homes from the flames.

One place to start would be by creating an open “defensible space” around the home, Robert Walton, who works for the Los Angeles County Fire Department, told the Los Angeles Times.

A defensible space means there are no shrubs or greenery growing against the house. Rather, there should be about five feet of distance surrounding the house, which can be accomplished with concrete walkways.

Drought-tolerant grasses, such as buffalo grass, are also highly encouraged as they serve as a firebreak. Plants that are high in moisture, like succulents, are also a good bet.

What to avoid: flammable plants, such as arborvitae and junipers.

Landscaping isn’t the only option when protecting against fires. The manufacturers behind a building material dubbed RSG 3-D are advocating the product could prevent some of the major destruction caused by wildfires. Its “cementitious sandwich panel” system is more fire-resistant than wood, and has been used in NASA spacecrafts.

In Southern California, the Woolsey fire burning in L.A. and Ventura counties has destroyed 1,500 structures. It was 96 percent contained as of Tuesday. [LAT] — Natalie Hoberman

(Credit: Fast Track, and iStock)

There won’t likely be Black Friday doorbuster deals at most Mattress One stores in Miami-Dade this weekend. Instead, the doors may be padlocked as the mattress retailer has been kicked out of its locations from Midtown Miami to Kendall, according to recent eviction complaints filed in Miami-Dade County Circuit Court.

Comras Company, Jamestown and the former owners of Navarro Discount Pharmacies are among five landlords that have sued Mattress One and its parent S.O.S Furniture since mid-September for failing to pay rent and other alleged violations of rental agreements. Since the beginning of the year, a total of 16 landlords, including New York-based Time Equities and Kimco Realty, have filed lawsuits to evict Mattress One amid internal company strife over allegations of embezzlement.

In a federal lawsuit filed in Tampa, three of the company’s owners accuse their brother, Morad Salem, of stealing $273,592 in corporate funds since 2017 and refusing to repay a $250,000 company loan that was due in 2017.

Attorneys for Mattress One, Comras, Jamestown and Marcel and Gabriel Navarro did not respond to messages seeking comment. Court documents show Mattress One owes a combined $325,176 in rent to the five landlords that filed suit since mid-September. The breakdown as follows:

• On Sept. 18, Sunshop Properties LLC, which is owned by the Navarros, sued Mattress One for failing to pay $3,213 to reconcile unpaid trash and maintenance charges and for not providing the landlord monthly sales reports. Sunshop claims it is also owed $106,440 in future monthly rent payments. Mattress One had a five-year lease that expires on June 30, 2019, for 7,597 square feet at a Sunshop-owned shopping center at 10755-10805 Southwest 72nd Street in Miami. On Oct. 30, Sunshop won a court order to retake possession of the store.
• On Oct. 16, The Q.V.H. Corp. sued Mattress One for failing to make its rent payment of $11,603 that month. The mattress company had a five-year lease that expires in April 2021 for a 3,000-square-foot standalone store in a shopping plaza at 8200 Flagler Street in Miami. On Nov. 1, Q.V.H. won a court order to retake the property.
• On Oct. 27, Comras sued Mattress One and S.O.S. for failing to pay rent for seven straight months beginning in June for a total of $78,279. Mattress One signed a five-year lease in July 2016 for a 2,811 square-foot store at 3160 North Miami Avenue in Miami. The monthly rent began at $10,541 a month and increased 3 percent every year after.
• On Nov. 7, Red Road Inc. sued Mattress One for failing to make its monthly $6,687 rent payment. The mattress retailer signed a five-year lease on June 2017 for its location at 18355 Northwest 57th Avenue in Miami.
• On Nov. 8, Georgia-based real estate investment firm Jamestown sued Mattress One for $120,623 in unpaid monthly rent. Mattress One signed a five-year lease on June 27, 2016 for a space at Doral Commons shopping center at 7586 Northwest 104th Avenue in Doral. Jamestown acquired the commercial retail plaza from Terra for $71.6 million earlier this year.

It’s been a rough year for mattress sellers. Mattress Firm filed for bankruptcy and last month announced it was closing 10 Florida stores, including two locations in Miami and one in Fort Lauderdale.

Pordes Residential showcases Kai at Bay Harbor

After taking over sales at the Kai at Bay Harbor development, Pordes Residential hosted a rooftop event to showcase the remaining inventory at the Bay Harbor Islands project.

The 57-unit boutique development at 9940 West Bay Harbor Drive was designed by Arquitectonica and developed by Land Developers Group.

CREW-Miami hosts networking and fundraising event

Commercial Real Estate Women Miami held its annual fundraising event in downtown Miami.

More than 100 commercial real estate professionals in South Florida attended the event at Miami Tower’s Sky Lounge in support of CREW-Miami scholarships.

Miami skyline (Credit: MaxPixel)

Residential sales across South Florida were up in Miami-Dade, Broward and Palm Beach in October, with condo closings rising roughly 20 percent in each county.

Increases in both home sales and median prices last month were due in part to heightened demand spurred by concerns of rising interest rates, according to the Miami Association of Realtors.

Miami-Dade

Residential closings rose nearly 15 percent year-over-year in Miami-Dade County to 2,284, marking the fourth consecutive month of sales increases. Condo closings jumped 21.3 percent to 1,211, with the bulk of deals occurring in the $150,000 to $400,000 range.

Sales of single-family homes increased 8.1 percent, up to 1,073. The majority of deals were for homes in the $250,000 to $600,000 range. Overall sales volume totaled $949 million in Miami-Dade.

The median price of single-family homes increased 2.9 percent to $350,000, while condo prices rose 8.7 percent to $235,000.

A recent report found that Miami homes sat on the market for an average of 84 days, one of the longest periods in a survey of 53 U.S. metros. But according to the Miami Association of Realtors, the median number of days between listing and contract for single-family homes was 43 days, an 8.5 percent drop from the previous October.

Broward

Residential sales were up 15.1 percent year-over-year in October to nearly 2,800 sales totaling $918.5 million. Condo sales surged 20 percent to 1,476, while single-family home sales rose 10.1 percent to 1,322.

The sweet spot for condo sales was the $200,000 to $400,000 sector with 436 such sales in October, while for single-family homes, closings rose thanks to a nearly 33 percent increase in sales in the $400,000 to $600,000 price range.

The median price increased for condos – up 1.3 percent to $157,000 – and single-family homes, which jumped 6 percent to $355,000.

Palm Beach

Overall residential sales in Palm Beach County continued to perform well last month. Condo sales surged to 1,074 closings, up 19.2 percent compared to the previous October. Single-family home sales jumped 15.6 percent to 1,458.

The bulk of condo sales in Palm Beach County were for units priced from $50,000 to $250,000.

Median prices are still trending upward – rising 9.5 percent to $185,000 for condos and 6.8 percent to $347,250 for single-family homes.

222 and 298 Lincoln Road

Two retail properties along Lincoln Road in Miami Beach are up for grabs.

The two 8,000-square-foot retail buildings, at 222 Lincoln Road and 298 Lincoln Road are owned by the Wexler family. The properties are part of a larger 25,600-square-foot retail development, built in 1946, that is currently anchored by the Alvin’s Island beachwear shop.

Marcus & Millichap’s Institutional Property Advisors has the listing for the two buildings, with a call to offers beginning Wednesday. The minimum bid is set at $6.5 million, each.

The properties are located between Collins Avenue and Washington Avenue and sit on either side of a newly renovated retail building anchored by Ross Dress For Less. Each features about 40 feet of frontage on Lincoln Road.

The property at 222 Lincoln Road is a vacant two-story, office/retail building. Its sister property, at 298 Lincoln Road, is subject to a 99-year ground lease that expires in June 2044 and is sub-leased to Audio Camera Electronics. The land lessee pays an annual rent of $440,000 per year, in addition to other expenses, according to a press release.

Marcus & Millichap’s Drew A. Kristol said 222 Lincoln Road could be leased out as up to three spaces. Kristol and Kirk Olson are representing the seller.

The buildings may be purchased together or separately, according to the release.

The leasehold interest for the entire property has been on-and-off the market since 2016. Earlier this summer, the Wexler family put it back on the market with plans designed by architect Kobi Karp for a 99-key hotel with about 18,000 square feet of ground floor retail.

822 South County Road and John D. Idol

Michael Kors’ chairman and CEO just picked up a waterfront mansion in Palm Beach for $21.16 million.

Property records show M&M Palm Beach Property Investors sold the seven-bedroom, 8,973-square-foot home at 822 South County Road to John D. Idol. Idol has led the luxury fashion retailer since 2003, when he and Hong Kong-based private equity firm Sportswear Holdings bought the business for $100 million. He has been chairman since 2011, according to Business of Fashion. He earned $7.6 million this year.

The seller of the Palm Beach home is managed by attorney Ronald S. Kochman. The property last sold for $13.1 million in August 2017. Charlene Nederlander, who was married to the late Broadway titan James “Jimmy” Nederlander, sold the circa-1940 home last year.

The 0.75-acre property includes a two-bedroom guest home with its own pool, one of two. The Georgian-style house was designed by famed architect Maurice Fatio and features floor-to-ceiling windows, wood floors, a dock and 100 feet of frontage on the Intracoastal Waterway.

The town granted the house landmark protection in 1990, according to the Palm Beach Daily News.

Bidding wars for property in Seattle appears to have declined during Amazon’s search for a new headquarters. (Credit: iStock)

In the wake of Amazon’s recent decision to split its second headquarters among two East Coast  locations, brokers and residential sellers in the e-commerce giant’s Seattle home are moving aggressively to lure tenants and buyers.

Landlords had already spent the last six months offering perks such as Amazon gift cards and free rent, as the company ramped up its marketing campaign and a nationwide search for HQ2, according to the Wall Street Journal. Bidding wars for property in Seattle appears to have declined during that time, the Journal reported. In addition, high interest rates and prices have led to the slowest median growth in the city since January 2013.

That stands in stark comparison to the last eight years, which has seen Seattle housing market prices increased close to 50 percent, as Amazon’s employee based there expanded to 45,000.

Meanwhile, as Amazon prepares to expand to New York City and Washington, D.C., so too may its prospective employees. Zillow reportedly found online listings searches in Queens’ Long Island City and Virginia’s Crystal City areas increased four times on the day of Amazon’s announcement.

Only half of the expected 25,000 jobs that Amazon would bring to Long Island City will be technology-related, the Journal reported. The other half will be administrative, human resources and custodial roles.

The company has already entered a letter of intent to lease approximately 1 million square feet of office space at Savanna’s One Court Square. And in Crystal City, the location will be transformed into something of a company town. Amazon has signed a 500,000 square feet lease at JBG Smith’s 241 18th Street, 1800 South Bell Street and 1770 Crystal Drive properties. Amazon will also purchase several development sites from JBG, totaling 4.1 million square feet of buildable space.  [WSJ] — David Jeans 

Airbnb says it has eliminated 200 listings in the West Bank. (Credit: iStock)

Airbnb has decided to remove around 200 listings in Israeli’s disputed West Bank, and the Israeli government is crying foul.

The home-sharing giant said it was eliminating around 200 listings in the Israeli settlement, according to Reuters. Palestinians who support an independent Palestinian state welcomed the move, while Israel called it a “wretched capitulation” to boycotters.

“We will approach the U.S. government because 25 U.S. states have sanctions against American companies that boycott Israel,” said Strategic Affairs Minister Gilad Erdan.

U.S. law does not bar companies from doing business in disputed Israeli-Palestinian territories, but activists have previously pushed Airbnb to pull its listings in Israeli settlements. Most governments consider the settlements — which now number around 126 — to be illegal.

Airbnb said it had drawn a framework for dealing with listings in disputed regions. The framework includes consultation with experts and stakeholders and an assessment of safety risks in the areas. It also makes a determination of whether listings have a “direct connection to the larger dispute in the region” and whether they are “contributing to existing human suffering.”

Airbnb did not say where else it has applied the framework. The Israeli Ministry of Tourism is looking at ways, including taxation, to restrict Airbnb in the country.

Airbnb is readying to go public by late 2020 , CEO Brian Chesky said in February. That statement came a year after he said  the company wanted to be ready for an initial public offering by the end of 2018. [Reuters] — Dennis Lynch 

The Massachusetts Museum of Contemporary Art (Credit: Getty Images)

They say artists find the hot neighborhoods first. But it turns out, art museums are pretty good for real estate values, too.

In cities around the world, new museums are bolstering real estate prices thanks to buyers who want to live near cultural landmarks. And new museums also bring corporate employees and tourists to the local retail and restaurant scene.

In fact, Stephen Sheppard, an economics professor at Williams College, told the Wall Street Journal that new museums can boost property values by 20 percent to 50 percent within five years.

In Chattanooga, Tenn., that’s what’s happened to homes near the Hunter Museum of American Art. The average sale price for properties within three-quarters of a mile of the museum was $573,000 in July 2018, up from $271,000 in 2016, according to the local multiple listing service.

Meanwhile, in the Berkshires, out-of-state buyers are jockeying for property near the Massachusetts Museum of Contemporary Art.

Although the most expensive homes cost near the museum go for around $250,000, time on the market dropped to 98 days in 2018, from 256 in 2016. “Anything within walking distance to Mass MoCA is exploding,” said Kim Burnham, a local agent. [WSJ] — E.B. Solomont

(Credit: iStock)

It’s a rough time to be a small mortgage firm.

The companies are cutting staff, shutting down and trying to sell themselves. It’s yet another sign of increasing pressure on the housing market due to rising interest rates and the maturation of a long economic expansion, according to the Wall Street Journal.

The number of nonbank mortgage lenders dropped by around 3.5 percent halfway through 2018 when compared to the end of 2017, and mortgage-loan-originators at the companies declined by more than 11,000, according to the Conference of State Bank Supervisors.

Relying heavily on mortgage refinancings, nonbank lenders had grown for several years prior to this, taking mortgages away from traditional banks by being able to move faster and occasionally having a better knowledge of the local markets. Industry experts now expect their ranks to continue shrinking moving forward, given that rising interest rates will continue to make it more expensive to buy a home and dry up the mortgage refinancing business.

Housing sales are slowing down as well thanks to concerns about affordability and increasing prices for labor and materials, which is slowing down the number of projects going forward.

Lenders are trying to navigate the new landscape using tactics like selling their mortgage-servicing rights or lending to borrowers they would have previously overlooked. Dan Gilbert, chairman of the largest nonbank lender Quicken, told the Journal that purchase mortgages are becoming more central to the company’s business.

“Rising rates are headwinds to us,” he said. “When rates go low, there are tailwinds. But either way the plane has to fly.” [WSJ] – Eddie Small

Clockwise from top left: Apollo plans to raise at least $1 billion in its third U.S. real estate fund, ‘Unlikely’ secondary markets are drawing money from foreign investors, Compass hires a new CFO to oversee ‘hypergrowth’ amid nationwide expansion, and cities that weren’t chosen for Amazon’s HQ2 experience a range of emotions.

Apollo plans to raise at least $1B in its third U.S. real estate fund
Buyout giant Apollo Global Management hopes to raise at least $1 billion for a new real estate investment fund that will focus on retail and industrial properties, senior housing, and hotels, Bloomberg reported. This would be the firm’s third real estate fund in the U.S., sources told the outlet, and fundraising would launch at the beginning of next year. Apollo recently bought the Holiday Inn San Francisco near Fisherman’s Wharf from RLJ Lodging Trust, and the publicly traded alternative asset manager is looking to unload a portfolio of single-family rental homes, according to Bloomberg. The outlet noted that the Apollo unit containing its real estate arm “had $15.4 billion under management as of Sept. 30.” [TRD]

‘Unlikely’ secondary markets are drawing money from foreign investors
Foreign investors are turning to “unlikely” markets to avoid increasingly high prices in major cities like Los Angeles, Miami, and New York City, according to Bloomberg. Investors from Canada, China, and Germany have in the past year set their sights on cities such as Denver, Philadelphia, Phoenix and the Atlanta suburbs. “Yield is king and yield is now being found in less-usual suspects,” Spencer Levy, Americas head of research at CBRE, told the outlet. Levy added that “[s]ome of the usual suspect central business district markets are later in the cycle.” Nevertheless, New York and Los Angeles still saw billions of dollars in foreign investment within the last year. [TRD]

Cities snubbed for Amazon’s HQ2 experiencing a range of emotions
When Amazon earlier this month made Long Island City and Crystal City its official choices for a halved second headquarters, the decision meant cities like Austin, Chicago, Dallas, Miami, and Newark that had been seen as top contenders for HQ2 were officially out of the running. TRD checked in with officials and developers in those cities, and their reactions to the news ran the gamut from disappointment to acceptance and relief. Chicago Mayor Rahm Emanuel, for one, said he felt that the Windy City “has won more than it has lost.” In Newark, meanwhile, one residential developer said he felt the company had “made a mistake.” [TRD]

Compass hires new CFO to oversee ‘hypergrowth’ amid nationwide expansion
Compass has hired Carlyle Group executive Kristen Ankerbrandt as its new chief financial officer, eight months after its former CFO left the firm — a move Compass maintained was “mutually decided.” Ankerbrandt, who led technology investments for Carlyle’s $18.5 billion fund, is going to oversee the “next stage of hypergrowth” at Compass, CEO Robert Reffkin said in a statement. Before her time at Carlyle, Ankerbrandt worked at Goldman Sachs. Compass has been rapidly expanding, having acquired independent Washington, D.C.-based brokerage Wydler Brothers Real Estate in November, a move that came a little less than a year after it secured a $450 million investment from Japan’s SoftBank. In September, SoftBank’s Vision Fund led a $400 million fundraising round by Compass. [TRD]

MAJOR MARKET HIGHLIGHTS

Kushner Companies buys Manhattan hotel known for noise complaints
Former Wall Street lawyer Paul Stallings has sold the Hotel on Rivington, an establishment on Manhattan’s Lower East Side that’s garnered myriad noise complaints, to Kushner Companies, the New York Post first reported. The 20-story hotel, which opened in 2004, has reportedly received more noise complaints than any other hotel in its precinct area, but its new owner was interested in the property anyway. “This was Joshua [Kushner’s] call,” a source told the Post, noting that his brother Jared is “busy in Washington.” Kushner Companies, which has found itself in the spotlight thanks to its ties to the White House, plans to renovate the hotel to bring it up to the standard of its competitors. [TRD]

Developer selling Miami Beach condo he bought on a whim for $15.3M
A real estate developer is selling his Miami Beach condo after admitting that buying it was an “impulse buy.” Edward Minskoff bought the Faena House residence for $15.3 million in 2015 and is now seeking $16.5 million for the condo. He told Mansion Global he regrets purchasing it because he doesn’t stay in Miami often, instead mostly dividing his time between Malibu and New York City. Minskoff is one of several investors who’ve parted ways with their Faena House properties amid a soft condo market in the Miami area. [TRD]

Chicago’s housing market saw its best month in 12 years in October
October was the best month Chicago’s housing market has experienced since before the recession, according to a new report from Re/Max Northern Illinois. The median home sale price in the metro area increased 3 percent year-over-year, to $230,850, with 8,896 homes sold. Those numbers compare to October 2006, when 9,044 homes were sold with a median price of $244,900. Last month’s average market time for homes sold was 72 days, a figure that stood at 94 days in October 2006. “Overall, it’s fair to say that this October is better than any we’ve seen since 2006,” Re/Max Northern Illinois Region vice president Jeff LaGrange said. [TRD]

Attorney for Stormy Daniels is reportedly evicted from his office building
Michael Avenatti’s law firm has been evicted from its Newport Beach office building, according to the Los Angeles Times. Avenatti’s firm reportedly owed $213,254 in rent payments, and a judge ordered the firm to vacate. Avenatti, however, claimed the firm that was handed the vacate order, Eagan Avenatti, is actually owned by a new owner. Avenatti, who once owned the Tully’s Coffee chain, told the newspaper that he is only affiliated with his current firm, Avenatti & Associates. “Eagan Avenatti, my former firm, was already in the process of moving. A non-event,” he told the outlet. [TRD]

Sin City realtors association reverses course to end listing syndication backlash
Earlier this month, the board of directors for the Greater Las Vegas Association of Realtors said it would no longer automatically send its members’ listings to Zillow, ListHub and other portals. But within a week, the trade group backtracked after the move elicited “concerns this month from many of its members,” Inman first reported. “We believed this was the right decision, but we have since heard from some of our members who expressed concern that this change could have created a hardship for them and may have the potential to detract from the way they currently do business,” GLVAR president Chris Bishop said in a statement. [TRD]

Startup company building giant co-living project in San Jose
A San Francisco-based startup called Starcity plans to launch what it claims is the largest co-living project of its type in San Jose, Business Insider reported. The project, which is slated to open in 2021, would have 800 bedroom-only units, in addition to communal kitchens, living rooms, and bathrooms. Rents will likely range from $800 to $2,500 per unit, and amenities will include utilities, home cleaning, and a laundry service. Starcity recently launched a co-living project in Los Angeles in partnership with Worthe Real Estate Group. [TRD]

Jay Jacobson (Credit: MultiHousing News)

A Coconut Grove-based developer proposed replacing a shopping center in Tamarac with 212 apartments.

Eden Multifamily LLC, led by its president Jay Jacobson, wants to build the apartments on the site of the shopping center at the northeast corner of West McNab Road and North Pine Island Road.

The Sun-Sentinel also reported that the owner of the Tamarac shopping center, called Colony West Shopping Plaza, demolished much of the property in 2016 instead of resolving building-code violations by repairing it.

Eden Multifamily proposed building a pair of four-story apartment buildings on the six-acre site.

The apartment development would be called Eden West and would have 31 studio units, 65 one-bedroom units, 86 two-bedroom units and 30 three-bedroom units.

The apartments would range in size from 586 square feet to 1,388 square feet.

Kathleen Gunn, assistant city manager of Tamarac, told the Sun-Sentinel that Eden Multifamily plans to meet with owners of nearby homes on Nov. 27 before presenting the proposed apartment project to the city’s Development Review Committee.

The Colony West Shopping Plaza is well known as the former location of Tamarac’s first public library, which opened in 1977 at 8601 West McNab Road.

Broward County closed the popular library in 2004, and without the crowds it attracted, business conditions at the shopping center declined. [Sun-Sentinel] – Mike Seemuth

Arcadia Commons rendering (Credit: Sun-Sentinel)

Plans to build an age-restricted apartment complex in Palm Beach Gardens are pending a proposed rezoning.

Troy, New York-based United Group of Companies plans to build 220 apartments for tenants age 55 and older.

United Group wants to build the apartments on the 11-acre site of the Amara Shrine Center at 3650 RCA Boulevard in Palm Beach Gardens.

The Palm Beach Gardens City Council is scheduled to vote Dec. 6 on the planned apartment project and a proposal to change the zoning of the development site from commercial to residential.

The apartment complex would be called Arcadia Commons and would have one-, two- and three-bedroom apartments. Each apartment would have a washer and dryer and a screened-in porch.

Common-area amenities at Arcadia Commons would include a swimming pool, an outdoor kitchen and fire pit, a dog park, and bocce, croquet and pickleball court, plus a 15,000-square-foot clubhouse with a gym and a commercial kitchen.

If the $60 million development is approved, United Group would start construction in late spring or early summer and would complete it in early 2021, according to project manager Tim Haskins of United Group. [Palm Beach Post] – Mike Seemuth

Sunset Colony Mobile Home Park (Credit: Brittany Wallman | Sun-Sentinel)

Houston-based Morgan Group Inc. plans to build a 276-unit housing complex on the site of a mobile home park west of Interstate 95 along Broward Boulevard.

Fort Lauderdale city commissioners unanimously voted to allow denser residential development at Sunset Colony Mobile Home Park.

Morgan Group has a contract to buy the 11-acre mobile home park from Clarkson-Bergman Family Partnership.

The Houston-based company plans to build a complex of six residential buildings as tall as four stories on the 11-acre site of the mobile home park.

Sunset Colony Mobile Home Park has 110 manufactured homes and is located behind a Walmart Supercenter department store at the intersection of Southwest 27 Avenue and West Broward Boulevard.

Most of the manufactured homes are owned by the park owner and rented on a month-to-month basis to tenants.

The park tenants will be given at least four months to relocate, according to Robert Lochrie, an attorney representing Morgan Group. [Sun-Sentinel] – Mike Seemuth