Marco Laureti (Credit: Getty Images)

Marco Laureti did the crime and now he will do serious time.

Convicted of leading a $20 million mortgage fraud scheme in South Beach and Fort Lauderdale, the former mortgage broker, lender and real estate agent has been sentenced to 15 years in prison.

A federal judge handed down the sentence Wednesday, which included five years of supervised release, the Miami Herald reported. Laureti must also pay $8.3 million in restitution.

In November Laureti was found guilty of one count of conspiracy to commit wire fraud and seven counts of wire fraud regarding a loan he took out from Washington Mutual, the now defunct bank. He and three accomplices falsified mortgage loan applications on luxury condos, prosecutors charged.

Authorities said Laureti, former publisher of the now-defunct Spanish newspaper “El Popular” and CEO of Network Real Estate Advisors, used proceeds from the scam to buy a $6.9 million mansion in Miami Beach. [Miami Herald] — Amanda Rabines

1730 Bay Road

Deco Capital Group has closed on the missing piece of its Sunset Harbour assemblage with plans to submit a new proposal to the city of Miami Beach for a mixed-use project.

The company, led by developer Bradley Colmer, paid $3.53 million for the Bay Road Animal Clinic building at 1730 Bay Road last week. “The original plan required additional height. We didn’t have this lot, which forced everything to the Purdy [Avenue] side,” Colmer said. Now the company is working on a new design.

The new plans will include more than 20,000 square feet of retail space, parking and about 12 residential condos. The proposal, which Colmer plans to submit at the end of the month, won’t require a request for variances and will stay within the allowed heights and setbacks. Domo Architecture and Design is the project architect.

In 2015, the developer withdrew its height increase request after it was unable to reach agreements with residents living at the adjacent Lofts at South Beach Condominium — some of whom would have their bay views blocked by the new building — and with Beach Towing, which holds a deed restriction that it says prevents parking on property previously owned by the towing company. Deco Capital also went to court alleging that Beach Towing was operating illegally, a claim based on Beach Towing allegedly not receiving the proper permits to operate a tow lot prior to a 1989 zoning change that prohibited two lots from operating at its location on Dade Boulevard.

About a year ago, Miami Beach commissioners again rejected a proposed height increase for the development, known then as Sunset Harbour Residences, at 1733-1769 Purdy Avenue. New York-based RWN Real Estate Partners, backed by billionaire Marc Rowan, is a majority partner in the project.

Susan Gale, a commercial agent with One Sotheby’s International Realty, was hired to sell the “missing piece” about six months ago by the seller, James Dougan. He’ll continue to operate the animal clinic for a few months, Gale said.

Records show Duggan paid $180,000 for the 3,750-square-foot lot in 1996. It includes a 2,115-square-foot building.

Dougan’s property had actually been for sale for about four years, Gale said, but “there was no meeting of the minds” between Deco Capital and the seller – until recently.

“It was a roller coaster, crazy kind of deal that we didn’t think was ever going to close,” she said, calling it “a really difficult property to sell to anybody else.”

The developer’s LLC is still in litigation with Beach Towing, which Colmer declined to comment on. “Realistically I don’t think we would be breaking ground until some time in 2019,” he said.

Kenneth Harney

They are gnawing questions that many homebuyers inevitably ponder: What are my chances of getting the house I’ve fallen in love with at a price I can afford, which happens to be well below what the seller is asking? What are the odds that pesky contract contingencies, such as mortgage financing or the appraisal, could jeopardize my good deal?

Sellers have different concerns: What are the chances that I could actually get a higher price than what my cautious realty agent has persuaded me to offer? Might I have to throw in costly incentives to attract a buyer or — horrors — slash my price?

A new survey of 4,283 members of the National Association of Realtors offers some valuable insights, no matter what side of the deal you’re on.

Take pricing. Except in a handful of superheated markets where few houses are available for sale, the odds are strong that you as a buyer will be able to get the house you want for less than the list price. Just 34 percent of agents in the survey reported sales above or at the original asking price. So you’re probably more likely to write a successful below-list contract than you assume.

What about sales incentives — the sort of financial goodies that sellers throw into the pot to sweeten the deal? Are they commonplace? You might think so, but statistically they are not. Barely 20 percent of sellers offered any sweeteners whatsoever, according to the survey. Typically they involved the seller paying for some of the buyer’s closing costs or fronting the premiums for home warranty insurance coverage. Another concession: Sellers agreed to set aside money to remodel the kitchen or a bathroom to the buyer’s specifications. But overall, 80 percent of sellers opt to avoid concessions. If there needs to be a cost adjustment, presumably they prefer simply to subtract it from the price they’re asking.

Sales contract contingencies are another key factor in your transaction. But here’s a surprise: Though they are boiler-plate standard in many local realty contracts, large numbers of final contracts end up with none. No language requiring the buyer to obtain a mortgage commitment within a specified time, no requirement regarding appraisal, not a word about an inspection.

Twenty-one percent of contracts covered in the survey were contingency-free. That’s an eye-opener because contingency clauses can be crucially important for buyers and sellers. Say you sign a contract on a home that looks great but has defects you missed — the roof is 10 years beyond its economic life, the plumbing is a disaster waiting to happen. Without an inspection clause, you may have no escape hatch out of the deal and no way to argue for a lower price.

Why do buyers agree to contracts like this? The survey provides no details, but there are several possibilities: Multiple bids on the house can push buyers to offer “clean” contracts; all-cash or distress sales may require the buyer to take the house “as is”; and some sellers may simply voluntarily waive certain contingencies.

But most buyers and sellers are smart: 75 percent of all final contracts include at least one contingency clause; 55 percent require a home inspection (still surprisingly low); and 43 percent have mortgage contingencies.

How about your prospects of going to settlement on time — or worse yet, having your sale blow up before or at closing? A few years ago, delays and cancellations were shockingly common, but in the latest survey things look much better. Seventy-one percent of sales settled on schedule in December, while 25 percent encountered delays but eventually went to closing.

What caused the delays? Buyers’ inability to obtain the mortgage they wanted topped the list, accounting for 31 percent of all delays. Examples might include glitches that turn up in the buyers’ credit files or the discovery of previously undetected liens or judgments that must be resolved before the lender could commit to the mortgage. Appraisal issues triggered 16 percent of all delays, home inspection disputes another 12 percent.

But here’s a really encouraging statistic: Total blowups are way down from where they were a couple of years back. During early 2015, between 9 and 10 percent of all real estate contracts were canceled before final settlement. Today that’s down to just 4 percent.

In the often contentious and complicated world of real estate, that passes for great news. Buyers and sellers are working out their problems … rather than walking away.

London

The UK may have voted to leave the European Union, but Mayor Sadiq Khan of London is doing everything he can to ensure that London remains a global city. According to Airbnb, his efforts are working.

After the so-called Brexit vote on June 23, Khan launched a global campaign to attract visitors and investment in the nation’s capital.

The mayor’s #LondonIsOpencampaign has backers including Prime Minister Theresa May, former Mayor Boris Johnson, celebrities like Jude Law and One Direction, and companies like Google.

Whether its the London is Open campaign, or just that the British pound plunged in the wake of the Brexit vote — making travel to the UK cheaper — people are coming.

In a Thursday statement, the room-rental company Airbnb reported a 24% increase in London visits since the Brexit referendum. These visitors are coming from more than 164 countries, and have made London the third-most-popular city in the world for Airbnb guests.

Since the Brexit vote, Britain’s sharing economies have actually grown faster than in the rest of Europe, according to research released by PwC. The UK’s sharing-economy sectors could see a 20-fold increase to £140 billion by 2025, up from £7 billion today.

“We have something for everyone, and as the mayor of this fabulous city, I am delighted to hear that Airbnb hosts are continuing to welcome guests from hundreds of countries,” Khan said in Airbnb’s statement.

MEI Condominium

UPDATED Aug. 15, 5:25 p.m.: Eight years after the MEI Condominium in Miami Beach was completed, the building’s owners are looking to collect $4.8 million in insurance bond funds from a subcontractor that allegedly didn’t finish the job.

In a lawsuit filed in Miami-Dade Circuit Court last month, the MEI Condominium Association accuses Miami-based RC Aluminum Industries and its insurance carrier, Liberty Mutual Insurance Company, of breach of contract by not paying the bond.

Stevan Pardo

“We look forward to working with Liberty Mutual to get the problems fixed and resolved as soon as possible,” said Stevan Pardo, the association’s lawyer told The Real Deal. Representatives for RC Aluminum did not return a phone message seeking comment.

According to the lawsuit, MEI developer PMG Collins, a company owned by Property Markets Group, terminated Telesource Group, the project’s original general contractor, and its subcontractors, including RC, in 2008. The building, at 5875 Collins Avenue in Miami Beach, was finished by Gryphon Construction. Since Telesource and RC had not fully completed the work, neither firm was paid in full, the lawsuit states. The 22-story MEI tower has 134 units including eight penthouses.

Shortly after PMG turned over control of the project to the association, an engineer conducted inspections of the building that discovered “latent defects” in the windows and sliding glass doors that are not easily recognizable or are hidden by finishes.

In 2012, the association reached out to PMG to correct the defects, the lawsuit states. Miami-Dade County court records also show the association sued PMG the same year, but that lawsuit was voluntarily dismissed in 2013.

Two years ago, PMG and Telesource agreed to transfer the rights for two performance bonds issued by Liberty Mutual to cover the work to be performed by RC as part of a settlement with the association, the lawsuit states. One bond was for $4.15 million and the second bond was for $689,475.  

The association claims RC and Liberty Mutual have breached the contract requiring the bonds be paid to the homeowners’ group.

Miami-Dade County’s market continued its slow-but-steady pace during the second week of August, with a handful of multimillion dollar deals rounding out an otherwise average seven days.

At the top of the list was a unit at Beach House 8, Ugo Colombo and Valerio Morabito’s newly built boutique condo project in Mid-Beach. Unit 600, which spans a whole floor, traded for $7.5 million to a European businessman. Douglas Elliman’s Chris Leavitt, who represented the buyer, said he’s planning to use the four-bedroom, four-bathroom unit as a pied-à-terre. Measuring 3,783 square feet, the prices breaks down to $1,982 per square foot. Daniela Bonetti of ONE Sotheby’s International Realty represented the developer.

In second place was Penthouse 3105 at the Peninsula II building in Aventura, which sold for $2.8 million after spending 378 days on the market with Douglas Elliman’s Chad Carroll. The unit features six bedrooms, six bathrooms, an open floor plan and bay views through floor-to-ceiling windows. The deal breaks down to $506 per square foot.

And the third-priciest deal, coming in at $2.2 million, was for unit 202 at the One Bal Harbour tower in its namesake village. Mother and daughter duo Jill and Hillary Hertzberg from Coldwell Banker had the two-bedroom, two-bathroom unit on the market for 264 days before it closed at $1,150 per square foot. It boasts modern finishes, a chef’s kitchen and direct ocean views.

After those top three deals, last week’s top 10 priciest condo sales ranged from $2.1 million to $825,000.

Miami-Dade saw 119 condos sell for a total of $50.27 million. That’s a considerable jump in transaction volume from the previous week’s $40 million haul, though it’s still relatively low compared to several blowout weeks in previous months that saw sales reach as high as $90 million. Average sales were $422,519 per unit and $287 per square foot.

Here’s a breakdown of the data for the week of August 7 to August 13. Click on the map for more information:

Most expensive
Beach House 8 #600, Miami Beach | $7.5M | $1,982 per square foot | Daniela Bonetti of ONE Sotheby’s International Realty

Least expensive 
South Pointe Tower #309, South Beach | $825,000 | $868 psf | 68 days on market | Michael Feuling of Miami Investment Property

Most days on market
Atlantic One at the Point #1004, Aventura | 481 days on market | $1.275M | $401 psf | Mariana Solano of RSVP Homes Realty

Least days on market
Ocean Place #8i, South Beach | 62 days on market | $1.4M | $1,292 psf | David Pulley of Douglas Elliman

Downtown Miami skyline (Credit: Miamiism)

While the volume of Miami-Dade County home sales continued its sharp fall during this year’s second quarter, prices seem to be going nowhere but up.

According to a new report from the Miami Association of Realtors, the second quarter marked four-and-a-half years of uninterrupted price appreciation for homes and condos in the county.

The latest numbers show median prices for a condo rose 5.5 percent year-over-year to $215,000, and single-family homes jumped 8.6 percent to $295,000.

As analyst Anthony Graziano of Integra Realty Resources has told The Real Deal in the past, much of that appreciation can be considered “value recovery” from when prices bottomed out during the housing bust.

But those growing home values have also raised heated debate over the lack of affordable housing in Miami-Dade, with some market watchers saying the issue has reached crisis levels.

Meanwhile, the pace of sales in Miami-Dade is downshifting from years of overheated activity. The association’s figures show 3,626 homes were sold in Miami-Dade during the second quarter, falling 7 percent from the 3,900 sold during the same period of last year. Condo sales fell even further, with the second quarter seeing a 12 percent decline from 1,576 units to 1,487.

Inventory is also starting to pile up. There were 6,292 active single-family home listings in the second quarter, up 10.7 year-over-year. Condo supply exploded by 18.6 percent to 14,093 active listings.

The slowdown’s effects are starting to pronounce themselves. In downtown Miami, arguably the county’s most visible condo market, prices recently fell for the first time in five years. — Sean Stewart-Muniz

Rendering of One River Point

1. One River Point sells 16 condos in 30 days in Miami [The Next Miami]
2. Climate change could have harsh effects on Little Havana [Miami New Times]
3. South Florida’s ‘seriously underwater’ mortgages drop in second quarter [Sun Sentinel]
4. Barrack says U.S. real estate market is getting ‘bubblicious’ [Bloomberg]

— Sean Stewart-Muniz

Current reader favorites:

1. First apartments coming to Boca business park
2. US hotels have reached peak in demand, CMBS could be hurt: Fitch Ratings
3. Coral Gables streetscape project has a bumpy start
4. Trump’s Doral resort hit with 23rd lien for unpaid renovation work
5. Panelists announced for TRD’s annual Miami showcase

Clockwise from top left: Bruce Mosler, Sharif El-Gamal, Don Peebles, Christopher Wein, Jonatham Miller, Jay Neveloff, Nick Mastroianni II and Chris Marlin

News of Chinese investment in U.S. real estate continues to roll in this week, with highlights including Xinyuan Real Estate’s $66 million purchase of a Flushing development site, Extell’s score of Chinese investment firm Shanghai Municipal Investment as an equity partner in Central Park Tower, and Joe Sitt’s pronouncement that despite a lull at the start of the year, Chinese interest is back, big time.

The Real Deal has once again taken note, and we’re heading back to China this November for our second U.S. Real Estate Showcase & Forum in Shanghai.

The event will take place at the five-star Jing An Shangri-La Hotel from Nov. 17 to 19. Our 2016 show will bring prominent industry professionals and investors from the United States to Shanghai, including former New York City Mayor Rudy Giuliani, who will be delivering this year’s keynote address.

Rudy Giuliani

Other distinguished speakers in our growing list include Bruce Mosler (Cushman & Wakefield), Sharif El-Gamal (Soho Properties), Don Peebles (Peebles Corp.), Chris Wien (Great Gulf), Chris Marlin (Lennar), Nick Mastroianni II (U.S. Immigration Fund), Jay Neveloff (Kramer Levin) , Jonathan Miller (Miller Samuel) and U.S. Ambassador Charles Gargano. The sessions will compliment workshops and more than 100 exhibits of residential and commercial developments.

A report issued this spring said Chinese investment in existing U.S. real estate assets could total more than $218 billion from 2016 through 2020. But there is a major disconnect between Chinese investors and U.S. developers and marketers owing to differences in culture, language, time zone, Internet freedoms and market familiarity. The Real Deal’s U.S. Real Estate Forum and Showcase will provide an arena for dealmaking and relationship-building in this notoriously difficult market.

For more information about programming, contact Heather Grossmann at hg@TheRealDeal.com. For sponsorship opportunities, contact Ross Fox at rf@TheRealDeal.com.

Want to stay up-to-date on Chinese investment in North American real estate? Subscribe to our China Watch newsletter, launching this fall.

Rendering of the Mandarin Oriental Residences in Boca Raton and Harlan Goldberg

The developers of the Residences at Mandarin Oriental in Boca Raton named Douglas Elliman’s Harlan Goldberg the project’s director of sales. 

Penn-Florida Companies is developing the luxury residential and hotel project, slated to be completed by the end of 2018. Units start at $1.8 million, according to a press release. The hotel-branded development is part of Via Mizner, a mixed-use project with luxury apartments, retail, restaurants, a private club, gym and golf amenities.

Goldberg, who will handle sales for the Residences, has closed nearly $3 billion in sales since 2005, according to a press release.

Rivergate KW Residential brought on John Zalkin as vice president of client services of the multifamily property management company. Zalkin was previously managing director at Kent Services, a security guard and technology firm. He started his real estate career leading property management of a portfolio of properties in Miami Beach in the mid 1990s.

Ryan Sharpe joined Avison Young as a research analyst. Based in Fort Lauderdale, Sharpe will work with the brokerage’s director of research, Lisa Rossetti-McNatt, in gathering market data, identifying key metrics and trends and more. He was previously with Front Street Commercial Real Estate Group.

Daniele Turkienicz was named a project designer for Metropica, a 65-acre, mixed-use development under construction in Sunrise. Turkienicz will be responsible for coordinating architecture and interior design for Metropica, as well as assisting the interior design team. Prior to Metropica, she was an architect designer for EDSA Inc.

Simon hired MacKenzie Harris as assistant director of marketing and business development at Town Center at Boca Raton. Harris previously interned with StrataBlue, Brooksource and Beyond Payroll.

Ocean Tower Key Biscayne and Angelica Rivera

Updated, 9:42 a.m., Sept. 21: Political and civic leaders in Mexico are reportedly calling for an investigation into their first lady’s use of a Miami condo owned by a Grupo Pierdant.

Following a report in the Guardian that first lady Angelica Rivera has been living in a luxury Key Biscayne condo owned by a Mexican contractor, the country’s two largest opposition parties have requested an investigation into Rivera’s condo, for which the contractor has been paying taxes, and the unit one floor up, owned by Grupo Pierdant. Rivera has reportedly been using them as one.

“It reignites the discussion over the links that the President and his wife have with businessmen, particularly the type of relation that they could have with someone who pays your property taxes,” Eduardo Bohorquez, head of nongovernmental organization Transparency International’s Mexico chapter, told the Wall Street Journal.

The contractor, Grupo Pierdant, paid $2.05 million using an LLC for unit 404 at Ocean Tower One in 2010. Rivera owns unit 304, which she bought in 2005 for $1.775 million.

In the U.S., Pierdant is known for DecoBikes, a bike sharing company in Miami and San Diego that he co-founded.

Rivera and her husband, Mexican President Enrique Peña Nieto have been involved in similar allegations in their home country. In recent years, Rivera bought the $7 million Casa Blanca estate from another government contractor, Grupo Higa. Although she said she bought the lavish white mansion with her own money, Rivera later returned the property and the president made a public apology.

Officials are now drawing parallels between the two. [WSJ] – Katherine Kallergis

Note: The Guardian has removed the original article from its website and added a correction, saying that Ricardo Pierdant’s companies have not “obtained any contracts with the Mexican government nor have they participated in any such contracting processes.”

Aerial view of Broward County

From the New York website: U.S. home builders are gaining confidence about the market for single-family homes, despite an overall slowdown in the economy.

Builders’ confidence rose two points on August’s Housing Market Index to 60 (out of a maximum 100), the second-highest level this year, according to a monthly survey by the National Association of Home Builders. Expectations for the next six months also increased by one point to 67.

“Historically low mortgage rates, increased household formations and a firming labor market will help keep housing on an upward path during the rest of the year,” NAHB Chief Economist Robert Dietz said in a statement, according to the Wall Street Journal.

The builder confidence index is a metric for how likely they are to begin construction on projects, which spurs job creation and stimulates the sale of a range of home products and materials.

So far this year, home builder sentiment has been up and down. Overall, the index is lower than last year’s levels, as home construction has stalled. Housing starts fell 2 percent in June compared to last June, according to data from the Commerce Department. The highest point of confidence since the recession was 65 in October. [WSJ] — E.B. Solomont

Andre Agassi and Franklin Academy in Boynton Beach

Former tennis pro Andre Agassi and his business partner/investor Bobby Turner sold a Boynton Beach charter school for $22.3 million.

The Franklin Academy in Boynton Beach marks the second in South Florida that Agassi and Turner developed and sold to Florida Charter Foundation, the schools’ operator. Last week, an affiliate of the Turner Agassi Charter School Facility Fund sold the Franklin Academy in Cooper City for $20 million to the Fort Lauderdale-based Florida Charter Foundation, which manages a network of 12 schools in the state.

The Franklin Academy also has locations in Palm Beach Gardens, Pembroke Pines and Sunrise, according to its website.

The Boynton Beach school, at 7882 South Military Trail, spans 81,000 square feet and includes classrooms for music, art, computer labs and science labs, a gym and locker rooms. The 10-acre campus was developed in 2013. Previous sales information for the property is not available online.

The Turner-Agassi fund had plans to develop up to 130 schools across the country, coming out to about $1 billion in planned investment. Turner is CEO of Turner Impact Capital, an investment fund based in Los Angeles. He was also a founding partner at the hedge fund Canyon Capital Realty Advisors.

Carlos Rosso and his wife Estefania Rosso were recently honored at Hyde Beach House Kitchen + Cocktails.

The Rossos were the cover stars of Caras Magazine’s July issue. Carlos Rosso, president of the Related Group’s condo development division, discussed his career to the Spanish-language magazine, including a 10-year stint in the Middle East during his 20s and 30s.

The event was held at Related and sbe’s beachfront restaurant and bar.

Hyde Beach House Hollywood features 65 condo units and 265 resort residences, priced from $430,000 to $1 million. The tower, located between the Intracoastal Waterway and Biscayne Bay, offers such amenities as access to sbe hospitality’s 80-plus hotel, restaurant and nightlife properties in Miami and nationwide.

Residents of the Hollywood project will have VIP access to the restaurant and lounge in addition to an Aqua Club, pool deck and private rooftop lounge. – Katherine Kallergis and Sean Stewart-Muniz

AIG’s Peter Hancock

From the New York website: American International Group has reached a deal to spin off its mortgage-insurance unit and sell it to Bermuda-based Arch Capital Group for around $3.4 billion.

Arch will pay $2.2 billion in cash plus stock for the business, United Guaranty, according to the Wall Street Journal. AIG will also retain some portions of the business through 2016.

The deal is a variation on AIG’s initial plan to launch an initial public offering of United Guaranty and retain a majority stake in the unit, which has about one-fifth market share in the United States.

The mortgage-insurance business makes money off of homebuyers who put down less than 20 percent of the purchase price, and are required to obtain mortgage insurance to protect banks from losses.

Although it United Guaranty is one of AIG’s strongest units — it generated income of $350 million during the first half of the year — it is a small division that’s easy to sell as company executives look to deliver cash to shareholders.

Billionaire investors Carl Icahn and John Paulson have criticized AIG’s performance and called for the company to be split into three parts. CEO Peter Hancock instead devised a plan to return $25 billion to shareholders by 2017. On Monday, Icahn bought an additional 1.2 million shares of the company, according to regulatory filings.

Arch, which has a market value of $9 billion, has been expanding its mortgage-insurance business, which currently has 3 percent of the U.S. market. The deal with AIG will immediately boost its standing, resulting in Arch “leapfrogging everybody and becoming the largest mortgage insurer out there,” according to CreditSights analyst Rob Haines. [WSJ] — E.B. Solomont

Daren Metropoulos and the Playboy Mansion at 10236 Charing Cross Road

From the Los Angeles website: The much buzzed about deal for the Playboy mansion has finally closed for $100 million, despite speculation that the buyer was backing out.

The buyer, Twinkie heir Daren Metropoulos, confirmed in a statement that the deal was completed.

The 20,000-square-foot mansion now holds the title as the priciest sale in Los Angeles history. The 90-year-old Hefner, America’s original playboy, will remain in his pleasure palace until his death, per the terms of the deal.

Metropoulos, the 33-year-old son of Hostess investor C. Dean Metropoulos, already owns the house next door. He plans to combine the two estates into one massive 7.3-acre compound — how the original architect, Arthur Kelly, envisioned the property in 1927 — after Hefner’s day.

“I feel fortunate and privileged to now own a one-of-a-kind piece of history and art,” he said in the statement. “I look forward to eventually rejoining the two estates and enjoying this beautiful property as my private residence for years to come.”

A photo posted by Nora (@norasworld) on Apr 13, 2013 at 2:55pm PDT

Miami stands to lose up to $3.5 trillion in assets by 2070 due to sea level rise, according to a new National Wildlife Federation report.

Miami has the largest amount of exposed assets, beaches included, of any coastal city, the report shows.

Guangzhou, China ranked second; and New York ranked third, according to the “Changing Tides: How Sea-Level Rise Harms Wildlife and Recreation Economies Along the U.S. Eastern Seaboard” report.

In Florida, $69 billion worth of property is at risk of flooding in less than 15 years, and beachfront property in Miami-Dade alone is valued at more than $14.7 billion.

Coastal flooding and beach erosion are among the biggest offenders for Florida, according to the report: Since the early ’90s, the state has spent $393 million on replacing sand. To maintain those beaches over the next 50 years, Miami-Dade County will need roughly 20 million cubic yards of sand, according to the Army Corps of Engineers.

Property values in South Florida are expected to fall as the tides rise, experts have said. And beachfront property has always been more valuable to developers and real estate buyers in the region.

The NWF issued the report to illustrate how sea-level rise harms wildlife and recreation economies along the U.S. Eastern Seaboard. While cities like Miami and New York are at the top of the list, the report states that poorer areas along the coast could be more vulnerable because they don’t have the resources to deal with the effects of climate change.

The city of Miami Beach, for example, is investing at least $400 million in raising street heights and installing water pumps throughout the barrier island’s most flood-prone areas. In addition, all new construction greater than 7,000 square feet must be Gold Leed Certified.

The National Wildlife Federation said some ways to mitigate the effects of climate change are to “curb development that degrades coastal ecosystems” and reform the National Flood Insurance Program to discourage redevelopment in “risky areas.”

Tourist attractions, including the Florida Everglades and the Florida Keys, are also at risk.

Check out a February map of the most at-risk areas of flooding in Miami, including Key Biscayne, Virginia Key and parts of Miami Beach:

Click to enlarge

A 2008 photo of downtown Miami as seen from South Beach (Credit: Marc Averette) (Inset: Daniel de la Vega and Anthony Graziano)

“Market correction” is the phrase that has hung over the heads of many in Miami’s luxury real estate industry over the past year. The global economy, which has led to weakening demand amid rising prices and supply, has left those in the front lines wondering what’s next for the Magic City’s priciest addresses.

It was also the main point of discussion at a Tuesday morning talk hosted by analyst Anthony Graziano and ONE Sotheby’s International Realty President Daniel de la Vega, who met at Brickell City Centre’s sales gallery to share their second-quarter report on Miami’s luxury market.

Supply has begun to pile up. By Integra’s count, tallying prominent buildings in neighborhoods east of I-95, there were 14,804 condos for sale above $1 million by the end of this year’s second quarter. For single-family homes, 10,221 properties were actively listed in that price bracket.

Even so, luxury prices in most neighborhoods were still on the rise, while some saw values explode, according to the report. The largest jump in prices was for waterfront homes in Aventura, which had their average price per square foot rise year-over-year by nearly half to $503 per square foot.

Other neighborhoods showing resilience: Coconut Grove, where average prices for a waterfront home rose 22 percent to $1,064 per square foot, and Coral Gables, which saw its non-waterfront condos grow in value by 25 percent to $550 per square foot.

The takeaway from Miami’s disconnect between sales, supply and pricing, Graziano said, is that the market is facing a correction.

“The sellers have these lofty price expectations that can’t be met,” de la Vega said. That could lead to steep discounts from asking prices, by as much as 15 to 20 percent, both said.

“We’ll see over the next six to 12 months in the single-family market some retreats in pricing,” Graziano added.

De la Vega cautioned, however, that opportunists waiting for values to drop further than 30 percent would be out of luck. The global financial factors that depressed Miami’s luxury sector, like weak foreign currencies and stock market volatility, have begun to show signs of improvement, Graziano said.

He said the conclusion of this year’s U.S. presidential election — no matter who takes office — will also alleviate some hesitancy among high-net-worth individuals.

The uncertainty now is how a new president will affect issues like taxation and succession concerning real estate for foreign nationals.

As outlined by the most recent Knight Frank Wealth Report, which surveyed private bankers financial advisors, those issues topped the list of concerns for ultra-high-net-worth individuals at the beginning of this year.

Personal real estate is also not an investment they take lightly: the Knight Frank survey showed the ultra-rich typically stow 24 percent of their wealth in first or second homes.

However, many Latin American countries are still facing political and economic strife. Venezuela in particular has been hit harshly, with middle class families waiting in long lines for groceries amidst a food shortage.

“I suspect that it’s going to be lumpy for the remainder of 2016,” Graziano said.

456 West 41st Street and Fred Botwinik

A retail building on a less-traded stretch of Mid-Miami Beach has sold for nearly $4 million, the first time the property has changed hands in 42 years.

The 5,380 square-foot building, at 456 West 41st Street, is the site of four stores: Dogz, Snips, Miami Beach Chocolate and Jewelers Choice. The 5,500-square-foot lot includes a small courtyard.

The price equates to $730 a square foot for the building.

Fred Botwinik, a broker associate with Douglas Elliman Commercial, handled the sale.

It was purchased for $3.925 million by Rajamim LLC. Records show the entity has an attorney as the authorized representative. Botwinik told TRD that the actual buyer is an Argentine investor. He said the stores all have leases until at least 2020, so he expects the new owner to maintain the status quo.

According to Miami-Dade property records, the Mediterranean-style building was built in 1930, with upper floor offices added in 1985. The sellers, Milton and Susan Schermer, had paid $145,000 for the property in 1974.

Mid-Beach‘s 41st Street, also known as Arthur Godfrey Road, is a commercial street that connects Miami Beach’s main north-south arteries, Alton Road and Collins Avenue.

Yet, the street, with two-story buildings largely dating to the 1930s, has not undergone much redevelopment. The first Starbucks on the street just opened recently. Forty-first Street is also home to more than a dozen banks, Terranova Corp.‘s headquarters, and several restaurants, including the well-known Forge and various kosher eateries that serve the Orthodox community in the neighborhood.

The building’s sale is the second Botwinik has brokered on the street: the first was 540 West 41st Street, sold about a year-and-a-half ago for $3.15 million.

Botwinik said there haven’t been many trades on 41st Street because owners have not wanted to let go of their properties.

“There are a lot of people that would like to buy, but there hasn’t been a lot for sale,” he said. “Maybe when they see the price of this one… a decent price, maybe they will get interested.”