According to the Wall Street Journal, a group of lenders led by HSBC Holdings and Bank of America are probably going to become the new owners of the Icon Brickell condo and hotel complex in downtown Miami.
“The negotiations are almost finished,” Mr. Pérez said in an interview Wednesday. He said he hoped the agreement would allow Related Group to remain the manager of the three-tower complex near downtown Miami, featuring décor and sculptures designed by Philippe Starck. Representatives of HSBC and Bank of America declined to comment on the talks. (WSJ)
The loans secured by the complex, which entails 3 buildings and 1,800 units, totals around $700 million. When the units came on the market in 2006, apparently nearly all of the units had been sold, many to Latin American buyers/investors. To date though, only 117 purchasers actually closed.
Why? With prices down at least 30% most buyers saw their equity wiped out. They were so far underwater that it simply didn’t make sense to close. And with only 117 occupied units (who knows if they’re all actually occupied), who the hell is going to pay the building’s maintenance costs, estimated at $12 million a year not including property taxes? If you’re one of those 117 owners, you’re basically throwing your money into a bottomless pit.
In these situations, when the lender forecloses on an effectively empty building, many have elected to do bulk sales at significant discounts. However, apparently in this case the lenders have chosen to sell off the units one by one. How long will it take? This will give you an idea regarding supply in the Miami marketplace:
“In the downtown Miami and neighboring Brickell areas, more than 22,000 condos have been built in the past four years, or more than twice the number added over the previous four decades, says Holliday Fenoglio Fowler LP, which advises real-estate developers and investors.” (WSJ)
Image: Flickr
75 Wall Street
Continuing on the topic of home ownership structures, here is an interesting “try before you buy” scheme being implemented in New York. 75 Wall Street, a luxury downtown condominium project, has a rent-to-own scheme that seemingly offers renters/buyers a lot of flexibility:
“He thinks of it as an opportunity to try a new building and neighbourhood before buying, as well as a canny financial hedge. “It’s my first time living in the Financial District and that’s a completely new experience,” he says. “It’s [also] protection. If the market has a V-shaped recovery and prices [are] higher in 12 months, I’m capped; I have a certain [purchase] price listed on the contract and … haven’t completely thrown away all the money from renting.” At the same time, if Manhattan property values fall and he realises he wants to live somewhere else he can end his lease and start house-hunting again.”
Try Before You Buy [Financial Times]
Image from 75 Wall Street by Evan Joseph
Leslieville Mural
In 2005, the New York Times said goodbye to gritty and hello to the hippest neighbourhood in Toronto: Leslieville. Queen East was going to be the new Queen West. It’s now 4 years later and, without a doubt, Leslieville is hip, it’s super hip. But in a way that’s different than Queen West. It’s less scenester and more of just a great area with cool shops and eateries.
After spending the weekend looking at properties in the area, I can honestly say there are very few, if any, bargains to be had — especially with all this spring real estate fever going on in Toronto. Gentrification is nearly complete; no longer is it for people who can’t afford Riverdale. To find an older banger to fix up, it now seems that one has to stray north towards east Chinatown. And we all know that Queen St is where you want to be.
This got me thinking about gentrification. Historically, Toronto developed north-south along the Yonge subway line. Then downtown west started to get cool and eventually the cool factor pushed all the way out to Parkdale (thanks Drake). And now the east is cool. So what’s next?
Read more…
Source: 1bloor.com
Over the past few months a number of folks have tossed around the idea of turning the south east corner of Yonge & Bloor in Toronto into a public space: Spacing Toronto; Christopher Hume for the Toronto Star. A few local design shops, including Janet Rosenburg and Brown + Storey, have even prepared proposals. The site’s buildings were demolished last year in preparation for construction of an 80-storey luxury condominium, hotel and retail complex (1 Bloor East); only to have one of the project’s partners — Lehman Brothers — collapse and the world seemingly come to an end. So the site sits empty, and people have begun postulating.
I’m all for density, tall buildings and luxury developments. But I also strongly believe that the public realm is a critical component of any successful city. After reading Hume’s article I gave the idea some more thought. Toronto’s most successful square is easily Dundas Square. Love it or hate it, it’s capitalism and extreme commercialism at its best. Midtown has the Yonge & Eglinton Centre, with a square that has seen better days, and pretty soon Uptown will have the Hullmark Centre at Yonge & Sheppard (pictured below).
Source: http://tridel.com/hullmarkcentre/neighbourhood.php
When William Penn laid out the street grid for the City of Philadelphia he split the city into 4 quadrants and placed a public space at the centre of each one — today, Rittenhouse Square is the most celebrated of those squares. If we’re to think of Philadelphia, perhaps a Yonge & Bloor Square could be our 4th urban space on Yonge? Instead of rational quadrants, we’d have one long street that we can continue to tout as the longest street in the world, but now with 4 beautiful public spaces.
While reasonable, around the corner from Yonge & Bloor sits one of the finest examples of public spaces in the City of Toronto — Yorkville Park. What Yonge & Bloor needs is an icon, a global proclamation if you will. And what better way to do that than through 80 glorious storeys of glass, steel and concrete? I for one am dissappointed to see this project fall victim to the Great Recession. I hope that the folks at Bazis can get alternative sources of capital lined up and rectify the partnership issues that have likely surfaced due to Lehman’s demise. I’m hoping for good news going forward.
Source: construction.trumptoronto.ca/photos/
As D. Trump himself would say, this is going to be a special, special building. Despite the naysayers, the Trump International Hotel & Tower Toronto is going full steam ahead at the corner of Bay & Adelaide. Currently, they’re working on the above grade parking garage (a relatively simple cork screw formwork). Once they finish this phase and move onto the flat unit floor plates, it’ll really begin to rise.
This is one of many 5-star hotel & condo projects going up in Toronto, and it’ll be interesting to see what kind of market they finish into. By 2010-2011 when many of these projects finish, such as the Shangri-La, Ritz Carlton and Four Seasons, we could and will likely be in a totally different market environment. I certainly wouldn’t want to be finishing a luxury 5-star hotel right now, in this market.