LWR Commercial
Archive for June, 2008
Sarasota market hits highest sales figure since March 2007
Jun 26th
Home sales in the Sarasota MLS for May 2008 stood at 627 – the highest level in 14 months, and approximately 92 percent higher than the sales in January 2008. In 2008, sales have been increasing each month, possibly due to the influence of the new property tax portability law enacted in late January. Sales have climbed from 329 in January to 423 in February, 514 in March and 567 in April.
“This year, the Sarasota real estate market has been a beacon of hope as the state and national markets continue to struggle,” said Helen Sosso, 2008 SAR President. “I believe our local agents have embraced the concept of a buyers’ market, and educated sellers on the realities of pricing. We still have advantageous interest rates, and our communities’ natural and cultural amenities always attract buyers.”
The May 2008 report continued to reflect strength in pending sales, which stood at 692 – the second highest level since June 2006. Last month’s pending sales stood at 756, the highest in the period. In May 2007 only 541 pending sales were reported. Like closed sales, pending sales have been edging upward since December 2007, when there were only 374 pending sales reported. Pending sales reflect contracts executed by buyers and sellers, and indicate more closings in upcoming months and an improving market in the early summer months.
Inventory levels were lower in May 2008 for the third month, and are the lowest they have been since February 2006. Still, with 9,500 single family and 5,100 condos listed, buyers have a huge selection of more affordably priced housing to select from. The reduced inventory is a combination of fewer properties being listed, and increasing sales numbers. As the inventory continues to decline, the market will come back to more balance. As we approach equilibrium, the buyer’s market we’ve been experiencing will be gone, and price appreciation will creep back into the market.
In general, the Sarasota MLS statistics show a rebound throughout 2008 – every month seeing stronger numbers than the month before. In fact, Sarasota statistics have been stronger in recent months than sales in the Miami market, which is a much bigger geographic and demographic area.
In the local Sarasota market, we have seen the trend already beginning toward lower inventories, higher sales, and a leveling of prices after several months of declines. The May figures reflect this new reality.
Click HERE for the complete press release, including PDF with two charts.
Florida Property Tax Landscape Could Change
Jun 24th
TALLAHASSEE, Fla. – June 24, 2008 – An aspiring state Senate president began his campaign on Monday to defeat a ballot proposal that would slash property taxes by raising the state sales tax and possibly carving into the state budget.
The political battle pits Mike Haridopolos, in line for the Senate presidency in 2010, against former Senate President John McKay. McKay, a Bradenton real estate developer, proposed the tax swap as a member of the state Taxation and Budget Reform Commission, which voted this spring to place the question before voters in November.
The tax-swap fight transgresses usual political boundaries. Both Haridopolos and McKay are Republicans. Backing Haridopolos are school boards and the state teachers union, farmers, hospitals, AARP and the fiscally conservative National Federation of Independent Business. It’s an unlikely coalition of groups that often lobby on opposing sides, but whose overlapping interests in state funding and tax exemptions – as well as possibly currying favor with an incoming Senate president – have united them against Amendment 5.
On McKay’s side: the powerful Florida Association of Realtors (FAR), which invested $1 million in the campaign to pass the Amendment 1 tax cut in January and says it intends to spend at least as much on Amendment 5 this fall.
“Some of the groups that stood against this today, I haven’t seen any comprehensive property tax relief coming from them,” said John Sebree, FAR vice president of public policy. “Is any property tax relief good to them?”
Amendment 5 would eliminate the portion of property taxes that pay for public schools, in exchange for increasing the sales tax by a penny, repealing some sales taxes exemptions and exclusions, cutting the budget, revenue growth attributable to Amendment 5 or some combination of those.
The state-mandated schools portion of property taxes is worth $8.9 billion, about 25 percent of total property tax collections. Amendment 5 would require lawmakers to pay back the entire amount to schools.
Wayne Blanton, director of the state School Boards Association, said Monday that he does not trust lawmakers to do it. “They’re more prone to come in and cut services than they are to do the right thing.”
McKay said that’s a sad commentary, “but in the event that the Legislature does not uphold its constitutional duty, as outlined in the amendment, we’ll be in court very quickly.”
Haridopolos has argued that growth in school funding will boost the true cost of the plan from $8.9 billion to $11 billion.
Raising the sales tax by one penny, he said, will generate about $3.5 billion, leaving lawmakers without sufficient means to fill the gap unless they pass “the biggest tax hike in Florida history,” carve deeply into the state’s shrunken budget, or both.
Haridopolos and McKay disagree on the potential for filling in the gap. On Monday, Haridopolos challenged McKay to debates across the state on Amendment 5.
McKay said he would be happy to debate Haridopolos, a responsibility he would share, he said, with other commission members.
McKay criticized some of his opponents for “playing loose” with the numbers.
“Some folks are quoting future projects for the schools portion of property taxes, but then quoting only what a penny in sales tax would raise today,” he said.
Sebree said the relief from Amendment 5 would reach much further than the effects of Amendment 1, which primarily targeted homesteaders.
“This amendment would affect every property owner in Florida,” he said.
Copyright © 2008 Tampa Tribune, Fla., Catherine Dolinski
Lakewood Ranch Commercial Space May Double in Size
Jun 23rd
LAKEWOOD RANCH Lakewood Ranch Corporate Park wants to add 2 million square feet of office space to its 1,300-acre complex off University Parkway, which many already refer to as the new commercial hub for the region.
Developer Schroeder-Manatee Ranch was limited in an earlier plan to building 2.3 million square feet of office space at the park through 2014. But it has already built or has construction approvals for 2.2 million square feet, so it is petitioning the county to expand that figure to 4.3 million square feet.
“We’re up against it; that’s why we’re here,” said Todd Pokrywa, SMR’s vice president of planning. The developer won an 8-0 vote Thursday night from the Sarasota County Planning Commission. The change of plans next goes to county commissioners for a final vote on Aug. 26.
The going might be tougher there since county officials are pushing SMR to make its huge development more multimodal. That is an industry term for beefing up plans for bus and shuttle service, bike paths and pedestrian access with the aim of making the park less reliant on the automobile.
“We’re committed to working on a multimodal plan,” Pokry- wa said, noting that negotiations with the county are ongoing.
Sarasota County Commissioner Joe Barbetta said there was “no question” that pushing the developer for commitments on an overall transit plan would be the biggest issue at the August hearing.
The county is considering the addition of a bus route to the corporate park and is interested in plans for a local shuttle that would feed into the public transit system.
SMR’s new plan also calls for another 534,000 square feet of office space to be built between 2015 and 2019, bringing the total to 4.9 million square feet.
To get a grasp on how big 4.9 million square feet is: It is 112 acres, or 1.1 million square feet more than is contained in the Sears Tower, North America’s tallest building.
The numbers are big enough that the county now considers SMR’s corporate park to be the region’s commercial center, said Sarasota County Administrator Jim Ley.
The park has been so successful that other areas in northern Sarasota County once envisioned as being home to commercial office space have not gotten off the ground.
“They’re the sucking sound sucking things into that area, and that’s not bad,” Ley said.
Unlike other parts of the country, most of the income of Sarasota County residents comes from transfer payments, such as investments, Social Security checks and other forms of income that are not wages.
In most places, workers’ paychecks are the biggest source of income.
It is that need to diversify the local economy and attract higher-paying jobs that led to the county’s approval of the project in 1995 and its continued support for it, said County Commissioner Jon Thaxton.
While SMR is not immune to the downturn in real estate, the plans reflect what the developer believes will happen over the next six years, Pokrywa said.
The new plan suggests long-term hope for a commercial market that has grown soft with the other sectors of real estate. However, the plan also shows an uncertainty about Florida’s ability to attract manufacturers.
SMR is cutting the amount of industrial space at the corporate park in half. Earlier plans had called for 2.8 million square feet for manufacturers, but that number is cut to 1.4 million square feet in the new plan.
“The office market is weak right now,” said Carl Wise, a principal with Preferred Commercial in Sarasota. “The housing downturn hit everyone in the butt.”
But Wise added that executives at SMR are “good, thoughtful, long-term thinkers.”
In the current market, an industrial building will sell for $80 to $150 per square foot, while an office building will sell for $250 to $350 per square foot, Wise said. So, it is lucrative for a developer to switch to commercial from industrial, if it can, he said.
“We’re not seeing anything conducive to industrial in Florida,” Wise said. “They tax these guys to death and make it really hard for them. That’s why so many manufacturers are leaving.”
Luring Ritzy Hotels to Sarasota
Jun 16th
Money is apparently no object for guests staying in luxury hotels with traditionally upscale flags such as Ritz-Carlton or Waldorf-Astoria. The same might also be said for capital sources when it comes to financing such facilities. While lenders appear to be in lockdown mode for every other type of commercial real estate, they seem to be more willing to open the vault for established upscale hotels. Financial services firms believe that charm can be extended to new projects, depending on where they are located across the country.
“It’s just a pure flight to quality in this market,” says Andrew Colman, vice president with Walker & Dunlop in Bethesda, MD, whose Hotel Finance Group has arranged more than $300 million in loans to hotel development and management companies over the past year and a half. The volume of transactions in the luxury hotel market is double its normal level, rising from 25% to 50% this year, he says.
Walker & Dunlop’s latest transaction is a $65-million refinancing for the Ritz-Carlton Philadelphia, which the firm says is based on the hotel’s brand, strong asset quality and exemplary owner sponsorship. Miami-based Gencom Group owns the 303-room, full-service luxury hotel that is designed to resemble Center City landmarks related to the nation’s birthplace.
Whether that translates to new projects remains to be seen. For example, New York-based Carlton Advisory Services is working with developers of a proposed 225-room Waldorf-Astoria hotel in Sarasota, FL, to get $100 million in bridge financing for land acquisition and pre-development costs. Lion’s Gate Development and Hilton Hotels Corp. are advancing the 18-story hotel as part of a planned $1-billion mixed-use project called the Proscenium in Downtown Sarasota.
Financing for luxury hotels can be difficult because of their size, though not impossible even in the current credit-squeezed environment, says Kenneth Herzberg, director with Carlton Advisory. Even upscale condominium units, which banks might not touch at normal pricing levels, are favorable if they have a hotel’s brand attached, he says.
“We have some significant interest from some groups,” Herzberg says. “It’s a combination of the brand, the sponsorship and how it’s presented, and the overall valuation of the project at the end of the day. If it’s a top label and it appeals to folks on the upper end of the scale, and it has a branded residential component, it’s going to make a deal a lot easier.”
Other luxury hotel brands such as JW Marriott, Renaissance and Grand Hyatt are still able to get financing at good terms, according to Colman, whose family has a lengthy history in the hotel industry. Now that commercial mortgage-backed securities have gone from abundant to extinct in just the past year, hotel financing is now driven more by who and what owners and developers know.
“My relationships take on increasing value,” Colman says. “Even if it’s a great deal, it’s still tough, but they are getting done.”
Manatee County Commercial Land Market
Jun 16th
Article published Jun 16, 2008
Manatee land market said to be iffy
Real estate agents say the overall sales trend is still declining
PALMETTO Palmetto developer Alan Zirkelbach sold 138 acres of industrial land near Port Manatee to two groups of investors in April for $18 million.
Those two sales represented 46 percent of $39 million in land sales that took place in Manatee County during the 12 months ended May 31.
Because of those sales, the total dollar volume of land that changed hands was down only 4 percent from the $40.8 million in sales that were concluded in the county during the same period a year ago.
Commercial real estate agents, however, say that Zirkelbach’s sales were a blip on the radar screen. The overall trend in the market for vacant land continues to be downward with respect to price and the number of closings.
“There are a lot of buyers and a lot of sellers out there, but they’re miles apart in their philosophy at the moment,” said Stan Rutstein, an agent with Re/Max Gulfstream in Bradenton. “Buyers are evaluating land values with a microscope, while sellers, who either got in too high or are too leveraged, are operating with unrealistic expectations.”
The real estate buying decision is based on confidence, Rutstein continued.
“If you are nervous, which is the prevailing mood right now, you are going to take much longer to work out deals as you try to squeeze out all the risk out.”
Two years to recovery?
All told, there were 50 undeveloped land sales in Manatee County during the 12 months ending May 31, a 17 percent drop from the 60 deals that took place during the same period a year earlier and a 78 percent drop from the 215 sales that took place during the 12 months ending May 31, 2006, Manatee County property appraiser data show.
John Stephens, an undeveloped land specialist with North Manatee Realty in Palmetto, predicted that it will take at least two years before the market revives from its current moribund state.
“How many thousands of vacant residential lots are out there that we don’t have buyers for?” Stephens asked. “Until those lots are absorbed, there won’t be any demand for raw land.”
Stephens said the restrictions on the digging of new wells only exacerbates the problem.
“Because the water management district won’t allow new wells for farming, new farms can’t come in,” Stephens said. “As a result, demand for farm land has been depressed to zero.”
Another factor depressing the market is the price of gas, said Barbara Anson, an agent with Wagner Realty in Myakka City.
“People are holding back on buying land in rural areas because they don’t know what it will cost them to drive back and forth,” Anson said.
Demand hitting prices
Manatee County property appraiser statistics show that falling demand for empty land is having an impact on prices.
Where land was selling for an average of $78,210 per acre in 2006, the average price for the 17 deals that have closed this year is just $25,182 per acre — a level not seen since 2004.
There may not be enough sales in 2008 yet to get a clear picture, said Dale Friedley, a data analyst with the Manatee County Property Appraiser’s Office. “However, there is a definite further price downtrend,” Friedley said.
Paul Klick, a commercial agent with Coldwell Banker in Sarasota, agreed that the market for residential land is catatonic. But he said buyers are still interested in commercial and industrial land. Zirkelbach’s two sales in April are certainly proof of that, Klick said.
Zirkelbach originally paid $6.1 million for the 138-acre tract off Buckeye Road in northern Manatee in July 2005. He then submitted plans to convert the land into an industrial park for distributors and light manufacturers, originally intending to market the park to end users over time. But when the downturn hit, Zirkelbach put the whole property up for sale.
Klick, who helped Zirkelbach sell the land, said the ultimate sale resulted from three factors: intensive marketing, obtaining site plan approval and getting a group of developers to commit to building a 123,367-square-foot regional distribution center for Federal Express Ground.
“Federal Express ended up being the anchor tenant for the industrial park, which was the linchpin to putting the deal together,” said Klick, who was assisted in the sale by Coldwell Banker agents Charles Clifton and Jerry Lamb.
Indianapolis-based Scannell Properties ended up paying $5.5 million for 16.5 acres where the FedEx distribution center is being built. The rest of the property was bought for $12.5 million by a consortium of developers led by Clearwater builder Brad Shirley of Jomar Development.
Klick said that while the Fed-Ex sale was driven by a national company’s need to expand its regional distribution network, the sale of the remaining land was due to developers who believe in the future of the area.
“Port Manatee is expanding tremendously,” Klick said. “It is starting to handle containers. And being the closest U.S. port to the Panama Canal, it will benefit from the expansion of the Canal Zone.”
Besides commercial and industrial users, the only other buyers of undeveloped land in recent months have been investors who are taking advantage of the fact that they are the only ones taking advantage of available opportunities.
Carlos Beruff, a longtime Southwest Florida builder and developer, bought 47 acres for $1.1 million, or $23,787 per acre, in December, according to property appraiser records. That price was 74 percent less than the $4.2 million, or $89,362 per acre, that Kimball Hill Homes paid for the South Manatee property in April 2005.
Similarly, Ronald G. Allen, an Osprey resident who made a fortune investing in real estate, bought 101 acres near Myakka City in May for $3.4 million, or $33,663 per acre.
“I didn’t steal it,” said Allen, who bought the property from Michael Ferro. “But I don’t think I got taken either.”
Allen said that he sold his house on Casey Key to Ferro for $3.2 million and agreed to pitch in an extra $200,000 for Ferro’s land in eastern Manatee.
“The land has already been rezoned,” Allen said. “The former owner spent about $500,000 to develop it. That’s what made it interesting to me.”
Allen believes his money is better off invested in land than it would be if it were sitting in the bank.
“If you don’t panic and you hang on to what you have, the market will come back,” Allen said.
Florida Governments Facing Two Property Tax Cuts
Jun 16th
TALLAHASSEE, Fla. (AP) – June 13, 2008 – Local governments in the midst of writing annual budgets face lower property tax revenues because of a new state constitutional amendment and falling real estate values.
Amendment 1, which voters approved in January, was expected to cut local property taxes by $9.3 billion during the first five years, though it may be a bit less because of the housing market decline, said Chris Holley, executive director of the Florida Association of Counties.
Holley, speaking Thursday at a news conference about how local governments are cutting expenses, said the full effect of the real estate slump hasn’t yet been calculated. But one thing is certain.
“The impacts of the housing market thud are much more severe to local government than Amendment 1,” he said.
Holley estimated property values will drop about 8 percent on average, but he said it could be worse for high-growth coastal counties. And it may be worse next year, he said.
The housing slide that began last year follows several years of soaring property values. That boom resulted in dramatic tax increases for many taxpayers and prompted the Legislature to order a tax rollback in 2007 and put Amendment 1 on the ballot.
Primary homeowners are expected to get an average $240 annual reduction because of a higher homestead exemption in Amendment 1. Homesteaders were sheltered from the worst of the tax increases during the boom by the 1992 Save Our Homes Amendment, which limited annual assessment increases to 3 percent.
They were unable, though, to transfer accumulated Save Our Homes benefits when they moved, but Amendment 1 also has a “portability” provision to fix that. It lets homeowners take those benefits with them for up to $500,000 in property value.
The depressed market means fewer people are moving, so the portability provision won’t be as costly as initially thought, Holley said. The estimate was $2.7 billion of the five-year total.
He said most cities and counties are cutting what are considered nonessential services such as libraries, parks, health care and transportation to avoid reducing core services such as fire and police protection. The vast majority are also trying to avoid tax increases.
“What I’m hearing from my members: ‘The people have spoken, we’re going to try to implement Amendment 1,’“ Holley said.
He joined Florida TaxWatch at the news conference to announce a report by the private budget watchdog group that contains 150 ways cities, counties and school districts have cut costs in recent years.
It’s an effort to share those ideas with other local officials now looking for ways to trim costs.
They include a limit on annual spending increases in Hillsborough County that’s based on the inflation rate and population growth; Palm Bay’s use of plastic instead of wooden to form concrete sidewalks; and a Miami-Dade County program that lets people exchange conventional shower heads for high-efficiency models.
© 2008 The Associated Press, Bill Kaczor (Associated Press Writer). All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.
Sarasota Commercial Investment Division Golf Tournament
Jun 6th
Golf & Dinner at the Ranch
Legacy Golf Club
Thursday, October 9, 2008
CID’s popular annual golf tournament/fundraiser draws many participants who come out to enjoy an afternoon of golf at the beautiful Legacy Golf Club followed by a delicious dinner and entertainment in the clubhouse. Proceeds from the tournament will benefit the following CID Charities.
As a CID member or Business Affiliate, you have the first opportunity to reserve sponsorship for this event. What a great way to expand market awareness of the products and services you provide the real estate community.
SPONSORSHIP OPPORTUNITIES
PLATINUM SPONSOR – $5,000
- Includes 8 complimentary passes for Golf and Dinner;
- Company name in the Program;
- Recognition at Dinner;
- Recognition in Weekly CID Blast Emails
Gold Sponsor – $2,000
- Includes 4 complimentary passes for Golf and Dinner;
- Company name in the Program; Recognition at Dinner;
- Recognition in Weekly CID Blast Emails
Silver Sponsor – $1,000
- Includes 2 complimentary passes for Golf and Dinner;
- Company name in the Program;
- Recognition at Dinner
Bronze Sponsor – $500
- Includes 1 complimentary pass for Golf and Dinner;
- Company name in the Program
Hole Sponsor – $300
- Includes Banner at hole with Company name;
- Company name in the Program
We also need contributions for raffle prizes and for the “Goodie Bags” for each player. Suggested raffle prizes: $100, $200 & $300 levels – Golf clubs; Gift Certificates for Foursomes of Golf; Golf Items; Restaurants; Gift Baskets; Golf Related B ooks, Pictures, Posters, Clothing; Dozen Golf Balls. Suggested Goodie Bag gifts – Golf Tees; Golf Towels; Suncreen; Visors; Keychains; Coozies.
Download the CID Golf Tournament Sponsorship Form to get involved!
Download the Registration Form to play.
Proceeds from the event go to:
Sarasota Young Realtors June 13th Meeting
Jun 2nd
International Marketing by Pat Tan
The Sarasota Young Realtors welcome Patricia Tan for their June meeting on the topic of International Marketing. Patricia Tan has teamed up with Carla Rayman to head a team of experienced professionals qualified to conduct international business, listing and selling commercial properties, land and residential homes.
The team already represents international listings here and in other countries, including Bahamas, Dominican Republic, Nicaragua, Costa Rica, Panama, Mexico, Argentina, the Caribbean and Malaysia. They have also been recognized in the United Kingdom and have been quoted in various real estate publications.
For the past three years, the pair has attended international property shows, and held real estate seminars locally and in other countries that target end users as well as other real estate professionals.
Join Us Friday, June 13th
- DATE: 6/13/2008 TIME: 12:00pm – 12:30pm — Luncheon
- 12:30pm – 1:30pm — Meeting
- COST: $5.00
- LOCATION: Conference Room A
- RSVP: RSVP with teri@sarasotarealtors.com
Please pre-register online at www.sarasotarealtors.com, click on Education, then register for classes
or email your credit card information, expiration date, along with the name(s) of people attending to teri@sarasotarealtors.com.
Sincerely,
Anthony Homer
