Sarasota Real Estate

Jacob Ogles, Jacob.ogles@srqmediagroup.com

An economic forecaster encouraged Sarasota leaders to rally around community strengths and rebuild the economy upon shared ideals.

“The challenge and opportunity for Sarasota County,” said Bob Treadway, “is to come together and to leverage its unique assets and resources to shape a better future.”

Treadway, the futurist at the head of Treadway and Associates, was brought into town Thursday by the Coalition of Business Associations of Sarasota County to discuss what coming years would hold. He said this region may yet have a long and difficult recovery from the recession.

“He gave us four scenarios, and the most likely was a very slow recovery where we really wouldn’t be back to 2007 levels for another seven years,” said Sarasota City Manager Bob Bartolotta.

Kerry Kirschner, president of the Argus Foundation, thought the workshop could mark the beginning of revitalization. “Hopefully, it was the beginning of moving us out of the malaise we are in,” Kirschner said.

Bartolotta said Sarasota is counting on a retiring generation of Baby Boomers to economically restore the area, but has relied on people finding the region themselves. “Everyone assumes people will retire and move to Florida, but we will have to work for that and to compete,” he said.

As the region does compete, Kirschner hopes it will do more than ad blitzes about the beaches. The entire community needs to coalesce around other elements that make this area special, he said. “We have got tremendous assets to build on,” he said. “We have got to get out there and do it. We can’t just hope people will find us.”

Joe Hembree, president of COBA, said the most important part of the event Thursday was the number of leaders rallying around similar concepts. “You are seeing a recognition by business and community leaders that we have to come together to solve these problems,” Hembree said.

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If you can help support ShelterBox’s work around the globe in any way, great or small, please click here.

Click here to watch a short video feautring interviews of the response from ShelterBox to the Haiti earthquake.

ShelterBox Response Team (SRT) members Dave Eby (US), Wayne Robinson (US) and Mark Pearson (UK) are on the ground in Port au Prince, Haiti.

The team arrived in the island’s capital on Thursday, January 14 and have already been in contact with government officials, ACTED and Rotarians in the country. The Response Team, who are completely self-sufficent, have set up base with the help of a Haitian Rotarian.

Speaking from Port au Prince, David Eby said: ‘We’re working hard to resolve security, logistics and communications. The city is totally devastated. Our host told us, “Haiti is no more.”’

The situation on the ground remains fraught with the damaged infrastructure in Haiti hampering the aid effort but ShelterBox is doing everything within its power to ensure aid reaches Haiti imminently.

ShelterBox’s Head of Operations John Leach said: ‘We spoke with our team in Haiti this morning and already they’ve been working with other aid agencies and the government to assess where ShelterBoxes are most needed.

‘Our priority is now getting logistics in and doing all we can to get it on the island. We’re sending a ShelterBox Logistics team into Miami to work and coordinate logistics into Haiti from there.’

ShelterBox’s Logistics Manager Richard Lewis added: ‘We’re doing everything we can to make sure emergency aid reaches the people of Haiti.
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The situation is changing by the minute and we’re exploring every single avenue available to us in order to make sure the aid gets on the ground as quickly as possible.’

Need grows

The ShelterBox Logistics team, made up of SRT members Mark Dyer (US), John Lacquey (US) and Ian Neal (UK), will meet a consignment of ShelterBoxes being flown into Miami, USA and run the logistics into Haiti from there.

930 ShelterBoxes have already been dispatched and are en route to Haiti while another 1,000 are being packed today at ShelterBox HQ by ShelterBox’s team of volunteers.  Virgin Atlantic are supporting the relief effort by flying hundreds of the ShelterBoxes on their planes.

Sir Richard Branson, President of Virgin Atlantic, said: ‘Everyone who has seen the sheer destruction in Haiti over the last few days will have been moved to help in any way they can.

‘We will fly in as much aid as possible so that the agencies on the ground  can respond to the needs of everyone in Haiti whose lives have been devastated by this tragedy.’

With the need in Haiti growing each day, there are millions of people in need of emergency shelter. ShelterBox Founder Tom Henderson says support at this time is crucial.

‘The support we’ve seen in the last few days has been staggering,’ he said. ‘It’s all hands on deck for ShelterBox right across the globe. People in Haiti need our help and we won’t stop until they get it.  If you can help, in any way at all, I’d urge you to do so.’

Click HERE for the complete PDF version of the press release, along with two pages of statistical charts.

With 648 total property sales reported in December 2009, the Sarasota real estate market saw the most closed transactions since March 2007, a 33 month span. Overall sales in December 2009 were also 52 percent higher than December 2008, when only 406 properties changed hands, and 70 sales higher than the 578 sales reported in November 2009. Median sale prices were also up last month for both single family homes and condos.

For the full year 2009, the trend lines have been dramatic. Monthly home sales have climbed to the high 500s and low-to-mid 600s, compared to 2008 when sales often dipped to the low 400s and even into the 300s. The overall number of closed sales in 2009 stood at 6,699, compared to only 5,459 in all of 2008, for a 22.7 percent increase. In addition, the overall property inventory has plunged from the 10,000 to 13,000 range in 2008, down to the low 6,000 level at the end of 2009.

For local Realtors®, the monthly and annual trend stands in contrast to the national picture. Sales nationally have slowed during the early winter months, but not in Sarasota.

“This is very good news, especially considering the fact that our market is showing considerable strength against a national backdrop of uncertainty,” said 2010 SAR President Erick Shumway. “Sales are continuing to rise, and we’re starting to see a return of appreciation as the available property market tightens and buyers look more toward arm’s length sales instead of short sales and foreclosed properties.”

Locally, pending sales stood at an even 700 in December 2009, a drop of 11 percent from the 794 in November, but much higher than December 2008, when only 571 pendings were reported. Pending sales are an indicator of current buyer activity and are a strong indicator of closed sales for the next one to three months.

The first-time homebuyer tax credit was extended and expanded to include many other homebuyers on Nov. 6, so the home buying sales rush could easily continue through the season and the first quarter of 2010. Recent statistics continue to point to a local market in a prolonged recovery period.

The median sale prices for single family homes and condominiums have apparently stabilized after the extended drop experienced in 2008. The median sale price for single family homes actually jumped by 4.7 percent to $170,000, almost identical to December 2008’s figure of $175,000. For single family homes, the median for the full year was $163,000.

The condominium median prices continue to see-saw, rising to $199,000 in December 2009 after dropping to $178,750 in November from the $220,000 figure reported in October. In December 2008, the median price stood at $255,000, which was somewhat of an aberration due to the low volume of sales that month. Only 80 condos were sold in December 2008, and many were in the million-dollar plus range. The median sale price for condominiums for the full-year of 2009 was $190,000. This puts December 2009 on the upside for the year in both categories.

Short sales and bank-owned property sales continue to impact median sale prices locally. Normal arm’s length sales bring more than double the price on average than those for distressed properties. For the full year 2009, distressed property sales accounted for 40.7 percent of all sales, compared to 2008’s total of only 21.2 percent. Thus, while the median sale prices did drop in 2009, this was due in very large part to the distressed segment of the sales.

The inventory level in December 2009 was at the lowest level since late summer of 2005 and the years prior to the boom period from 2003 – 2005.

“One of the biggest statistical positives in December was the month’s supply of homes, which fell to 8.1 months for single family homes and 12.3 months for condos,” noted Erick Shumway. “These are the lowest figures in two years. Once they reach 6 months, the market is considered to be in equilibrium between buyers and sellers. Last year at this time, the figures were 19.1 months for single family and 31.8 months for condos. This is a huge difference in only a short period of time.”

Looking at the complete statistical year for 2009, and the big finish seen in December, it appears the Sarasota real estate market has turned the corner and is heading toward even brighter days ahead.

Profits in commercial real estate? To hear the “other shoe-ers”, you would think there is a giant sinkhole everyone is throwing their office/retail space into. In a vote of confidence for the commercial real estate trusts that have come in search of credit, BofA has ridden shotgun on the recapitalization of a battered REIT sector. In doing this, they have made a ton of money, and are steadily growing their commercial bucket with the primo commercial real estate holdings.

The WSJ covers this angle well, with some insights into the commercial real estate investment world and what is driving profits.

Bank of America is a lead lender on $43 billion in outstanding credit facilities to 53 different real-estate investment trusts, or REITs, more than any other bank, according to SNL Financial Inc. Last year, as access to capital became scarce for real-estate owners, these lending relationships went a long way in building market share for the bank’s investment-banking arm, which also was bolstered by the team that joined the firm as part of Bank of America’s acquisition of Merrill Lynch in 2009.

For example, as debt-laden warehouse company ProLogis faced questions from investors last spring about whether it would be able to avoid bankruptcy, the REIT turned to Bank of America for a plum assignment: to lead what became a $1.2 billion stock offering. At the time, ProLogis was negotiating for a loan extension with Bank of America, the lead arranger of a $3.8 billion line of credit that matured in October.

ProLogis Chief Financial Officer Bill Sullivan said the company tapped Bank of America to run the stock offering because of the lending relationship.

“Our view, very consciously, was, ‘Hey, let’s let these guys make some money … and that will help us as we go to deal with some of the bank-line issues,’” Mr. Sullivan said.

REITs became desperate for equity capital last year as most sources of debt financing shut down. Publicly traded REITs raised about $24 billion in equity, almost double their 2008 total, according to Dealogic.

Bank of America was the “left bookrunner” of 39 of the 78 stock offerings by existing publicly traded REITs in 2009, according to Dealogic. The title of left bookrunner usually is awarded to the investment bank that leads a stock offering, and that bank often receives a disproportionate take of the fees. Dealogic data show that Bank of America earned $208 million in fees from REIT equity offerings in 2009, nearly double second-place J.P. Morgan Chase & Co.

Bank of America was a lead lender to REITs in 26 of the 39 stock offerings in which it was the left bookrunner, according to an analysis of data provided by Dealogic and SNL Financial. For the 39 offerings in which it wasn’t the left bookrunner, Bank of America was a lead lender to only nine issuing companies.

“I have always taken the position that unless firms provide us with debt capital, we don’t give them any business,” said Debra Cafaro, chief executive of Ventas Inc., a health-care-related REIT that raised $312 million of equity in April with Bank of America as lead bookrunner. As debt became hard to come by last year, Ms. Cafaro said, that position “became an imperative” for executives across the industry.

The success of investment-banking teams like Bank of America’s cuts to the heart of the bonus debate rattling Wall Street. Former Merrill Lynch investment bankers such as Mr. Horowitz have contributed mightily to Bank of America’s profit since the merger. In the first three quarters last year, Merrill Lynch turned a profit of $2.2 billion, about a third of Bank of America’s earnings of $6.5 billion. Bank of America investment bankers are likely to get bonuses close to 2007 levels as it tries to stem defections in the wake of the takeover, according to people familiar with the situation. Mr. Horowitz declined comment on bonuses.

J.P. Morgan also saw more business in 2009. The bank earned $119 million for arranging REIT equity offerings in 2009, or 13% of all the fees earned by investment banks for arranging those deals, according to Dealogic, nearly double the bank’s market share in 2008.

To be sure, there is a flip side to Bank of America’s presence in real-estate lending. It reported in October that net charge-offs on loans in commercial real estate increased $244 million, to $873 million, in the third quarter of 2009. Dan Fitzpatrick contributed to this article

Starwood Property Trust (STWD: 19.515 +0.49%) originated three first mortgages for hotel and retail properties and invested about $32m in single-borrower commercial mortgage-backed securitizations (CMBS).

The Greenwich, CT-based real estate investment trust (REIT) said the three mortgages have a combined principal of $107.8m and have an expected unlevered return of approximately 11.3% inclusive of fees and a weighted average loan to value (LTV) of approximately 61.5%.

The loans consist of a $73.8m loan on a portfolio of 17 extended stay hotels located in Florida, Virginia, Maryland, North Carolina and Georgia, an $18m loan on a beachfront hotel located in Laguna Beach, Calif. and a $16m loan on a retail center located in Orland Park, Ill.

The CMBS investments were acquired at a blended purchase price representing 79% of face value with an expected unlevered return of 12%, Starwood said.

Starwood is externally managed and advised by SPT Management, an affiliate of Starwood Capital Group. The REIT focuses primarily on originating, investing in, financing and managing commercial mortgage loans and other commercial real estate-related debt investments.

Jon Markman over at Morning Money writes a great “thinkpiece” on commercial real estate and how it was so far stymied the chicken little’s of the talking head networks. The “next shoe to drop” has instead bolstered the REIT funds with $17 billion in cash infusions to take advantage of these remarkable revaluings.Take 5 minutes and go through our market and try to see if the contrarian view might be the most profitable one for the long term investor. Full story here.

Of all the independent institutional research that I receive, some of my favorite comes from Justin Mamis, a veteran of all the financial wars we’ve seen over the past five decades.

Although he’s steadfastly bearish, no matter the climate – like those codgers you see wearing heavy coats on sunny days in Florida – the Canadian analyst has lasted so long because he’s quick with colorful phrases, and his research is amusing and insightful.

Just last week, Mamis recounted a conversation he had enjoyed years ago at the table of his new boss, the legendary analyst/historian/portfolio manager Don Coxe: “At dinner, [Coxe] would lean back in his chair in that professorial manner of his and “remind” the guests that the Sanhedrin, the Hebrew Court of Law, had a rule that if every member voted the same way, the decision went the other way,” Mamis wrote. “Unanimity had to be misguided.”

That story got me thinking: What is one investment theme that the public and/or pros could agree on today?

It’s a totally subjective question, meaning everyone will have a different answer. But I figured that would be a great “thought exercise” and came up with three statements I’ll bet virtually everyone would agree with. They are:

• U.S. healthcare reform will fail.
• The U.S. budget is out of control.
• China will dominate this century.
• Commercial real estate is still a disaster waiting to happen worldwide.

The odd thing about that last statement is that – across the board – commercial real estate stocks have been among the strongest performers over the past few months. But it’s been a very quiet move, generating little in the way of attention.

Coming off a hellacious decline, these stocks are now enjoying solid uptrends. Although not quite as cheap as they were a year ago, these stocks are still well off their highs, and feature still-low valuations. Add in their expected income streams and it’s understandable why these stocks are still the “go-to” choices for a lot of fund managers.

These stocks make a lot of sense. Unlike manufacturers who are dependent on hit products and flaky vendors, most real estate owners have long-term contractual obligations that have offered surprising stability in this tough economy. For instance, take SL Green Realty Corp (NYSE: SLG), the largest owner of office real estate in New York.

As you may have heard, that’s a city where a lot of too-big-to-fail financial companies reside.

Since real estate is such a capital-intensive industry, it is battered during the sort of capital famine seen last year. But the credit bull market is enabling companies with good collateral to refinance their debts, a transformation that’s helped real estate investment trusts (REITs) to raise more than $17 billion since the start of 2009. The REITs have used this infusion to shore up their balance sheets and to acquire properties from less-adroit owners. As part of its recent earnings reports, SL Green has reported that the government’s direct aid to banks has directly it to maintain a high occupancy rate and steady rents.

I talked about this a lot in the summer, and will stick to my guns: There’s no reason that REITs like SL Green can’t get back to their share-price levels of September 2008 at minimum over the next year or two. For SL Green that would require a return to an $85 share price – a 78% return from Wednesday’s closing price of $47.70.

The REITs are not yet back to paying the big dividends for which they used to be loved — which is why oil-and-gas master limited partnerships (MLPs) like our Linn Energy LLC (NASDAQ: LINE) have become so popular. But those REIT payouts will return.

I recognize it’s still tough out there for property owners: My office lease in downtown Seattle is up, and the owner offered me twice the space in a better building (with an awesome Puget Sound view) for nearly the same amount I’m paying now – if I agreed to take a longer contract. I’m taking them up on the offer, recognizing that’s the kind of deal-making going on now to get the real-estate industry through 2009-2010 rough patch.

But don’t get hung up on what’s happening now. Investors should be valuing REITs on their prospects for 2011-2012 prospects. For now the vote is that they’ll be much better.

We’ll discuss this more as the New Year advances. In the meantime, if you are a commercial property lessor, lesee, broker or developer, I welcome your thoughts.

http://jacksonville.com/business/2010-01-03/story/amendment_4_a_bad_idea_for_florida

BY ABEL HARDINGSTORY UPDATED AT 11:17 PM ON MONDAY, JAN. 4, 2010

When Florida voters go to the polls in 11 months, they’ll vote for a new governor and U.S. senator. They’ll also decide the fate of Amendment 4, which has the potential to clog future ballots and repeatedly drag voters to the polls to approve every future change to a county’s comprehensive plan.

In Duval County, that would have meant dozens of additional ballot items in 2009 – a depressed year in real estate.

It’s not hard to see why Amendment 4 – or the Hometown Democracy initiative as it is known – is attractive to some. In a bid to “boost growth,” the Florida Legislature rolled back much of the state’s growth management laws in the past legislative session. In a state where debate has raged for decades over the negative effects of unplanned growth, the move was both surprising and disappointing.

Amendment 4, which would require referenda for every change to Jacksonville’s comprehensive plan, is not the answer.

In 2006, the small town of St. Pete Beach passed legislation similar to the Hometown Democracy initiative. The results have been ruinous.

St. Pete Beach learned quickly that voter-approved comprehensive plan changes can be both cumbersome and expensive. After developers and community leaders launched a campaign to push through a new growth management plan that narrowed the city’s version of its Hometown Democracy-style laws, St. Pete Beach was sued. Hundreds of thousands of dollars in legal fees later, development slowly returned.

Both sides of the debate have tried to spin the St. Pete Beach story to their benefit. Opponents argue that development would grind to a halt and courts would be flooded with legal challenges. Supporters assert that the lack of a defined process – where planners reviewed changes, a commission voted in favor of them and voters had the ultimate say – was what was responsible for St. Pete Beach’s problems.

There is no doubt that Florida must get serious about smarter development. The glut of unoccupied homes around the state is testament to the fact that developers greatly overestimated demand, and that local governments failed to provide necessary checks and balances.

But, by subjecting every change to a county’s comprehensive plan to a referendum, voters are giving elected officials license to stop doing their jobs.

In Duval County, Jacksonville City Council members are charged with responsibly amending our comprehensive plan. If they fail to exercise those duties in a trustworthy manner – and there are certainly times when they have not over the years – then they should be replaced in the next election.

According to the Duval County Supervisor of Elections Office, the last election called in North Florida, which featured a state Senate seat and two Atlantic Beach races, cost taxpayers nearly $700,000 and voter turnout was less than 4 percent. One can only imagine the cost to taxpayers that scores of additional ballot initiatives would create, not to mention the difficulty associated with getting voters to the polls.

Amendment 4 is not the way to solve Florida’s growth problems. Electing honorable officials and holding them accountable is.