July 2024

Mortgage Rates Remain Flat as Housing Market Awaits Fall Changes

by Opportunities

Mortgage rates have shown little movement this week, with the average rate for a 30-year fixed home loan inching up slightly from 6.77% to 6.78%. Despite this stability, the flat mortgage rates have not revitalized the housing market, leaving potential buyers and sellers on the sidelines.

Summary of Key Points:

1. Mortgage Rates: Mortgage rates have remained essentially flat, decreasing nearly half a percent from their peak earlier this year. However, this minor change hasn’t been enough to invigorate the housing market.
2. Buyer and Seller Activity: Elevated mortgage rates are suppressing homebuyer demand and keeping potential sellers on the sidelines, impacting both affordability and inventory.
3. Future Outlook: There is hope for potential buyers as falling mortgage rates and rising inventory could help lower borrowing costs and push prices down. The Federal Reserve is also expected to implement a rate cut by September, which may further influence mortgage rates.
4. Current Market Climate: This summer, the housing market has been cooler than usual. Both new-home sales and existing-home sales have dipped. Home prices remain flat, posing affordability challenges, especially for first-time buyers.
5. Housing Stock and Market Pace: The number of homes for sale increased for the week ending July 20, continuing a trend of rising inventory. However, the pace of the market has slowed, with homes spending more time on the market compared to last year.

The housing market continues to face challenges with flat mortgage rates and high home prices. However, the potential for lower borrowing costs and increased inventory offers some hope for buyers as we move into the fall.

Source: Julie Taylor, Realtor.com

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Fort Lauderdale Marina Foreclosure: Fortress Reclaims Property

by Opportunities

Investors Gary Cioffi and Christopher Hein have surrendered the 20.2-acre Yacht Haven Park & Marina in Fort Lauderdale to Fortress Investment Group through a deed in lieu of foreclosure valued at $85.8 million. This move comes after significant capital improvements to the property.

Summary of Key Points:

1. Deed in Lieu of Foreclosure: Cioffi and Hein handed over the Yacht Haven Park & Marina to Fortress Investment Group, avoiding a foreclosure suit. This agreement ensures the lender will not pursue legal action or further payments. This type of arrangement can be beneficial for both parties as it allows for a more amicable resolution without the lengthy process of foreclosure.
2. Property Details: The 20.2-acre property, located at 2295 and 2323 West State Road 84, includes RV sites and a marina with 55 side-tie boat slips that can accommodate yachts up to 150 feet. The strategic location of the marina makes it a valuable asset, attracting numerous visitors and providing significant revenue potential.
3. Investment and Renovations: The investors purchased the property in 2021 for $58.1 million and secured an $81.7 million loan from Fortress for purchase and renovations. Over $20 million was allocated to reconfiguring the RV sites, reducing the number of pads from 265 to 222, and enhancing the marina facilities. These improvements were aimed at increasing the property’s appeal and functionality, making it a premier destination for RV and boating enthusiasts.
4. Market Challenges: South Florida’s commercial real estate market has been hit by economic challenges, including higher interest rates and increasing property insurance costs. These factors have impacted investors’ cash flow and refinancing capabilities. The market’s volatility has made it difficult for many property owners to maintain their investments and meet financial obligations.
5. Impact on Other Properties: Distress is evident across various property types in South Florida, particularly in office buildings and multifamily developments. Recent sales in the area have seen significant price cuts, reflecting the broader market difficulties. For example, Bridge Investment Group recently sold a Sunrise office complex at a 34 percent price cut, highlighting the financial strain on the market.

The return of Yacht Haven Park & Marina to Fortress Investment Group highlights the ongoing financial challenges in the South Florida real estate market. Despite significant improvements to the property, the economic environment proved too difficult for the investors to sustain their operations. This case underscores the importance of strategic planning and financial management in real estate investments.

Source: Lidia Dinkova, The Real Deal.

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SB and Hazelton Revive Controversial 55-Story Tower Project in Edgewater

by Opportunities

SB Development and Hazelton Capital Group have resubmitted their proposal for a 55-story residential tower in Edgewater, Miami. The Miami Urban Development Review Board will review the updated plans, which have faced opposition from neighboring condo owners concerned about density and impact.

1. Project Overview: SB Development and Hazelton Capital Group propose an 18-story residential tower with 463 units at 419 Northeast 19th Street in Edgewater. The project site is a 0.3-acre lot near Margaret Pace Park.
2. Design and Modifications: Designed by Fogarty Finger, the updated plans include changes to the parking podium, increasing parking spaces to 180 and adding a green wall and water fountain. The height and number of units remain the same.
3. Community Engagement: The developers claim to have worked with neighbors to create a harmonious design. They adjusted the building’s setbacks to improve sightlines for nearby residents.
4. Neighbor Concerns: Despite modifications, some Edgewater residents remain opposed due to increased traffic, safety issues, and insufficient parking. The tower’s proximity to the Cité on the Bay complex has also raised concerns about privacy and structural integrity in a flood-prone area.
5. Density Allocation Dispute: The project’s as-of-right density includes a controversial transfer of 150 units from the Cité condo association. Some Cité residents argue the transfer was improperly approved without a membership vote and continue to challenge it.
6. Zoning and Approvals: The project requires a covenant in lieu of title for final approval of the unit density and floor lot area allocation. Residents have petitioned against this, citing potential negative impacts.
7. Previous Developments: SB and Hazelton bought the site in 2022 for $12 million. Other recent Edgewater projects include Vertical Developments’ 25-story condo-hotel and Camino Capital Management’s Metro 2 mixed-use apartment building.

The revived proposal by SB Development and Hazelton Capital Group for a 55-story tower in Edgewater continues to face significant opposition from local residents. The outcome depends on the upcoming review by Miami zoning officials and the resolution of ongoing community concerns.

Source: Lidia Dinkova, The Real Deal.

Developer Proposes 2,200-Unit Multi-Tower Project in North Miami

by Opportunities

Redwood Dev Co has unveiled plans for a significant mixed-use development in North Miami, featuring nearly 2,200 residential units and substantial commercial space. This ambitious project aims to transform city-owned land, including Claude Pepper Park.

1. Project Overview: Redwood Dev Co proposes a phased development consisting of 2,193 residential units, 121,500 square feet of commercial space, and over 4,100 parking spaces across eight 18-story buildings. Kobi Karp Architecture & Interior Design is responsible for the design.
2. Location and Land: The project is planned for nearly 39 acres of city-owned land, which includes Claude Pepper Park and adjacent areas. The North Miami City Council is set to review the master development site plan.
3. Developer Details: Redwood CP Dev LLC, the applicant, is a partnership between BAS Holdings Investments and Winston Capital Partners. The leaders of these firms are Brian Sidman and David Burstyn, respectively.
4. Community Enhancements: As part of the development, the Joe Celestin community center will be expanded to include new classrooms, a computer lab, kitchen, gym, event terrace, and banquet space. Additionally, the park will be revamped with a new concession building, amphitheater, community pool with splash area, sports fields, basketball and paddle courts, and an exercise trail.
5. Timeline and Process: North Miami issued a request for proposals in August 2022, and Redwood CP Dev submitted their response in November of the same year. The city council will decide on the project’s approval.
6. Context of Other Developments: This proposal is part of a broader trend in South Florida, where numerous large-scale mixed-use projects are being proposed. Many of these developments fall under the Live Local Act, which offers incentives for workforce housing.
7. Other Notable Projects: Other significant proposals include RK Centers’ 1,050-unit complex in Coral Gate and Pablo Castro’s 3,233-unit development in West Little River.

Redwood Dev Co’s proposed multi-tower project represents a significant development for North Miami, promising to bring substantial residential and commercial growth to the area. The project’s success depends on approval from the North Miami City Council, which will review the plan in its upcoming meeting.

Source: Katherine Kallergis, The Real Deal.

Prosper Group Development in South Florida: Brickell and North Bay Village Acquisitions

by Opportunities

Prosper Group, led by Jay Roberts, is set to acquire two prime development sites in South Florida. These acquisitions mark the firm’s entry into the region with plans for luxury condo towers.

Summary of Key Points:

1. Acquisition Details: Prosper Group has inked contracts to buy a site at 1040 South Miami Avenue in Brickell for $40 million and an assemblage at 1681 and 1725 Kennedy Causeway in North Bay Village for $30.5 million.
2. First South Florida Projects: These acquisitions will be Prosper Group’s first developments in South Florida. The company is also co-developing a $600 million condo-hotel in Tampa called Ora Hotel and Residences.
3. Brickell Site Plans: The Brickell property was previously intended for a Virgin Hotel with a co-living component. Prosper plans to partner with a local condo developer to create a condo-hotel with up to 300 residential units. The site could benefit from Miami-Dade County’s rapid transit zone expansion, allowing for higher residential density.
4. North Bay Village Site Plans: In North Bay Village, Prosper plans to develop a luxury condo tower with up to 147 units and a waterfront restaurant. Presales for the units are expected to launch in the first half of next year. This site is adjacent to the planned Continuum Club and the Shuckers site, recently acquired by Ian Bruce Eichner’s firm.
5. Development Boom in North Bay Village: North Bay Village is experiencing a development boom with several high-profile projects. These include Eichner’s planned developments, Mikael Hamaoui’s Pagani-branded condo building, and Related Group and Macklowe Properties’ phased luxury condo development.
6. Additional Information: The Brickell site is currently owned by FX South Miami LLC, and the sellers of the North Bay Village properties are 1681 North Bay Village LLC and 1725 Kennedy Causeway Owner LLC. The acquisitions are expected to close later this year.

Prosper Group’s planned acquisitions in Brickell and North Bay Village mark a significant expansion into the South Florida real estate market. With plans for luxury condo developments and involvement in the ongoing development boom, Prosper is set to become a major player in the region.

Source: Katherine Kallergis, The Real Deal.