According to CBRE's newly released Americas Investor Intentions Survey 2018, a prolonged period of U.S. economic growth, as well as tax cuts and favorable regulatory changes, means that commercial real estate investors are more positive going into 2018 than they were at the start of last year.
The 2018 survey results reveal that the largest share (45%) of investors plan to increase their level of acquisitions in the Americas compared with last year. This pick-up in investor appetite marks a reversal from the downward or flat trend recorded in the prior two surveys. In total, 88% of investors plan to either maintain or increase spending in 2018--up from 83% in 2017. Just 12% of investors plan to reduce their purchases in 2018, lower than the 17% in 2017.
Investors see a "global economic shock" that undermines occupier demand (30%) as the greatest potential threat in 2018, slightly more than last year (22%). In contrast, investors are less worried about interest rates rising more quickly than expected this year (16% in 2018 vs. 21% in 2017).
"Despite the possibility of escalating interest rates, the vast majority of investors intend to acquire assets in the Americas in 2018. Risk tolerance is expected to remain unchanged, but investors' search for yield and asset diversification is pushing them toward value-add assets, secondary markets and "alternatives" in 2018," said Brian McAuliffe, President, Institutional Properties, Capital Markets, CBRE.
"Investors anticipate that the occupier trends with the greatest impact on real estate investments are last-mile logistics, flexible space, and less reliance on traditional office and retail. Investors are assessing the risk of high proportions of coworking space within a property on its long-term liquidity and residual value. Sustainability continues to factor into decision-making but is not a top priority for investors," added Mr. McAuliffe.
U.S. gateway cities continue to command considerable interest. Los Angeles/Southern California is the top-ranked metro for property purchases, followed by Dallas/Ft. Worth and New York. As investors maintain their pursuit of good secondary assets, large upward shifts brought Nashville, Portland, and Tampa/St. Petersburg into the top 10.
Among the five different asset strategies--core, good secondary, value-add, opportunistic and distressed--value-add remains the preferred strategy (34%), but is down from 2017's level (41%). Investor appetite for good secondary assets increased for the fourth consecutive year, as the supply of core assets diminishes and investors broaden their search for yield. Institutional investors--comprising sovereign wealth funds, insurance companies, and pension funds--are more interested in core assets than are other types of investors, with 33% indicating core as their preferred strategy vs. 20% of overall investors.
"Given the declining return environment, it is no surprise that investors are racing to find the next Seattle by increasing their focus on the higher-yield potential of high-growth secondary markets. Investors are also moving further out on the risk spectrum to look for more opportunistic equity deals. Markets like Tampa Bay, Nashville, Montreal and Portland all rose substantially in investor interest this year, not only because of superior current yields than the majors, but for the single most important factor of all: higher projected office-using job growth. Investing in markets with the fastest job growth can lead to greater NOI growth and additional cap rate compression even in a rising interest rate environment," said Spencer Levy, Head of Research, Americas, CBRE.
Industrial is increasingly the preferred property type, cited by 50% of investors as the most attractive for investment in 2018, up from 38% in 2017. Multifamily (20%) and office (14%) are the next attractive property types, though their shares decreased from last year. Despite competition from e-commerce, the retail sector improved modestly from last year, attracting 10% of investors compared to 8% in 2017.
Investor interest in "alternatives" strengthened across most sectors. Real estate debt (37%) is the number one alternative currently held by most investors and will be targeted most actively this year. Student housing, senior housing, and healthcare are the next most common alternatives, each held by roughly 20% of investors.
The breakdown of anticipated capital deployment amounts is roughly comparable to 2017, although expectations for larger purchases in the $2 to 5 billion range are noticeably higher (14% in 2018 vs. 9% in 2017). Institutional investors have different expectations than the average investor, with half intending to deploy more than $1 billion of capital this year, and one-third intending to deploy more than $2 billion (compared to 28% and 18%, respectively, for other investor types).
(http://www.worldpropertyjournal.com/real-estate-news/united-states/...)
Tuesday, March 6, 2018
Thursday, March 1, 2018
Brickell Bay Drive plan would add 700 apartments, hotel
A plan for Brickell Bay Drive bayfront would amass more than 700 apartments and nearly 260 hotel rooms along with new retail.
The property at 1111 Brickell Bay Drive already houses the 32-story Yacht Club at Brickell apartments, which would be redeveloped, adding a 61-story apartment tower and garage.
The project was the last on the Nov. 16 agenda of Miami’s Urban Development Review Board. The meeting was running long and when the case was called, developers’ attorney Iris Escarra asked for a deferral to Dec. 21, saying it will give the developer more time for community outreach “to work with our neighbors.”
The site is across the street from Florida East Coast Realty’s Panorama Tower, an 83-story mixed-use project now rising at 1101 Brickell Ave.
Amico Yacht Club at Brickell LLC proposes the mixed-use project for the 2.4 acres, calling it “a mixed-use luxury retail, hotel and apartment residences development.”
Plans call for redeveloping the current apartment building into hotel, residential, commercial and retail (258 hotel rooms, 178 residences), a new 961-space garage, new residential liner units along Biscayne Bay, a new 61-story apartment building and retail.
Plans from Stantec Architecture Inc. show 15,486 square feet of commercial and retail and 34,669 square feet of offices.
Zoning permits 48 stories, reaching a total of 80 stories through use of the Public Benefits Program bonuses, the developer says.
The 61-story tower is to rise 690 feet 2 inches and have 560 residences.
The developer would demolish the existing garage and build an 11-story garage. Plans include a new pedestrian garden walk to and along the bay; new arrival area, resident lobby and pool deck; and floor-to-ceiling windows, glass balconies and updated interior paint and finishes on the existing building.
www.miamitodaynews.com
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The property at 1111 Brickell Bay Drive already houses the 32-story Yacht Club at Brickell apartments, which would be redeveloped, adding a 61-story apartment tower and garage.
The project was the last on the Nov. 16 agenda of Miami’s Urban Development Review Board. The meeting was running long and when the case was called, developers’ attorney Iris Escarra asked for a deferral to Dec. 21, saying it will give the developer more time for community outreach “to work with our neighbors.”
The site is across the street from Florida East Coast Realty’s Panorama Tower, an 83-story mixed-use project now rising at 1101 Brickell Ave.
Amico Yacht Club at Brickell LLC proposes the mixed-use project for the 2.4 acres, calling it “a mixed-use luxury retail, hotel and apartment residences development.”
Plans call for redeveloping the current apartment building into hotel, residential, commercial and retail (258 hotel rooms, 178 residences), a new 961-space garage, new residential liner units along Biscayne Bay, a new 61-story apartment building and retail.
Plans from Stantec Architecture Inc. show 15,486 square feet of commercial and retail and 34,669 square feet of offices.
Zoning permits 48 stories, reaching a total of 80 stories through use of the Public Benefits Program bonuses, the developer says.
The 61-story tower is to rise 690 feet 2 inches and have 560 residences.
The developer would demolish the existing garage and build an 11-story garage. Plans include a new pedestrian garden walk to and along the bay; new arrival area, resident lobby and pool deck; and floor-to-ceiling windows, glass balconies and updated interior paint and finishes on the existing building.
www.miamitodaynews.com
ADVERTISEMENT
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61-story residential tower on Brickell bayfront advances
Major projects in Wynwood, Brickell, Flagler OK’d
Brickell’s brand booms out west too
1,771 Miami Worldcenter residences OK’d
Brazilian plans 200-room hotel on Miami River
Brickell’s boom continues to inch westward
92-story downtown tower OK’d for Miami’s skyline
Deal set for public-private downtown Miami retail,…
Murals key to mixed-use project for Edgewater
Big-name developers vie to build at Metrorail
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Partners float a heads-up idea for Miami-to-Beach transit
Brightline owner offers to develop Miami-Dade County courthouse
Components of vast Miami Worldcenter coming together
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Tuesday, February 27, 2018
Florida remained the top destination of foreign buyers purchasing U.S.
Florida remained the top destination of foreign buyers purchasing U.S. residential real estate in 2017, with 22 percent of all foreign buyers who bought residential property in the United States. Florida Realtors® latest report, the 2017 Profile of International Residential Real Estate Activity in Florida, finds that international sales hit $24.2 billion this year, up from $19.4 billion in 2016.
The economic environment created a mix of opportunities and challenges for Florida’s foreign buyers in 2016 and 2017, according to the report’s analysts. Latin American countries faced political and economic difficulties and weaker currencies in the wake of the collapse in oil prices. Meanwhile, economic growth strengthened in Canada and the Canadian dollar stabilized against the U.S. dollar.
House prices rose in the United States, including in Florida, but the appreciation was modest compared to home price appreciation in Canada. Amid these challenges and opportunities, overall foreign buyer purchases of Florida residential property increased: the share of buyers from Canada rose, the share of buyers from Latin America and Europe declined and the share of buyers from Asia and Africa remained unchanged.
The report is based on an annual study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors. It presents information relating to residential transactions with international clients of Florida’s Realtors as well as information on U.S. clients seeking to purchase property abroad during the 12-month period of August 2016-July 2017. In this report, the year 2017 refers to the 12-month period August 2016–July 2017, and the year 2016 refers to the period August 2015–July 2016. A total of 6,551 Realtors responded to this year’s survey, conducted Aug. 7-Sept. 9, 2017.
The survey considers only residential purchases in the state.
Report highlights
Foreign purchases in the state increased to $24.2 billion, a $4.8 billion increase from 2016’s $19.4 billion.
Foreign transactions accounted for 21 percent of Florida’s residential dollar volume of sales, a 2 percent increase year-to-year. Nationally, foreign buyers comprised 10 percent of the dollar volume of existing sales.
Foreign buyers purchased 61,300 Florida properties (47,000 in 2016), which made up 15 percent of Florida’s residential market (12 percent in 2016). Nationally, foreign buyer residential purchases accounted for five percent of existing-home sales.
The median purchase price paid by foreign buyers increased to $259,400 ($252,500 in 2016), which was in line with the overall increase in Florida prices.
The median price paid by foreign buyers was 18 percent higher than the median price paid by all Florida buyers.
Nationalities of Florida’s foreign residential buyers
Latin American and Caribbean buyers accounted for the largest portion of Florida foreign buyers (34 percent), though this group made up 39 percent the previous year.
Canadian buyers increased to 22 percent (19 percent in 2016).
Other countries remained consistent year-to-year: The share of European buyers was unchanged at 23 percent; Asian buyers at 10 percent; and African buyers at one percent.
Most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (53 percent); Orlando-Kissimmee-Sanford (11 percent); Tampa-St. Petersburg-Clearwater (nine percent); Cape Coral-Fort Myers (six percent); and North Point-Sarasota-Bradenton (five percent).
Transaction details
72 percent of foreign buyers made an all-cash purchase.
68 percent of foreign buyers purchased residential property for vacation, residential rental or for both uses (72 percent in 2016); 49 percent bought a townhouse or condominium (52 percent in 2016).
35 percent (40 percent in 2016) purchased in a central city/urban area; 15 percent purchased in a resort area (14 percent in 2016).
93 percent of foreign buyers visited Florida at least once before purchasing a property (92 percent in 2016).
Florida clients searching properties abroad
17 percent of Florida’s Realtors said they had a client seeking to purchase property abroad, up from 14 percent in 2016.
Top countries of interest from Florida residents looking elsewhere: Colombia, Costa Rica, Spain, Canada and the Dominican Republic.
75 percent were interested in residential property (79 percent in 2016).
75 percent intended to use the property for vacation, residential rental or both uses (84 percent in 2016).
Florida’s Realtors interaction with international clients
While international business rose, fewer Realtors in Florida (44 percent) said they worked with an international client in 2017 (48 percent in 2016).
61 percent of Realtors said they did not have cultural and language problems.
Personal contacts, previous clients and business contacts accounted for 72 percent of referrals or leads.
An agent’s firm, franchise website or social media was the primary source of online leads, followed by other aggregator websites and realtor.com®.
Respondents were evenly split about the outlook in the next 12 months: 43 percent expected the same or an increase in international clients, 42 percent expected a decrease, and 15 percent had no opinion.
56 percent expect foreign retirees to be potential clients.
The economic environment created a mix of opportunities and challenges for Florida’s foreign buyers in 2016 and 2017, according to the report’s analysts. Latin American countries faced political and economic difficulties and weaker currencies in the wake of the collapse in oil prices. Meanwhile, economic growth strengthened in Canada and the Canadian dollar stabilized against the U.S. dollar.
House prices rose in the United States, including in Florida, but the appreciation was modest compared to home price appreciation in Canada. Amid these challenges and opportunities, overall foreign buyer purchases of Florida residential property increased: the share of buyers from Canada rose, the share of buyers from Latin America and Europe declined and the share of buyers from Asia and Africa remained unchanged.
The report is based on an annual study done by the National Association of Realtors® (NAR) in cooperation with Florida Realtors. It presents information relating to residential transactions with international clients of Florida’s Realtors as well as information on U.S. clients seeking to purchase property abroad during the 12-month period of August 2016-July 2017. In this report, the year 2017 refers to the 12-month period August 2016–July 2017, and the year 2016 refers to the period August 2015–July 2016. A total of 6,551 Realtors responded to this year’s survey, conducted Aug. 7-Sept. 9, 2017.
The survey considers only residential purchases in the state.
Report highlights
Foreign purchases in the state increased to $24.2 billion, a $4.8 billion increase from 2016’s $19.4 billion.
Foreign transactions accounted for 21 percent of Florida’s residential dollar volume of sales, a 2 percent increase year-to-year. Nationally, foreign buyers comprised 10 percent of the dollar volume of existing sales.
Foreign buyers purchased 61,300 Florida properties (47,000 in 2016), which made up 15 percent of Florida’s residential market (12 percent in 2016). Nationally, foreign buyer residential purchases accounted for five percent of existing-home sales.
The median purchase price paid by foreign buyers increased to $259,400 ($252,500 in 2016), which was in line with the overall increase in Florida prices.
The median price paid by foreign buyers was 18 percent higher than the median price paid by all Florida buyers.
Nationalities of Florida’s foreign residential buyers
Latin American and Caribbean buyers accounted for the largest portion of Florida foreign buyers (34 percent), though this group made up 39 percent the previous year.
Canadian buyers increased to 22 percent (19 percent in 2016).
Other countries remained consistent year-to-year: The share of European buyers was unchanged at 23 percent; Asian buyers at 10 percent; and African buyers at one percent.
Most foreign buyers were concentrated in five metropolitan areas: Miami-Fort Lauderdale-West Palm Beach (53 percent); Orlando-Kissimmee-Sanford (11 percent); Tampa-St. Petersburg-Clearwater (nine percent); Cape Coral-Fort Myers (six percent); and North Point-Sarasota-Bradenton (five percent).
Transaction details
72 percent of foreign buyers made an all-cash purchase.
68 percent of foreign buyers purchased residential property for vacation, residential rental or for both uses (72 percent in 2016); 49 percent bought a townhouse or condominium (52 percent in 2016).
35 percent (40 percent in 2016) purchased in a central city/urban area; 15 percent purchased in a resort area (14 percent in 2016).
93 percent of foreign buyers visited Florida at least once before purchasing a property (92 percent in 2016).
Florida clients searching properties abroad
17 percent of Florida’s Realtors said they had a client seeking to purchase property abroad, up from 14 percent in 2016.
Top countries of interest from Florida residents looking elsewhere: Colombia, Costa Rica, Spain, Canada and the Dominican Republic.
75 percent were interested in residential property (79 percent in 2016).
75 percent intended to use the property for vacation, residential rental or both uses (84 percent in 2016).
Florida’s Realtors interaction with international clients
While international business rose, fewer Realtors in Florida (44 percent) said they worked with an international client in 2017 (48 percent in 2016).
61 percent of Realtors said they did not have cultural and language problems.
Personal contacts, previous clients and business contacts accounted for 72 percent of referrals or leads.
An agent’s firm, franchise website or social media was the primary source of online leads, followed by other aggregator websites and realtor.com®.
Respondents were evenly split about the outlook in the next 12 months: 43 percent expected the same or an increase in international clients, 42 percent expected a decrease, and 15 percent had no opinion.
56 percent expect foreign retirees to be potential clients.
Home Sellers Can Take Steps Now for a Great Spring Landscape
Thinking of selling a home in the spring? Then now is a good time to get in the yard and prepare the landscaping. Many home sellers focus on indoor projects and forget that the first thing potential buyers see is the home’s curb appeal – the landscaping and yard.
Fall is the best time to lay the groundwork for a springtime yard that will attract buyers, according to the Outdoor Power Equipment Institute. Attractive landscaping can help improve curb appeal, adding as much as 17 percent to the sale price of a home, studies show. To help homeowners prepare their yards, the Institute shares several tips:
Nurture healthy turf. Fall is the time to aerate the soil by punching holes in it so oxygen, water and nutrients can reach the grass roots. Continue mowing your lawn as needed throughout the fall.
Trim it short. For the last two cuttings of the year, lower your mower blade to its lowest setting so your grass gets a tighter cut. This will enable more sun to reach the crown of the grass – and you’ll see fewer brown leaves in your lawn. Be careful to leave one third of the grass blade in place.
Rake or collect the leaves. It may be tempting to wait until all the leaves fall off the trees before clearing them up, but don’t delay. Leaves on the ground block the grass from sunlight – suffocating your grass – and can also breed fungus. Remove the leaves, compost or mulch them, or dispose of them.
Load up on grass nutrients. Use a mulching mower to shred and return cut grass back to the lawn. You can also finely mulch your leaves and distribute them on your lawn. Shredded leaves can help control weeds and load your lawn with nutrients for a long winter.
Fix the bald spots. Fall is a good time to fix those bald spots in your lawn. Get a lawn repair mixture at your area garden shop and follow the directions.
Taking these steps can help boost your curb appeal with a healthy lawn in the spring.
Fall is the best time to lay the groundwork for a springtime yard that will attract buyers, according to the Outdoor Power Equipment Institute. Attractive landscaping can help improve curb appeal, adding as much as 17 percent to the sale price of a home, studies show. To help homeowners prepare their yards, the Institute shares several tips:
Nurture healthy turf. Fall is the time to aerate the soil by punching holes in it so oxygen, water and nutrients can reach the grass roots. Continue mowing your lawn as needed throughout the fall.
Trim it short. For the last two cuttings of the year, lower your mower blade to its lowest setting so your grass gets a tighter cut. This will enable more sun to reach the crown of the grass – and you’ll see fewer brown leaves in your lawn. Be careful to leave one third of the grass blade in place.
Rake or collect the leaves. It may be tempting to wait until all the leaves fall off the trees before clearing them up, but don’t delay. Leaves on the ground block the grass from sunlight – suffocating your grass – and can also breed fungus. Remove the leaves, compost or mulch them, or dispose of them.
Load up on grass nutrients. Use a mulching mower to shred and return cut grass back to the lawn. You can also finely mulch your leaves and distribute them on your lawn. Shredded leaves can help control weeds and load your lawn with nutrients for a long winter.
Fix the bald spots. Fall is a good time to fix those bald spots in your lawn. Get a lawn repair mixture at your area garden shop and follow the directions.
Taking these steps can help boost your curb appeal with a healthy lawn in the spring.
Thursday, February 22, 2018
Home sales, prices rose in all three SoFla counties in January: Florida Realtors
Miami-Dade had the strongest month with a 5.3% rise in resi sales...
New year, new South Florida? Home sales were up in Miami-Dade, Broward and Palm Beach counties at the start of 2018, according to new reports from the Florida Realtors. Median prices were also on the rise.
The higher sales figures follow a slow 2017. Despite an overall increase in residential dollar sales volume in South Florida’s three counties last year, the number of sales fell.
Miami-Dade
Residential sales posted the biggest overall increase in the tri-county region, rising 5.3 percent year-over-year to 1,820 closings in January. Single-family home sales lagged behind condo and townhouse sales, increasing only 2.1 percent to 875. Condo sales rose 8.1 percent to 945.
The median price for a house was $330,000 last month, up 6.5 percent from the previous year, and the median price for a condo was $230,000, an annual increase of about 3.5 percent.
Broward
In Broward, residential sales totaled 2,146 in January, up 3.67 percent year-over-year. The increase is thanks to a big leap in condo sales and a slight drop in single-family home closings. Condo and townhouse sales rose 7.8 percent to 1,167, while three fewer houses sold, a 0.3 percent decline to 979 closings.
The median price of a single family home increased 10.8 percent to $345,000, and the median price of a condo rose 8.8 percent to $156,000.
Palm Beach
The northernmost county experienced a smaller bump in residential sales in January. Closings increased only 1 percent to 2,014 due to a 3.8 percent drop in single-family home sales, which totaled 1,103 last month. Condos and townhouse sales lept 7.6 percent to 911 closings.
But home prices continued their steady rise. The median price for a single-family home in Palm Beach County was $325,000 in January, a 4.8 percent increase. The median price for a condo/townhouse was $170,000, up a whopping 13.3 percent.
Tags: home prices, home sales, Residential Real Estate
New year, new South Florida? Home sales were up in Miami-Dade, Broward and Palm Beach counties at the start of 2018, according to new reports from the Florida Realtors. Median prices were also on the rise.
The higher sales figures follow a slow 2017. Despite an overall increase in residential dollar sales volume in South Florida’s three counties last year, the number of sales fell.
Miami-Dade
Residential sales posted the biggest overall increase in the tri-county region, rising 5.3 percent year-over-year to 1,820 closings in January. Single-family home sales lagged behind condo and townhouse sales, increasing only 2.1 percent to 875. Condo sales rose 8.1 percent to 945.
The median price for a house was $330,000 last month, up 6.5 percent from the previous year, and the median price for a condo was $230,000, an annual increase of about 3.5 percent.
Broward
In Broward, residential sales totaled 2,146 in January, up 3.67 percent year-over-year. The increase is thanks to a big leap in condo sales and a slight drop in single-family home closings. Condo and townhouse sales rose 7.8 percent to 1,167, while three fewer houses sold, a 0.3 percent decline to 979 closings.
The median price of a single family home increased 10.8 percent to $345,000, and the median price of a condo rose 8.8 percent to $156,000.
Palm Beach
The northernmost county experienced a smaller bump in residential sales in January. Closings increased only 1 percent to 2,014 due to a 3.8 percent drop in single-family home sales, which totaled 1,103 last month. Condos and townhouse sales lept 7.6 percent to 911 closings.
But home prices continued their steady rise. The median price for a single-family home in Palm Beach County was $325,000 in January, a 4.8 percent increase. The median price for a condo/townhouse was $170,000, up a whopping 13.3 percent.
Tags: home prices, home sales, Residential Real Estate
Saturday, February 10, 2018
First phase of Jungle Island’s multimillion-dollar renovation to open this year
Jungle Island is getting back on track with its multimillion-dollar renovation after Hurricane Irma forced its closure in September.
The first phase, expected to cost $16 million, is underway and the park is projected to reopen in late spring with new attractions. ESJ Capital Partners paid $60 million for the property in April with major redevelopment plans.
Irma caused substantial damage to the 18.5-acre property, including knocking down a zipline tower under construction, according to the Miami Herald.
New attractions include an indoor trampoline park near the entrance, an outdoor skydiving wind tunnel, a beach restaurant, and a new children’s playground with interconnected tree houses.
In July, Jungle Island’s owners pulled their request for a 39-year lease extension and a deal allowing for the development of a $50 million hotel next to the Watson Island theme park after facing stiff opposition from nearby residents. [Miami Herald] – Amanda Rabines
The first phase, expected to cost $16 million, is underway and the park is projected to reopen in late spring with new attractions. ESJ Capital Partners paid $60 million for the property in April with major redevelopment plans.
Irma caused substantial damage to the 18.5-acre property, including knocking down a zipline tower under construction, according to the Miami Herald.
New attractions include an indoor trampoline park near the entrance, an outdoor skydiving wind tunnel, a beach restaurant, and a new children’s playground with interconnected tree houses.
In July, Jungle Island’s owners pulled their request for a 39-year lease extension and a deal allowing for the development of a $50 million hotel next to the Watson Island theme park after facing stiff opposition from nearby residents. [Miami Herald] – Amanda Rabines
Tuesday, January 2, 2018
How to achieve a price reduction in new luxury developments.
How to achieve a price reduction in new luxury developments? Obtaining it depends on the location of the property, the market cycle and other factors!
Regardless of the market, buyers or investors interested in buying a property in a new building always request some type of concession to close the deal. And almost always, a price cut is your main request, experts say.
About 99% of concession talks are based on prices. While developers may offer increased agent commissions or a package of furniture, buyers often do not care about those incentives too much. The number of developers willing to negotiate depends on many factors specific to each project, such as the city where it is located and how the project is doing in the market, how the developer financed the construction, and whether it is necessary to pay the lenders in a timely manner. specific and the supply or inventory of similar projects with units of similar price in the area.
Market factors drive price reduction trends. When you see concessions in a period of five to 10 years and track what developers are willing to compromise to close a deal, some specific trends of the city emerge based on the fluctuations of the local luxury market.
What is the right time to buy in a new development?
Each new development, regardless of the market, has a strategy to launch its sales and release inventory, whose details are dictated by who is developing the project, where it is located, how big it is, the price of the units, the target market and other factors.
For example, the sales team for a development of more than 500 units in downtown Miami could open a multimillion-dollar off-site sales office, with a full model unit, months before construction begins. The strategy could be to launch offering 15% of the inventory on building plans and increase prices at each subsequent launch until it is completed and all units are sold in two or three years. On the other hand, the sales team of a luxury boutique project could postpone the launch of sales until the building is finished so that potential buyers can enter the kitchens and bathrooms, see the spaces of recreation and experience the view. They can choose to launch some units at a time, in three or five stages, to maintain consumer interest. Regardless of these differences, developers and agents always publish the inventory of a new building in stages, each including some units of choice, for the same reason: Every time you have a lot of something, it is difficult to create urgency. Each phase should have something to drive traffic and be a small representation of the building itself.
In Miami, where there are many new luxury developments competing for the attention of buyers at this time, price cuts in the range of 3% to 8% are typical.
This represents a significant change from about five years ago, when new developments were moving at a feverish pace, and there was not enough inventory to meet the buyer's demand. That was a time when the developers did not negotiate at all. The current market is very different because of high inventory levels and the competitive landscape.
However, the new buildings designed by renowned architects that are being built in the most coveted locations, still stand firm in price and achieve sales speed. In nearby Sunny Isles Beach, where there is an oversupply of luxury inventory that is sold too slowly to the liking of many developers, substantial discounts on prices are common.
While the market is much better than it was in 2009, when there were massive defaults, inventory is sold so slowly that discounts of 15% to 20% are typical, and discounts of more than 30% are not out of the question. Two or three years ago, a 5% discount was more common, but that was when the sales momentum was better. "Some projects are practically selling all their inventory with discounts, because they have to pay their lender.
Meanwhile, in Boca Raton, Florida, north of Miami, e, in Boca Raton, Florida, north of Miami, the situation is more optimistic. An oceanfront building with high-end amenities, located in a country club community, is unique to the area, they have not had to negotiate much about the price. That includes purchases in which they have sold several condominiums to a buyer to create a giant-sized unit. In this case, the only people who got a "discount" were the buyers who entered first.
When a price concession is not possible, developers often offer other concessions to improve the deal and make the sale more attractive from a financial point of view, specifically in markets where buyers have a surplus of options. A developer who can not offer a price cut could offer to pay the stamp duty surcharge. Agents are also not immune to the temptation of an incentive aimed at attracting buyers, some developers in will increase the agent's typical commission from 3% to 4% to encourage them to bring more customers.
(Ref: https://www.mansionglobal.com/es/articles/80952-como-lograr-una-rebaja-de-precio-en-desarrollos-nuevos-de-lujo)
Regardless of the market, buyers or investors interested in buying a property in a new building always request some type of concession to close the deal. And almost always, a price cut is your main request, experts say.
About 99% of concession talks are based on prices. While developers may offer increased agent commissions or a package of furniture, buyers often do not care about those incentives too much. The number of developers willing to negotiate depends on many factors specific to each project, such as the city where it is located and how the project is doing in the market, how the developer financed the construction, and whether it is necessary to pay the lenders in a timely manner. specific and the supply or inventory of similar projects with units of similar price in the area.
Market factors drive price reduction trends. When you see concessions in a period of five to 10 years and track what developers are willing to compromise to close a deal, some specific trends of the city emerge based on the fluctuations of the local luxury market.
What is the right time to buy in a new development?
Each new development, regardless of the market, has a strategy to launch its sales and release inventory, whose details are dictated by who is developing the project, where it is located, how big it is, the price of the units, the target market and other factors.
For example, the sales team for a development of more than 500 units in downtown Miami could open a multimillion-dollar off-site sales office, with a full model unit, months before construction begins. The strategy could be to launch offering 15% of the inventory on building plans and increase prices at each subsequent launch until it is completed and all units are sold in two or three years. On the other hand, the sales team of a luxury boutique project could postpone the launch of sales until the building is finished so that potential buyers can enter the kitchens and bathrooms, see the spaces of recreation and experience the view. They can choose to launch some units at a time, in three or five stages, to maintain consumer interest. Regardless of these differences, developers and agents always publish the inventory of a new building in stages, each including some units of choice, for the same reason: Every time you have a lot of something, it is difficult to create urgency. Each phase should have something to drive traffic and be a small representation of the building itself.
In Miami, where there are many new luxury developments competing for the attention of buyers at this time, price cuts in the range of 3% to 8% are typical.
This represents a significant change from about five years ago, when new developments were moving at a feverish pace, and there was not enough inventory to meet the buyer's demand. That was a time when the developers did not negotiate at all. The current market is very different because of high inventory levels and the competitive landscape.
However, the new buildings designed by renowned architects that are being built in the most coveted locations, still stand firm in price and achieve sales speed. In nearby Sunny Isles Beach, where there is an oversupply of luxury inventory that is sold too slowly to the liking of many developers, substantial discounts on prices are common.
While the market is much better than it was in 2009, when there were massive defaults, inventory is sold so slowly that discounts of 15% to 20% are typical, and discounts of more than 30% are not out of the question. Two or three years ago, a 5% discount was more common, but that was when the sales momentum was better. "Some projects are practically selling all their inventory with discounts, because they have to pay their lender.
Meanwhile, in Boca Raton, Florida, north of Miami, e, in Boca Raton, Florida, north of Miami, the situation is more optimistic. An oceanfront building with high-end amenities, located in a country club community, is unique to the area, they have not had to negotiate much about the price. That includes purchases in which they have sold several condominiums to a buyer to create a giant-sized unit. In this case, the only people who got a "discount" were the buyers who entered first.
When a price concession is not possible, developers often offer other concessions to improve the deal and make the sale more attractive from a financial point of view, specifically in markets where buyers have a surplus of options. A developer who can not offer a price cut could offer to pay the stamp duty surcharge. Agents are also not immune to the temptation of an incentive aimed at attracting buyers, some developers in will increase the agent's typical commission from 3% to 4% to encourage them to bring more customers.
(Ref: https://www.mansionglobal.com/es/articles/80952-como-lograr-una-rebaja-de-precio-en-desarrollos-nuevos-de-lujo)
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