Casa Del Mar Converts to Hoter-Condo In $40M Sell-Out

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Casa Del Mar Converts to Hotel-Condo in $40M Sell-out
March 28, 2006
By Hortense Leon, Southeast Correspondent

In one of the first hotel-condo moves in the area, Casa Del Mar (pictured), a Clarion Collection hotel in Vilano Beach, Fla., is headed for conversion. The sell-out price for the five-year-old luxury property is estimated at $40 million and prices for individual units are between $329,000 and $1.8 million.

Vilano Beach is in the midst of a redevelopment jumpstarted by a 2004 change in the county's comprehensive plan for the Vilano Beach Town Center. As the land-use designations for the town center changed from commercial and residential to mixed-use, allowing condos to be built on top of commercial development, the area started becoming an upscale tourist destination, explained Laurie McIntosh, a principal at Casa del Mar broker Condo Hotel Sales and Marketing.

Robert Buckmaster, a commercial real estate broker with Premier Properties Realty Group, noted to CPN today that a condo-hotel project should do well in St. Augustine because income-generating properties allow buyers to defray the cost of a second home.

"But the question is, will you make enough revenue to cover the debt service and other expenses," he added, noting that it weighs heavily on the split between the condominium unit owner and who runs the rental operation.

It's A Deal! Boise Tower Will Rise From The Pit

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It's a deal! Boise Tower will rise from the pit

$80 million, 25-story building will get a new name, to boot

The tallest building in Idaho still will be built at 8th and Main in Boise, with construction beginning possibly later this year on an $80 million, 25-story retail/condominium project that will have 150 hotel rooms.

It just won't be called the Boise Tower.

The developer who took over the project Tuesday said his company will change the name to put some distance between the new building and the negative memories conjured up by repeated failures to get the Boise Tower built. Developer Gary D. Rogers declined to say what names are being considered.
Capital City Development Corp.'s board voted unanimously Tuesday to name Charterhouse Boise Downtown Properties LLC of McCall as the new builder of a redesigned project on the lone remaining undeveloped parcel of land in Boise's downtown core district.

The vote also ended Washington state developer Rick Peterson's decade-long struggle to get the $63 million Boise Tower off the ground.
After Monday's vote, Rogers said the cost of the soon-to-be-renamed project has risen in recent years.

"We all know what's happening with construction costs," said Rogers, the Charterhouse founder. "I wish it was still going to cost $63 million, but it's not."

Rogers said Charterhouse will help finance the project by bringing in an unnamed financial fund as a partner.
News that the long-stalled redevelopment project is moving forward comes as downtown Boise is experiencing a condo-construction boom. At least 286 units in nine other projects are planned or in progress. Last month, developer Scott Kimball said he was building The Aspen, a 17-story, 70-unit condo project on Front Street just two blocks away from the 8th-and-Main site.

The new structure would be Charterhouse's first Idaho project. Rogers' partner, James T. Knighton, predicted it will take at least six months to redesign the project and up to 24 months to build. That would set a completion date no earlier than mid-2008.
The first two floors will be for retail space and support facilities. Four floors will be devoted to parking, and six floors to the hotel. The top 12 floors will be condos. The condominiums - as many as 86 - will sell for between $400,000 and $1.5 million, Rogers said.

Several hotel chains have expressed interest in owning the new hotel space, he said.

The addition of 150 hotel rooms in the unnamed structure will give the city more than 1,300 rooms within a mile of the convention center, said Pat Rice, general manager of the Boise Centre on The Grove.
"It certainly can't hurt. And it will give some of the dated hotel properties downtown a reason to upgrade in order to compete," Rice said.

Rogers said the attractiveness of the site was evident by the fact that a joint venture between Boise's two largest downtown landlords said at the 11th hour Monday that it was still interested in pursuing the project.
"There isn't a developer in America that doesn't want to do this deal," he said. "It just needed somebody that would step up and get it done."

The original Boise Tower has been on hold almost since ground was broken in 2001. Its open pit and partially finished foundation was a constant sore spot for frustrated downtown business owners who complained that it hurt the city's image and drove away customers.

"This will be a blessing for Boise," said Gino Vuolo, owner of Gino's Italian Ristorante across 8th street from the undeveloped Boise Tower. "We've got people coming here looking to buy land and property, and this hole looked bad for us."
The naming of a new developer was the result of a three-way deal negotiated between Charterhouse, CCDC and Peterson.

Under the terms of the agreement, CCDC will receive $950,000 to cover damages, legal fees and costs associated with a 2004 lawsuit it filed to try and oust Peterson as developer. CCDC, Boise's urban renewal agency, sold Peterson the land.
Peterson will receive an undisclosed sum to release a $12 million deed of trust he holds on the property. The deed protected what Peterson said was his investment in the project.

CCDC attorney Rick Boardman told the agency's board that the agreement would allow the three parties to avoid an April 10 court date.

"One of the significant benefits of this transaction would be to avoid years of additional litigation," Boardman said.
CCDC Executive Director Phil Kushlan said the motivation for reaching an out-court-agreement was the January decision by District Judge Kathryn Sticklen that ordered Peterson to turn over title to the property. She ruled that Peterson had violated a 1997 development agreement requiring that he complete the project by the agreed deadline.

Peterson could have tried to force a sale of the Boise Tower property, but would have had to demonstrate how much money he had tied up in the project.
"Industry estimates are that maybe he has $2.5 million in it," CCDC commissioner David Eberle said. "But at least now we're one step closer to getting this built and can get some money out of it instead of spending money on it."

Apartment Boom Buoys Market

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Article Launched: 3/28/2006 12:00 AM

Apartment boom buoys market

While single-family construction stalls, multifamily units up 64%

Gregory J. Wilcox, Staff writer LA Daily News

A 64 percent annual surge in condominium and apartment construction, most of it in Southern California, helped drive a rebound in residential construction across the state in February, a trade group said Monday. The spike also helped the entire residential construction sector grow from year-ago levels, said the California Building Industry Association. This could be the foundation for another solid year for home and apartment building, said Alan Nevin, the Sacramento-based association's chief economist. "I keep talking to builders and they tell me things are decent out there," he said. Last month, housing starts measured by building permits issued totaled 15,571 in February, up almost 8 percent from February 2005. Single-family starts totaled 8,978, down almost 14 percent from February 2005 but down just 1.4 percent from January 2006. Multifamily production, which includes condominiums and apartments, totaled 6,593 units, more than double the production levels in January. "I just think it's spring. Basically, there are people who have property and want to start (work) knowing they have a full year of good weather," Nevin said of the surge in apartment and condo construction. Nevin said that permit totals for January and February are down just 1.4 percent from the like period in 2005. "The key difference is that the number of multifamily units permitted is well ahead of last year, while single-family starts are down," he said. Most of the multifamily gain is in the Los Angeles area and is a result of numerous new rental and condominium projects in downtown Los Angeles. Builders pulled permits for 2,390 condos and apartments in the county last month, up from 818 in the year ago period and 791 in January 2006. So far this year multifamily starts in the county total 3,181 units, up almost 66 percent from the first two months of 2005 and nearly one-third of all the multifamily construction statewide, the association said. Nevin believes that the dip in single-family housing results from builders continuing to clear out their standing inventory. He expects that construction will pick up in the second quarter of the year. For the rest of this year he predicts that activity will fall slightly from last year's strong level, with builders pulling permits for between 185,000 to 205,000 homes, apartment units and condos. Layne Marceau, 2006 CBIA Chairman and a Bay Area homebuilder, said in a statement that lower production levels this year will make it harder to get ahead of still-strong housing demand, generated in large part by the fact that the state's population is growing by nearly 600,000 people a year. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that a continued strong home building sector will be a boon for the region's economy. "It looks good but a lot of people think as the market moves into the year things will slow down," Kyser said. But some of those jobs will simply shift to office and industrial projects because those markets have low vacancy rates and there is strong demand for product, Kyser said.

Apartment Boom Buoys Market

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Article Launched: 3/28/2006 12:00 AM

Apartment boom buoys market

While single-family construction stalls, multifamily units up 64%

Gregory J. Wilcox, Staff writer LA Daily News

A 64 percent annual surge in condominium and apartment construction, most of it in Southern California, helped drive a rebound in residential construction across the state in February, a trade group said Monday. The spike also helped the entire residential construction sector grow from year-ago levels, said the California Building Industry Association. This could be the foundation for another solid year for home and apartment building, said Alan Nevin, the Sacramento-based association's chief economist. "I keep talking to builders and they tell me things are decent out there," he said. Last month, housing starts measured by building permits issued totaled 15,571 in February, up almost 8 percent from February 2005. Single-family starts totaled 8,978, down almost 14 percent from February 2005 but down just 1.4 percent from January 2006. Multifamily production, which includes condominiums and apartments, totaled 6,593 units, more than double the production levels in January. "I just think it's spring. Basically, there are people who have property and want to start (work) knowing they have a full year of good weather," Nevin said of the surge in apartment and condo construction. Nevin said that permit totals for January and February are down just 1.4 percent from the like period in 2005. "The key difference is that the number of multifamily units permitted is well ahead of last year, while single-family starts are down," he said. Most of the multifamily gain is in the Los Angeles area and is a result of numerous new rental and condominium projects in downtown Los Angeles. Builders pulled permits for 2,390 condos and apartments in the county last month, up from 818 in the year ago period and 791 in January 2006. So far this year multifamily starts in the county total 3,181 units, up almost 66 percent from the first two months of 2005 and nearly one-third of all the multifamily construction statewide, the association said. Nevin believes that the dip in single-family housing results from builders continuing to clear out their standing inventory. He expects that construction will pick up in the second quarter of the year. For the rest of this year he predicts that activity will fall slightly from last year's strong level, with builders pulling permits for between 185,000 to 205,000 homes, apartment units and condos. Layne Marceau, 2006 CBIA Chairman and a Bay Area homebuilder, said in a statement that lower production levels this year will make it harder to get ahead of still-strong housing demand, generated in large part by the fact that the state's population is growing by nearly 600,000 people a year. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said that a continued strong home building sector will be a boon for the region's economy. "It looks good but a lot of people think as the market moves into the year things will slow down," Kyser said. But some of those jobs will simply shift to office and industrial projects because those markets have low vacancy rates and there is strong demand for product, Kyser said.

Metro West Development Is Approved In Fairfax

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MetroWest Development Is Approved In Fairfax

By Lisa Rein
Washington Post Staff Writer
Tuesday, March 28, 2006; A01

Fairfax County agreed last night to let a developer replace a neighborhood of 65 single-family homes at the Vienna Metro station with a massive complex of mid- and high-rise towers that could transform the way people live, commute and work in Washington's largest suburb.

The Board of Supervisors' approval of Pulte Homes' MetroWest project, after three hours of public comment, ended a contentious three-year debate over how the county should find homes for its ever-growing population.

Instead of sprawling cul-de-sacs, MetroWest will cluster offices, stores and 2,250 townhouses, condominiums and apartments south of the Vienna Station, making the project the centerpiece of an effort to concentrate development in dense, urban settings.

It's a vision that's sweeping land-use decisions from Largo to Tysons Corner, where planners and politicians -- to the chagrin of many neighbors -- are accommodating the region's demand for housing with densely packed homes on slivers of land near public transit with the goal of coaxing people from their cars.

MetroWest's many critics have argued that the mini-city will bring too many cars to the congested roads off Interstate 66 and too many riders to the crowded Orange Line. But county leaders said the cluster of 13 buildings on 56 acres will concentrate growth in the only space left in Fairfax, the Metro station's back yard.

The buildings closest to the station will feature retail stores on the ground level, with condominiums, apartments and offices above, tapering to townhouses farther from the station. The complex will be linked by narrow streets designed for pedestrians.

"We've seen people who think this [project] represents runaway growth," said Linda Q. Smyth (D-Providence), whose district includes the site. "In fact, it is just the opposite. This is growth that has been constrained. There is not density creep here."

Smyth criticized what she called a "politicization of the land-use process" during the debate on the project.

The vote late last night was 8 to 1, with Supervisor Michael R. Frey (R-Sully) opposing. Supervisor Gerald W. Hyland (D-Mount Vernon) was absent.

Frey said he could not support the project because too many MetroWest residents will compete with his constituents for space on the county's roads.

"We seem to act as if the people who don't use transit will disappear when they get off the site," he said. "They won't. The people I represent today can't find a parking space at the Metro."

The planning commission backed the project, which will be one of the county's densest developments, earlier this month.

But disappointed civic activists who fought the project's scale said their elected leaders betrayed them.

"I think there's been a breach of trust with the community," said Will Elliott, a neighboring homeowner and founder of FairGrowth, which formed largely to fight for fewer homes in MetroWest. "This is a project that has very little acceptance in the community. This isn't transit-oriented development."

At last night's hearing, critics alternated with supporters, including business leaders and environmental groups. Others said new shops will be a boon to the residential neighborhoods around the Vienna Station, the last at that end of the Orange Line.

"The inescapable and inevitable fact is that we will continue to grow," said William Lecos, president of the Fairfax County Chamber of Commerce. "But the county must grow differently than it has." He called MetroWest "the right project in the right place at the right time, built to the right scale."

But other speakers argued that MetroWest will lack sufficient incentives to encourage its residents to use Metro because the Orange Line cannot ferry them to every job, soccer game or errand. They questioned whether Pulte will build and open enough stores and offices as quickly as homes to discourage residents from driving. And they called on the supervisors to demand more open space from the developer for athletic fields and parks.

Pulte will address some of those concerns with an unusual agreement that it can be fined up to $500,000 if it cannot reduce car use by about half the number of new trips MetroWest is expected to generate.

The builder also agreed to construct more of the up to 300,000 square feet of office space and 100,000 square feet of retail space earlier in the construction process. Pulte pledged $750,000 to lay turf on an athletic field and to improve roads leading in and out of the Metro station. The development also will include 400 condominiums for retirees who, in theory, use their cars less.

But opponents said last night that the efforts fall short.

"You're ignoring the public's pleas for caution," Mark Tipton, a neighboring homeowner, told the supervisors. He called Pulte's pledge to accept fines "an excuse to grant the outrageous density in MetroWest. . . . It's like buying the right to create traffic congestion."

The MetroWest proposal, by its sheer size, generated fierce opposition from neighbors in leafy subdivisions. Town of Vienna officials down the street opposed it from the start.

The debate turned partisan last year, when Rep. Thomas M. Davis III (R-Va.), who lives in Vienna with his wife, state Sen. Jeannemarie Devolites Davis (R-Fairfax), threatened to hold up federal Metro funding if the project was not scaled down.

Condos Planned on Henderson St.

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Tue, Mar. 28, 2006
Condos planned on Henderson St. By SANDRA BAKER STAR-TELEGRAM STAFF WRITER FORT WORTH -- CityHomes, the division of Dallas-based Centex Homes that builds urban town houses, including the popular Addison Circle in Addison, has bought a small tract on Henderson Street just west of downtown where it plans a 50-unit condo development called Fronterra. Fronterra will have 50 units in a "stacked flat" configuration. The single-floor condominiums will range in size from 1,000 square feet to 1,300 square feet and in price from $200,000 to $300,000, he said. This is CityHomes' first Fort Worth project, but it won't be the company's last, said Steve Magee, vice president of land for Centex Homes' DFW division. CityHomes is looking at a few other sites in and around downtown, including a possible location in the Trinity Bluff development on the north end of downtown, Magee said. CityHomes closed the deal last week to buy the land in Fort Worth from the Moorman Meador Estate. Meador sold Oldsmobile and Chrysler cars in Fort Worth beginning in 1957 and once operated a car lot at the site. Meador died in 2003. The land is on the west side of Henderson Street bounded by Lexington, 10th and Texas streets. It includes a small parcel on the west side of Lexington Street, but not the corner of 10th and Henderson, where there is a Domino's pizza shop. Magee declined to disclose a sales price. The asking price was $1.5 million. The land is between Firestone and AMLI Upper West Side, two large apartment communities on Henderson Street developed in the 1990s to begin meeting demand for downtown residences. Magee said he expects to draw potential buyers from those complexes. Magee said CityHomes views the site as unique because of its close proximity to jobs in downtown and the medical district, as well as to entertainment in the Cultural District and Sundance Square downtown. "We haven't had a negative comment on the site yet," Magee said. Magee described the three-story building as urban and cool, with an elevation that fits the streetscape. "It's a new product for our CityHomes brand," he said. "We've been methodically moving this brand into urban settings." Fronterra will have garages that give residents internal access to their units, and the third-floor condos will have extra ceiling height, among other features, he said. The site, slightly more than an acre, will be cleared, and after infrastructure is completed, construction on the condos will begin in about eight to 10 months, he said. A vacant former Meador body shop at the corner of 10th and Lexington streets will be demolished. In addition to CityHomes' District A project in Addison Circle, the company has four projects in Dallas and one in Irving.

The New Rules of Real Estate For a Cooling Housing Market

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The New Rules of Real Estate
For a Cooling Housing Market

By Ruth Simon
From The Wall Street Journal 

As the spring selling season moves into high gear, the cooling housing market is upending the conventional wisdom that guided buyers and sellers during the housing boom.

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Cooling Real Estate Market Presents Challenge for Sellers

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Cooling real estate market presents challenge for sellers What choices are there for homes that aren't selling? Monday, March 20, 2006 By Dian Hymer Inman News

The housing market has changed. There are fewer multiple offers. Negotiation is back in vogue. Listings, in general, are taking longer to sell. And some listings are not selling at all. What are your options if your home is less desirable in the current marketplace than you'd hoped it would be? One option is reduce your price. Another is to hold out for a while, hoping that the market improves to meet your price. In most cases, however, the latter option is unlikely to yield results. The robust housing market of the last several years appears to be taking a break. No one knows how long it will be before we see double-digit price appreciation again. Many experts believe it will be years. A third option, if there's no urgency to sell, is to rent the property for a time and sell at a later date. This might be worth considering. However, as with any scheme, there are pros and cons that should be evaluated carefully before making a decision. On the positive side, a property that is, or will soon be, sitting empty will generate income. This income can help offset mortgage and property tax obligations and homeowner association dues for condo owners. Another plus is that you can buy time until the market improves. On the other side, consider that the market in most places is still good. 2006 isn't expected to be as strong a year for homes sales as was 2005, which was the best year ever. However, David Lereah, chief economist for the National Association of Realtors, predicts that the 2006 home sales volume will be the third best ever. A risk in renting now and selling in 2007 or later is that the home sale market might not be as good then as it is now. If interest rates rise considerably in the interim, it most certainly won't be better. A downturn in the general economy also wouldn't bode well for the housing market, particularly if accompanied by higher interest rates and oil prices. HOME SELLER TIP: An important factor to consider is the tax implications of renting rather than selling. If you have owned and occupied the property as your primary residence for two of the last five years, you are entitled to a capital gain tax exemption. For a single individual, $250,000 of capital gain is tax-free. The exemption is $500,000 for a married couple who files jointly. If you wait over three years to sell because of market conditions, you would lose this valuable exemption unless you move back in to the property, which might not be convenient or possible at that time. You could forgo the exemption and turn the property into a permanent rental for tax purposes. At some later date, you might do a 1031 exchange and trade this investment property for another, thereby deferring tax on the gain. However, deferring gain on an investment property may not be as advantageous as taking the tax-free gain you can realize when you sell a personal residence. Be sure to consult with a knowledgeable tax adviser about the consequences of turning your single-family residence into a temporary or permanent rental. Even if you do sell in time to preserve your capital gain tax exemption, you're likely to face additional expenses preparing your home for sale. Tenants usually don't care for a property as an owner would, so you should anticipate that repairs and renovations will be necessary. THE CLOSING: When you take into account the cost of future renovations and staging, and the uncertainty of a future market, you might be better off lowering your asking price and selling now.

A Former New York Bank Building Brands Itself as a Luxury Good

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A Former New York Bank Building
Brands Itself as a Luxury Good

By Brian M. Carney
From The Wall Street Journal Online

Real Estate Purchases Slide

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Real estate purchases slide Falling interest rates fail to inspire borrowers Wednesday, March 22, 2006 Inman News

Despite a drop in interest rates last week, overall mortgage applications fell 1.6 percent on a seasonally adjusted basis from the week before, the Mortgage Bankers Association reported today. The seasonally adjusted purchase index decreased by 2.3 percent to 393.6 from 403 the previous week, whereas the refinance index decreased by 0.6 percent to 1,574.5 from 1,583.6 one week earlier. The refinance share of mortgage activity increased to 38.1 percent of total applications from 37.7 percent the previous week. The adjustable-rate-mortgage share of activity decreased to 28.3 percent of total applications from 28.8 percent the previous week.  The average contract interest rate for 30-year fixed-rate mortgages decreased to 6.31 percent from 6.42 percent. Points including the origination fee decreased to 1.13 from 1.14 for 80 percent loan-to-value ratio loans.  The average contract interest rate for 15-year fixed-rate mortgages decreased to 5.99 percent from 6.06 percent. Points including the origination fee decreased to 1.09 from 1.19 for 80 percent loan-to-value ratio loans.  The average contract interest rate for one-year ARMs increased to 5.68 percent from 5.64 percent. Points including the origination fee decreased to 0.86 at 0.96 for 80 percent loan-to-value ratio loans.  Washington, D.C.-based Mortgage Bankers Association is a national association representing the real estate finance industry. The survey covers approximately 50 percent of all U.S. retail residential mortgage originations, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts.

California Rank Low as Homeowners

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Californians rank low as homeowners

Gregory J. Wilcox, Staff writer LA Daily News

Beset by high prices and and a tough regulatory climate, California continued to wallow at the bottom of the nation's homeownership ranks last year, according to a study released Wednesday. Last year 57 percent of the state's residents owned their own home, the second-lowest total in the nation and 13.3 percentage points under the national average, said the analysis by the California Building Industry Association. Only New York had a lower ownership rate, 54.8 percent. Boosting the ownership rate to close to the nation's would boost property tax revenue by more than $4 billion a year, money that could help the state pay for infrastructure improvements, officials said. Ownership rates in most of California have been flat since the beginning of the decade, said Alan Nevin, the association's chief economist. At 47.4 percent, the Los Angeles metro area has the lowest homeownership rate in the state, down 1.5 percentage points since 1994. The highest rate, 67.2 percent, is in the Inland Empire. California has not been on a par with the nation in regard to homeownership since the 1960s, Nevin's analysis showed. "Homeownership rates go hand in hand with the strength and prosperity of a community," Nevin said during a conference call. High prices are one barrier, especially for entry-level buyers. Supply is an issue, too. Builders would have to deliver about 240,000 housing units a year in California to meet demand but have been falling well short of that number for years, the association said. Lately about 200,000 units a year have come on the market, about 150,000 of them single-family homes. The 1960s was the last time builders met supply, Nevin said. "Our state is a leader in many ways but we are failing in one big way," said Robert Rivinius, the association's president and chief executive officer. The association said that during the 1970s, a series of state and local government regulations were adopted that erected difficult and costly barriers for builders to overcome. The association is now pushing a series of bills that would ensure that a sufficient supply of land is zoned to meet the housing needs of communities, support long-term bond financing of infrastructure repairs and overhaul some provisions of the California Environmental Quality Act. The CBIA study showed that in the past 10 years California's homeownership rate increased 1.6 percentage points while the nation's rose 5.2 percentage points. Jack Kyser, chief economist at the Los Angeles County Economic Development Corp., said homeownership is important to the community. Owning a home helps people bond with their community and they become concerned with such things as public services and schools. Ownership could also translate into more money for public agencies. "Meeting the demand for affordable housing would be very positive and it would have an economic impact, maybe different from what these people are saying, but a significant economic impact," Kyser said.

Standard and Poor's to Launch New Real-Estate Product

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Standard and Poor's to Launch New Real-Estate Product

By Karen Talley
From The Wall Street Journal Online

Investors who think the housing bubble is about to burst will soon be able to bet not only on when it will happen, but where.

Standard & Poor's, a unit of McGraw-Hill Cos., is rolling out 10 indexes that will track housing prices in various regions of the U.S., as well as a composite index. The indexes, which plan to launch in April, will serve as the basis for futures and options contracts that will trade on the Chicago Mercantile Exchange.

The contracts will allow investors to go long or short on a specific housing market -- that is, bet on it rising or falling in value.

Dubbed the S&P/Case-Shiller Metro Area Home Price Indices, the 10 cities comprise Boston, Chicago, Denver, Las Vegas, Los Angeles, Miami, New York, San Diego, San Francisco and Washington, D.C.

The composite index will be weighted, with New York, for instance, carrying more influence than Miami because the Big Apple has higher housing values and more homes.

"Obviously all this talk about housing bubbles is going to enhance interest in the product," says David Blitzer, chairman of Standard & Poor's Index Committee. But he adds the indexes are also meant to serve as a reliable source of information about what is many consumers' most valuable asset.

The indexes will use calculation techniques developed by economics professors Karl Case and Robert Shiller, such as repeat-sales calculations and a database comprised of home sales from a variety of sources, including lenders, multiple-listing services and public records. Data will be gathered continuously, and the indexes will be updated and published monthly, Standard & Poor's said.

Futures contracts obligate an investor to buy or sell an underlying asset on a certain expiration date at a fixed price, unless the investor makes an offsetting trade beforehand. Options grant the right, but not the obligation, to buy or sell an underlying asset at a fixed price anytime before expiration

Buying a Home Can Make You Rich Slowly

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Buying a home can make you rich slowly

By Kerry Hannon, Special for USA TODAY

To say that David Bach's latest book, The Automatic Millionaire Homeowner, eighth in his FinishRich Series, is a quick read is an understatement.

He means for it to be read in just an hour or two, so you can get cracking.

Yes, the ubiquitous best-selling author is back with his cheery, can-do message. This time he is talking directly to home buyers. Buying a home is the smartest investment you can make during your lifetime, according to Bach.

"According to the National Association of Realtors, the median home price in America hit $220,000 in August 2005 - a more than 55% increase in less than five years," he writes.

And while experts warn that the real estate market might be overheated, he dismisses naysayers. It doesn't matter if prices are up or down right now. Over time, they will likely go up steadily, he says.

U.S. real estate values have been going up steadily for nearly four decades - an average of 6.3% a year since 1968, according to the National Association of Realtors.

But let's be clear: There's nothing "automatic" about becoming a millionaire by purchasing a home. Bach does not fantasize about getting rich overnight in real estate. Neither should you.

This is about investing in real estate over the long haul. In Bach's scenario, you live in the house or rent it out for a period of time, possibly years. You're not buying a house just to flip it and make a quick buck.

"Being an Automatic Millionaire homeowner isn't about timing the market. It's about time in the market," he writes.

"It's when you're NOT trying to get rich quick that you get rich slowly."

Investing in real estate has been Bach's mantra. In Start Late, Finish Rich, he said one-third of your assets should be in real estate, one-third in stocks and one-third in bonds.

In his newest book, his formulaic, action-oriented approach cuts through the intimidating challenge of buying a house for the first-timer.

He covers all the bases, including the tax advantages of homeownership, ways to save for a down payment, figuring out what type of house to buy, finding a real estate agent and a mortgage broker, shopping for a mortgage, understanding and negotiating closing fees and costs.

For those who have gone through the Byzantine process of buying a home, much of Bach's guidance is old hat, but for a newcomer, it's fundamental reading, albeit generic.

You'll find sources for additional information on where to get your credit report, government lending programs, websites for mortgage shopping and sites that allow you to compare what properties are selling for in your local market, such as HomeSmartReports, which charges $25.

Bach is adamant about paying down the principal of your mortgage as quickly as possible. He advises making automatic payments, adding 10% to your regular mortgage check each month applied to principal, or making one extra payment at the end of the year, again applied to principal.

But his true love is the biweekly mortgage, when you pay off your mortgage years early and save tens of thousands of dollars in interest.

Here's what might be a little confusing for readers. In the beginning, Bach explains the Philosophy Behind the Automatic Millionaire Homeowner: You can't get rich renting; you don't need a lot of money for a down payment on a home; you don't need good credit to buy a home; you should buy a home even if you have credit card debt; you can build a fortune by buying just a few homes over the course of a lifetime.

That opening message might get potential homeowners hepped up about buying, even if they think they don't have a chance in the world of ever having enough for a down payment, or being able to qualify for a mortgage. He gleefully explains all the ways in which lenders are willing to lend money to risky borrowers these days and urges readers to take advantage of that opportunity.

But later, he seems to backpedal. He devotes a chapter to discussing the downside of real estate and the danger of downturns in the market for those who buy above their means.

To protect yourself from a real estate meltdown: "Make sure you can afford your mortgage," he writes.

Other tips to "bubble-proof" your real estate plan include locking into a fixed-rate mortgage for 30 or 15 years, tapping into home equity only for home improvements and other housing-related investments and not to pay down credit card bills, pay for a vacation or buy a new car.

"Be realistic about your situation," Bach advises. "Don't pretend you're in better shape than you really are. Don't borrow more than you can handle."

After all, if your financial situation takes a turn for the worse and/or your local real estate market takes a dive, you might not be able to afford your home if you put nothing down or took out an interest-only mortgage.

Developers Amass Condo Building Sites

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March 19, 2006

Developers amass condo building sites

By DONNA CALLEA
Business Writer

In October 2003, Lori and Dominic Capretta paid $75,000 for a small concrete block house in South Daytona, built in 1945.

Their neighborhood, consisting of seven houses on two streets off Ridgewood Avenue, adjacent to a trailer park, was not what anyone would call fancy or particularly desirable -- except for the fact the Halifax River flows behind most of the backyards.

So when a local developer named Gus Spreng, whom Lori Capretta describes as "a wonderful man," paid the couple $130,000 for their non-waterfront property on May 6, 2005, they considered it a good deal. They knew he was planning a riverfront condominium project, and needed their property, their neighbors' and the trailer park to do it. A single-story office building on Ridgewood also was part of the plan.

"I think he was very generous," said Capretta in an interview from Lake Jackson, Texas, where she, her electrician husband, and their children have since moved. And she didn't change her opinion upon learning that less than two weeks after Spreng bought her house, he sold the Capretta property for $1.19 million to Lady Godiva Investment Holdings LLC, a company in which he's a principal.

Spreng, who declined to comment for this story, also represented the neighborhood's property owners in his bid to get zoning changes approved by the South Daytona City Commission last year. In September he got the nod for a 6.2-acre project featuring an 18-story building with 372 units.

But it turns out that neither Spreng nor Lady Godiva Investment Holdings LLC -- whose other principals include New Smyrna Beach gastroenterologist Mark Nagrani (who couldn't be reached for comment) -- will be the developers of the as yet unnamed waterfront condominium. When a condo eventually rises on Ridgewood Avenue at Palmetto Avenue and Murray Way, where the former homes of the Caprettas and their neighbors are now vacant and boarded up, it will be under the direction of someone else.

Last month Spreng made his final purchases for the deal-- $2.5 million for the trailer park, and $910,000 for the last waterfront house in the neighborhood. And then he and Lady Godiva Investment Holdings LLC sold all 6.2 acres to a partnership called 3131 S. Ridgewood Avenue LLC for $24.5 million.

It's called flipping-- on a grand scale. And it's far from unusual these days as oceanfront and riverfront land become highly sought after commodities for condominium development.

"We like this part of Florida," said Nat Plotkin of 3131 S. Ridgewood Avenue LLC, in a recent interview from Connecticut. Plotkin is actually a principal of a real estate development company called Terra Mark that is partnering with UrbanAmerica, a New York-based minority controlled investment firm, to build the South Daytona condo on the property Spreng acquired.

"We think this is a very fair price," said Plotkin, noting the cost to build on the water in other places is much higher.

Another recent flip involved a turnover of three developers in less than two years.

The proposed Bellagio condo at 1751 S. Atlantic Ave. in Daytona Beach started as the brainchild of Maitland developer Bob Thollander and his partner James Humphrey in Columbia, Md., who have a number of projects in the works in Volusia County.

In 2004, Hollander began acquiring mom-and-pop type motel properties on the beach.

The key was to get four together for each condo that Thollander planned, said Richard Stanley Cagan of Ormond Beach, who brokered the deals.

By February 2005, Thollander had what he needed and was shepherding both the Bellagio -- planned as a 19-story luxury building with 128 units -- and a nearby project dubbed the Milan, through city hall hurdles. It was estimated at the time that construction on the Bellagio might begin as early as July 2005. Instead, the unbuilt Bellagio was sold to Ambling Development of Valdosta, Ga., last May for $12.4 million, and the Milan project to Milan Developers of Tallahassee for $13.6 million.

"We buy the property with the intention of building to completion," said Thollander, who does not like to be called a flipper. "But when someone is willing to pay a lot more, we'll entertain an offer," he acknowledged.

It turned out that the Bellagio's new owner also was willing to entertain offers.

Last month, the Ambling Group, through its affiliate Valencia Daytona LLC, sold the Bellagio property to WCI Communities in Bonita Springs for a whopping $23 million.

Developers are "flipping things all over the place," said longtime area condominium developer Jim Mack of Volusia Properties, who recently flipped his company's Key Largo project in Daytona Beach Shores.

But he's not a big fan of the process, which he said his company rarely does, and he has "mixed emotions" about selling the project he worked on for three years to another developer.

"I would still prefer to develop it," he said. "But our partnership is only in business to make money."

Mack's company paid $6.3 million for the oceanfront property at 3167 S. Atlantic Ave., where a luxury 11-story condo is expected to sprout. In a deal that's set to close in May, JMC Communities, a St. Petersburg developer, has agreed to pay about $11 million for the Key Largo land, Mack said.

It's a given that when developers pay big bucks for land, the resulting condo units have to be priced in sky-high ranges that make their investments profitable.

But "the market is very soft at the moment," said Mack. "There are not a lot of phone calls, and sales are slow. . . If you look at the inventory that's left, they're all in the million or up range."

Compared to other coastal areas, "we are a bargain" for developers, Mack acknowledged. "But you still have to have a buyer (for each unit) and it's still a limited market."

How long big-time flipping can go on, and how many luxury condominium units the area can support is anyone's guess.

But there's no doubt lots of money is being made by savvy flippers.

Lori Capretta said she and her husband came out ahead, too. And she has no problem with the fact that Gus Spreng and his investors made millions flipping land in their old South Daytona neighborhood.

"He paid top dollar," she said. "If he can sell for top dollar, that's the freedom of America."

Ground Rules fo Home-Buying Success

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Condo Owners Confused over lack of IRS Guidelines on Hurricane Losses

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Condo owners confused over lack of IRS guidelines on hurricane losses

By Harriet Johnson Brackey
South Florida Sun-Sentinel

March 25, 2006

A tax break that was supposed to help hurricane victims has left South Florida's condominium owners wondering what to do.

Their question is: Can I deduct my association's assessment for repairs because of Hurricane Wilma's damage?

Some accountants are saying yes. But the IRS offers no specific guidance on condo assessments in its rules, regulations or publications about casualty losses.

That leaves South Florida's many condo owners with a dicey choice -- take the deduction and hope it's accepted or miss out on a possibly significant tax break.

The way many condo owners see it, "they own every square inch of the swimming pool or that tree," said Myrna Yudenfreund, who is a certified public accountant and whose husband David is a CPA as well. Condo owners who ask the Boca Raton couple to prepare their taxes want to deduct losses just like single-family homeowners. "But there isn't one word [in the tax law for hurricane victims] about condo assessments," she said.

"One accountant told me to take it as a line item on my personal tax return," said Jules Levine, a condo owner from Miami-Dade. "Then we'll see what happens. The IRS could deny the deduction." (If that happened, a taxpayer would owe additional tax plus interest and possibly a penalty.)

Normally, casualty losses would not spark a widespread debate. That's because they depend upon individual circumstances. And, a taxpayer usually has to have a substantial loss before taking a deduction.

By law, a casualty loss has to equal at least 10 percent of the taxpayer's adjusted gross income plus $100 to qualify for a deduction. The taxpayer then subtracts any insurance reimbursement and the result may be an itemized deduction.

But during the current tax season, even small amounts might be deductible. That's because Congress passed a law in late 2005 that said victims of Hurricanes Katrina, Wilma and Rita don't have to meet that 10 percent limit for hurricane damages. They might be able to deduct every penny of their loss after insurance is subtracted. And damages in South Florida due to Hurricane Wilma were widespread. Local accountants are saying plenty of homeowners are claiming losses.

The sticky question for condo owners is whether their special assessments, usually for repairs to the common areas of their buildings and grounds, fit the definition of a casualty loss. The same question faces taxpayers who paid damage assessments for single-family homeowner associations.

The tax law appears to make no mention of it.

There also is no regulation, publication or ruling that discusses condo assessments, says IRS South Florida spokesman Michael Dobzinski.

Dobzinski initially responded in a recent South Florida Sun-Sentinel online tax discussion to questions on this issue by saying that the definition of a casualty loss is for "personal-use" property. Nor are condo assessments a tax, which might qualify for an itemized deduction.

But anyone who wants to ask for a private letter ruling to clarify the issue could write to the IRS and cite "his particular facts and circumstances and the condo documents that pertain to the individual situation," Dobzinski said.

However, that process would likely not produce an answer before federal individual income taxes are due April 17. And the IRS charges big fees to issue letter rulings.

The fee schedule starts at $625 for an individual taxpayer whose income is less than $250,000 and goes up from there.

Attorney Gary Poliakoff, managing shareholder of Becker & Poliakoff, a Fort Lauderdale law firm that represents many local condominium associations, says historically, assessments for maintenance and special assessments have not been tax deductible. He doesn't think hurricane loss assessments are either.

"I think it would take a specific act of Congress to permit this because they don't stop to contemplate items such as this in a multifamily and common ownership setting," Poliakoff said.

On the other side of the debate are Monte Kane, head of Kane & Co., a Miami and Boca Raton CPA firm that often advises condominium associations, and Scott Berger, a tax principal at the South Florida accounting firm Kaufman Rossin & Co. Kane says owners should deduct the assessment as a casualty loss for damage that wasn't covered by insurance.

Berger says you could use the assessment as a way to estimate a decline in the fair market value of your unit. He'd also suggest doing the same with homeowner association damage assessments.

Greg Rosica, a tax partner at Ernst & Young in its Tampa office, says the decline in value is where condo owners should focus their deduction.

As an example, he said if your $500,000 unit pre-Wilma today would sell for $300,000, then you had a $200,000 decline. "It's not necessarily tied to the assessment amount," he said.

Other accountants have suggested that the condo owner get an appraisal to prove that their unit's value has declined due to the hurricane.

And still others are holding back, waiting for official guidance.

"There are accountants who are very aggressive. There are others who are conservative like we are who want to see in the law where it says, `I can deduct that.' I want to see it in writing," David Yudenfreund said. "But we can't get an answer."

Writer Says Home Market Normalizing

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Mar. 26, 2006
Writer says home market normalizing BY DONNA GEHRKE-WHITE dgehrke@MiamiHerald.com Good news for home buyers: You can take your time buying a home now that the bidding frenzy -- and yearly double-digit jumps in prices -- are over. That would allow you to make the right decision without feeling pressured into buying a potential mistake. So says Elizabeth Razzi, a national real estate writer who just wrote The Fearless Home Buyer: Razzi's Rules for Staying in Control of the Deal ($16.95, Stewart, Tabori & Chang). She'll be giving more tips at 8 p.m. Tuesday at Books & Books in Coral Gables as she tries to help buyers through the often confusing process of buying a home. She knows how first-time buyers especially can feel pressured and afraid of picking the wrong property. ''The last couple of years really have been insane'' with some homes selling within hours of being listed, says Razzi, who has written for Kiplinger's Personal Finance magazine. ``There was a lot of panic-buying with prices soaring. Thank goodness it is slowing down.'' Now buyers have the time to reflect on what they really want and can afford. After all, Razzi says, people don't want to end up with a condo or house they detest -- or for which they paid too much. Indeed, home price increases in South Florida should be slowing to a yearly 4 to 10 percent instead the double-digit jump of the last few years, says Ronald Shuffield, president of the Coral Gables-based Esslinger Wooten Maxwell. Buyers are likely to find more bargains in condos since there are more on the market, he says. Both developers and owners of existing condos may be willing to pay closing costs or give more incentives, including cutting the asking price. Single-family homes, though, are still in demand. ''You just have no land left,'' Shuffield says. Still, there are more than double the number of single-family homes on the market in South Florida than there were last year, according to EWM statistics. That gives buyers more choice as well as more of a chance to negotiate a lower price. DO HOMEWORK Razzi recommends that buyers research the neighborhoods they are interested in: Is there some softening? Can prices be bargained down? People also realize they will have to compromise in a popular metropolitan area like South Florida. She warns that buyers have to settle for two of three ''wants'': a low price, a big ''wonderful'' house or a short commute. ''Remember, it's two of the three, and only two,'' she adds in her book. Buyers should take a hard look at their finances and know how much they can afford before they make an offer, she says. Most lenders, she adds, don't want to see your home costs, including mortgage payment, taxes, insurance and any homeowners or condo fees, extend beyond 28 percent of your gross income. However, EWM agent Donna Gaines says many buyers in South Florida, especially first-timers, are having to stretch that to as much as half of their income going for their homes. You can lower your financial risk by buying in a well-regarded neighborhood, author Razzi says. The home should also be big enough for you to live there for at least five years. Don't buy, for example, a one-bedroom condo if you plan to have children in the next couple of years. Instead, save more and buy a larger condo, town home or even a small house with a yard big enough to enlarge the house later when you are earning more money. She recommends condos or town homes for first-time buyers as an affordable option. Town homes may be a better buy than a single-family home because a buyer will get more living space and less yard maintenance. But before buying any home, check to see if you will be in a community association. If so, the association should be well run and responsive to owners. It should have reserves to cover emergencies. You also want to live in an association that fits your philosophy. You don't want to move into a community that strictly enforces rules when you are more of a free spirit, Razzi adds. Buyers also need to investigate whether they will like living in a neighborhood. Walk around at night. ''Do not buy in a neighborhood where you do not feel safe,'' she advises. CHECK THE COMMUTE Also, get up early and find out what the commute is like from your potential home to work. Don't trust the weekend flow. That will invariably be lighter, she says. ''I'm convinced there are only two things honest people routinely lie about: their weight and their commute,'' she adds. Even if you don't have kids, check on the schools. Good schools still influence home value and can be an important selling point, she says. Concludes Razzi: ``Buy a good home in a great neighborhood, without overpaying for the privilege, and you will lower your risk (of making a bad investment).''

Condo Market Heats Up in CBD

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Condo market heats up in CBD

Published on March 23, 2006

Huge investments to launch new condominium projects in Bangkok's central business district (CBD), near the Skytrain and subway, between now and 2009 will result in some stiff competition, says Jones Lang LaSalle Research. Most developers will avoid direct price discounts for their clients.

The research group also predicted that price levels of condominiums inside the competitive zone would change dramatically, despite the possibility of the resale market attracting some of the demand and diverting it from the first-hand market.

Meanwhile, completion of the BTS and MRTA lines has created a development opportunity for condominium projects away from central Bangkok. The eventual extension of their routes will widen potential areas for growth and result in a slowdown in both supply and demand in central Bangkok in the medium to long term.

The research shows that a total of 12,160 units are due for completion by 2009. Assuming no construction delays, this year alone will see 6,350 new units, representing the largest number completed in a single year since 1981. The remaining 5,810 units are scheduled for completion starting next year: 3,675 units in 18 projects in 2007, 1,740 units in two projects in 2008 and 397 units in one project in 2009.

Last year, sales of new condominium units reached 5,510 units, a slight decrease from the 5,740 units sold in 2004. The average asking price rose from Bt65,800 per square metre in January 2005 to Bt72,100 in January of this year.

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'Official hotel' status more than just hyperbole

Convention center designation includes guaranteed rooms in exchange for maximizing its size.

Orlando Business Journal - March 24, 2006

by Bob Mervine

Staff Writer

ORLANDO -- Being labeled an official convention center hotel is more than a puffy advertising line for Palazzo del Lago, the area's most recently announced mega resort that will include a spa and five themed restaurants.

The designation is part of a deal in which the resort gives a guaranteed block of hotel rooms for conventions booked three to five years in advance, in exchange for avoiding an expensive impact study that could limit its size.

Phase one of the $800 million Palazzo del Lago is set to open in early 2009 on South International Drive, about four miles from the convention center. The project will include 585 condo-hotel units, 675 conventional hotel rooms and 994 condo villas. The condo units will go on sale this summer with hotel units starting at $400,000 and villas at $300,000.

Having the official convention center hotel designation on the project's letterhead helps assure potential condo buyers at the resort that their units will stay filled, says Jerrold Krystoff, CEO of Hospitality Development Group Inc., the Fort Lauderdale developer of Palazzo del Lago. He says much as 70 percent of the Palazzo's overnight rental business could be with groups.

Group travel can mean tour groups, but in this case it refers to meeting and convention business, especially for hotels located near the county's convention center.

The official designation, which calls Palazzo a "Convention Center Hotel Development," is the linchpin of a 2001 contract between Orange County and the hotel's developers.

According to the deal, official convention center hotels agree to guarantee up to 50 percent of their available rooms for a citywide convention center group five years before a group comes to town. Booking a group five years in advance gives the convention center assurances that half of the hotel's available rooms on those dates will be blocked at a fair rate. In the event of a four-year booking, the guarantee drops to 40 percent of the available rooms; three years drops to 30 percent. Inside of three years, no guarantee is necessary.

In exchange, the county allows the developer to build the number of rooms allowed under the International Drive Activity Center Mixed-Use zoning district agreement, based on the theory that high-end hotel rooms servicing the convention center are good business for all involved. Otherwise, an expensive development of regional impact study by the hotel would be required.

The concept was developed in the mid-1990s, says Tom Ackert, the executive director of the convention center, the second largest in the country. He sees the agreement as a sales tool. "It increases the armament for our sales department," he says. "At the end of the day, it's not likely to influence the final decision" by a meeting planner on whether to book a convention in Orlando or elsewhere.

None of the hotels located near the center have chosen to become official convention center hotels, and so far only two developments have qualified for this status.

Alan Villaverde, Peabody Orlando's general manager, says there's no advantage to his hotel in a deal like this, but for a large property miles away from the convention center, "it's impossible to say whether it will bring the benefits they expect."

"We've never gone out to solicit this," says Dan Heffler, director of sales and marketing for the Orange County Convention Center. "The developers who were interested came to us."

Buena Vista Towers, the other property that has asked to be an official hotel, is located in the Marbella Resort project. The Buena Vista Towers is a two-building, 25-story condo hotel project, but the number of rooms has yet to be determined, says Buena Vista Corp. President Shamamand Maharaj. However, he thinks the official convention center hotel status is a good idea.

That's because it facilitates better occupancy and average daily rates, and increases the hotel's entitlements with the county, he says. Maharaj adds, "It allows us to have a closer relationship with the convention center."

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Costs drive biz condo demand

By ROALD HAASE
rhaase@kcchronicle.com

GENEVA - Nick Pantazopoulos thinks he may know why people are buying business condominiums.

It's not necessarily because of the costs of the individual condo units, when compared to constructing standalone business buildings. It's something else, he believes.

It's the cost of land that's driving the biz condo demand, Pantazopoulos suggested. For Pantazopoulos, it's a key reason he's building his own business condo development, for which he broke ground two weeks ago in Geneva.

"They're great value for the money because the land cost has gotten too expensive," said the Bartlett developer.

Too expensive, he added, for the owner of a small business to invest in land on which to build only a 2,000- to 4,000-square-foot building. It's getting too costly to lease space, too, in his opinion.

"When you are looking at rental costs of $17 to $27 a square foot, you can own your own building [unit] for less than renting, and then five to 10 years down the road you have something you can sell," he said.

Together with Rick McGee of Byron, he has begun building two buildings, each containing about 20,000 square feet, along Kirk Road in the Geneva Business Park.

The structures, to be subdivided into six units each, are expected to be completed in the summer.

Business condominiums follow much the same pattern as residential condos: unit owners defray such common costs as snow removal and lawn care through monthly assessments, while each maintains the interior of his own unit.

Usually, each unit consists of a front door that leads to offices, with the back end of the units devoted to storage and-or light manufacturing operations.

But it's not just in Geneva and elsewhere in the Tri-Cities where condominiums are sprouting, to hear Pantazopoulos and McGee.

"They actually are very big in the Chicagoland area right now," Pantazapoulos said.

Another theory was espoused by Chris Aiston, economic development director for Geneva. Aiston noted that two separate condo developments are in the offing for Geneva Business Park, including the Pantazopoulos-McGee project.

"People want to own [their space], but they don't want to build their own building," Aiston said. "They'd rather be part of an existing project. ... [and] they don't want to rent, either."

Aiston said another major business condominium park will be in Geneva Business Park, south of Peacock Engineering Co. There, developers have proposed four buildings, totaling about 144,000 square feet, Aiston said. Developers Chuck Lucchese and Leo Lenahan are awaiting final city approval of their plan, Aiston said.

The same firm recently completed a similar project on St. Charles' east side, he said.

One area real estate specialist, Jim Hopkins of St. Charles, has made business condos the central focus of his business, Glen Ellyn-based Real Estate Consultants Inc. Currently, the firm represents developers that have about two million square feet of business condominiums on the market or in the process of being built, Hopkins said.

And now, Hopkins said, the business condominium phenomenon includes stores, too.

"We are doing retail and have done retail, already," Hopkins said. "It's very, very important and emerging."

Among his retail projects have been Campton Square, on the east side of New LaFox Road at Route 64, near Wasco. There, many business owners also own their own stores or service businesses, he said.

"The reason [retail] is going to become an extremely successful sector is that retailers, more than industrial or offices, make an extremely high investment in their location," Hopkins said. "Who is more interested in [where they are located] than a person spending tens of thousands of dollars to advertise their presence at that location."

One of his newest retail projects using the condo approach is at Randall and Bowes roads in Elgin, which when completed will consist of both stores and offices.

One of Hopkins' satisfied condo unit buyers is Marcia Dingman, who with her husband Mike owns MED Surgical Imaging Inc. at the new Courtyards of St. Charles on Dunham Road, north of Main Street. The couple formerly leased elsewhere in St. Charles, but decided they wanted to build up equity in something they could own.

"We did a little research," Marcia Dingman said. "It seems to be more of a thing we saw in other parts of the country, but a number of developers seemed to be going in that direction [here]."

Their 1,400-square-foot space includes three private offices, a conference room, storage room and a reception area. It even includes a coffee bar.

The first owners in their building, the Dingmans have operated there now for about two months.

"Again, we saw it as an investment, hopefully it will be a good investment," Dingman said.

And for developers, business condominiums often represent a quicker return on investment, to hear Hopkins. It can take longer sometimes to lease out a new building than to sell individual units of such buildings, Hopkins said.

In fact, his firm has been retained by Hamilton Partners to convert an office building in Itasca from a leasing situation to condominiums, Hopkins said. Turning the units into individually owned condos should double the value of the building, Hopkins predicted.

Hopkins has seen his 30-year-old business grow in the past five years from only a handful of employees to the present 17 associates. By June, the firm may have 20 associates, as it moves to much larger quarters in Itasca.

And where is it moving? You guessed it - into a business condominium created by Hopkins' own company.

Condo Owners Speak Out at Info Workshop

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Posted on Sun, Mar. 26, 2006
MIAMI BEACH Condo owners speak out at info workshop Hundreds of Miami Beach condominium owners packed City Hall last week for a workshop on condo owner rights and responsibilities. BY SUSAN ANASAGASTI sanasagasti@MiamiHerald.com They came with complaints and frustrations. But mostly, they wanted answers. Dozens of condominium homeowners -- most from Miami Beach, some from elsewhere in the county, -- packed City Hall on Tuesday night to learn more about condo living. Virgil Rizzo, the state ombudsman, was the scheduled guest speaker. But he recently underwent back surgery and could not attend. The state's assistant condo ombudsman, Bill Raphan, answered questions instead. It was a standing-room-only crowd for most of the night. That kind of turnout is no surprise in Miami Beach, where about 58 percent of its housing stock is listed as condominiums. Raphan said his office -- which reports to the governor and is based out of Fort Lauderdale -- receives about 700 complaints a week. ''They keep coming in and coming in,'' he said. ``But believe it or not, we answer everything within 24 hours.'' For more than two hours Raphan listened to condo owners gripe about special assessments and flawed condo laws. Some wanted to know who is responsible for replacing condo-unit windows and sliding glass doors after a hurricane. Every case is different, Raphan explained. But he pointed to a recent state law that requires condominium associations to have insurance to cover such damage. Antonio Lopez of Southwest Miami-Dade sought direction on how to recall a condo's board of directors. Raphan's response:``The state cannot walk into your condominium and kick the board out because you don't like them.'' Raphan did say, however, that directors could be removed by voting replacements in. But he also admitted that ``elections are a big problem.'' Rizzo and Raphan are currently pushing to change some of Florida's condominium laws. One example: They're trying to get legislators to create a law that would limit the number of years a board member may be elected to serve as president of the association. ''It bothers me when the president of the board has been there for 18 years,'' Raphan said. During the meeting, Raphan also talked about some of his office's various duties. Ombudsman staff act as a neutral resource regarding the rights and responsibilities of unit owners, associations and board members. Last year, the state condo ombudsman monitored about 50 elections, up 10 from 2004. ''When we monitor an election, sometimes 80 or 90 percent of the people vote,'' he said.

Stocks or Real Estate? Why not both?

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In a recent article, Matt Krantz of USA Today addresses the ongoing battle between Stocks and Real Estate.

According to Krantz, the housing boom has been so strong lately that in some places less than 10% of residents can afford to buy a home. It hasn't been unusual in some cities for home prices to soar 15% or more a year for several years.

To accurately portray which has performed better (real estate or the stock market) over the past 10 years, Krantz compares the IFA Total U.S. Market Index, which measures the value of the stock market, to the IFA Real Estate Securities Index between January 1, 1996 and Jan 32, 2006. This analysis shows us real estate investments, in this case real estate investment trusts, have blown away stocks the past decade, estimating that the IFA Real Estate Securities index has gained 15.76% on average per year (a total gain of 338%!) according to IFA.com. That beats out the 8.93% annualized and 132% overall total return of the IFA Total U.S. Market Index (according to IFA.com) Furthermore, the Real Estate Market has been less risky.

However, another source of analysis provides a different story. In examining the median price of existing single-family homes, using data from the National Association of Realtors, we know that last year, the median price was $208,700, an increase of 12.7% from the previous year. We also know that the median price of homes at the end of 1995 was $110,500, which works out to a compound average annual rate of growth of 6.5% each year. Using this data, the annualized return of the IFA Total U.S. Market Index for Stocks beats out the returns on Real Estate.

Home appreciation doesn't always beat stocks. In fact, you'll find stocks tend to outperform home price appreciation most of the time. Furthermore, according to Krantz, you are better off owning a basket of many real estate assets, such as real a real estate mutual fund, than property in an area that might not appreciate.

Despite everything we've covered, real estate can be a valuable addition to many investors' portfolios. Real estate stocks often zig when other stocks zag, Krantz adds. The correlation between real estate stocks and stocks in general is generally low, and your best bet is to find the right middle ground in investing within both arenas.

Looking For a Home? Start at Your Computer!

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Allison Linn, AP Business Writer for Sun-Sentinel.com, discusses the perks of online innovations in her recent article entitled, "Looking For a Home? Start at your Computer!"

Years ago, Molly Bolanos looked for a home the old fasioned way: She spent hours driving around in her real estate agent's car, hoping for the best and girding for the worst. One recent morning, however, the process went like this: Bolanos and her fiance were alterted to a new listing online. They checked out the pictures on the Internet, then drove over for a real-life look and, within hours, were preparing to make an offer.

"It can be 24 hours--as quick as 24 hours that you're out making the offer--and it's because of the Internet," the Seattle resident said.

Add real estate to the list of industries being forever changed by the Internet. Home listings--once printed out in books available only to real estate agents--are obtainable to everyone online, accompanied by increasingly sophisticated photographs and virtual tours. Now, a growing number of online services are also cropping up to help people do things like judge house prices, survey neighborhoods, and evaluate school districts, long before they ever snap the seat belt in their agents' cars.

With the nation's housing booom expected to cool in some areas, experts say such offerings will only increase. And ultimately, the fact that consumers on their own have more power than ever to do some of the work of real estate agents could even help further drive down agents' commissions. Many also expect online tools for house-hunters to become more creative and sophisticated. The full impact of the Internet has not yet been realized.

Besides viewing listings online, Bolanos now regularly visits Zillow.com, a new Web site that provides quick, anonymous estimates of home values based on county records and other data. Although the site, which is in test form, isn't always completely accurate, Bolanos said it gives her a good barometer for judging a home's worth. Less than a month old, the advertising-supported site already has become fodder for office gossip and dinner party chatter, in part because it gives people a voyeuristic look at what their friends and neighbors might be able to get for their home.

Other sites, such as HomePages.com, use interactive maps and other tools to provide information about neighborhoods, schools, local parks and even nightclubs surrounding a particular home.

Still, no matter how sophisticated online house-hunting becomes, the computer will never be able to fully replace the experience of live walk throughs with an agent or owner. Although virtual house-hunting offers increasingly sophisticated virtual technology, it is still extremely rare for someone to purchase a house without ever visiting it.

Automation Showing Up In More Mid-Priced Homes in South Florida

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In a recent article Robyn A. Friedman of the Sun-Sentinel discussed an increase in moderately priced homes with automation. Home automation, also known as making a "smart home" is the process of firstly providing remote on/off facilities for appropriate devices (lamps, coffee makers, computers, computers, Air Conditioning, Televisions, etc.)

Technology that used to be available only to luxury condominium owners in South Florida is now increasinglly showing up in midpriced condos and single-family homes here.

Home automation has comea long way from the X-10 modules (sold in electronics stores) previously used. Today's sophisticated condo buyers now expect a high level of home automation and building integration when they purchase their luxury homes. Some of these systems cost more than $1 million.

According to George Fallica, co-owner of Climax USA LLC, a North Miami Beach-based provider of home automation and building integration technology, "Developers used to try to differentiate themselves by using Snaidero kitchens or granite countertops, but it has all been done before. Now they try to leapfrog each other with building integration."

Building integration is technology that allows condo owners to communicate with the amenities of a building--concierge, pool or security services, for example--by using an interactive touch screen. Home automation, on the other hand, allos condo owners to control virtually all the systems in their individual condos, from lighting to temperature to raising and lowering blinds. These high-tech systems are apt to raise home and condo sales and aid developers in achieving higher sales prices per square foot.

Skyline Equity Realty, the developer of Skyline at Mary Brickell Village in Miami, even markets its condos as "Apartments of the Future." Each of the 369 condos come equipped with a home automation panel that controls lighting, security, the sound system, satellite or cable television and high-speed Internet service. With a few presses on a touch screen, residents can even make a dinner reservation or order groceries from a nearby supermarket--all without leaving their home.

MDM Development Group's Met 3 in Miami will offer residents a HomeLink wireless security panel to control their condos features, including lighting, thermostat and blinds via the Internet so that its residents can monitor their homes even while traveling.

The Aventura-based Trump Group is spending $30,000 per condo at Luxuria, its 24-unit ultra luxury condominium project on the beach in Boca Raton, to make each one "smart." Each residence will come with a Crestron control device that has the capability of communicating with up to 60,000 devices simultaneously. The basic building integration system, made by Vertical Integration Group, will include an automation panel that allows it to browse the Web. That device also allows owners to open blinds, turn on lights, start the fireplace, control the air conditioning, turn on the hot tub or ask the valet to bring up their car.

Owners at Luxuria can choose home automation upgrade packages from $85,000 to $1 million. What does a $1 million home automation system do? Climax's Fallica said he recently installed one at Trump Palace in Sunny Isles Beach. It includes: mutlizone audio and video systems with hard disk servers that store more than 1,000 movies and 10,000 CDs; multiple plasma televisions throughout the unit; multiple tocuh panels; $160,000 worth of speakers; a $50,000 projection screen; and a complete home theater with stage, seats, and popcorn machine. Ain't life grand?

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Las Vegas Condo Market Discussed

15 March 2006

by Hubble Smith

Las Vegas Gaming Wire

LAS VEGAS -- Nobody really knows the depth of the high-rise condominium market in Las Vegas, though nearly 1,000 have been built and sold and another 5,800 are under construction, a local economist said Tuesday.

John Restrepo, principal of Restrepo Consulting Group, predicted that 10,000 to 14,000 new units will come onto the market over the next five years, a mixture of straight condos and condo-hotels.

"It's a variety of things that come into play to see how deep we are," he said at a Nevada Contractors Association luncheon. "At one point we had 60,000 units planned. We were never as deep as we thought."

Restrepo counted 75 planned projects at 10 stories or higher with 41,000 condo units and 21 condo-hotel projects with 12,400 units. Of those, 15 condos and six condo-hotels have graded their site and put up a construction fence with a sign that "the most unique high-rise in the universe is coming any day now," he said.

Nine condo projects and three condo-hotels are "real," meaning you can see the steel going up, including One Queensridge Place at Alta Drive and Rampart Boulevard.

"We had a captive audience," said Bob Wallace, vice president of construction for Executive Home Builders, developer of the $250 million Queensridge project with Peccole Nevada Corp. "We marketed to people who live in the area -- and it's a high-end area -- some of the folks whose kids have left and they don't need a big house anymore."

Several high-rise projects have been derailed in Las Vegas for a number of reasons, including lack of financing, rising construction costs, a shortage of qualified general contractors and overaggressive marketing teams that sold units before locking in costs.

Restrepo said six projects -- Liberty, Ivana, Icon, Krystal Sands, Hard Rock and Aqua Blue -- are "dead or wounded," canceled or put on hold for whatever reason. Three "John Does" are also on the R.I.P. list, he said.

Kenneth Haeger of Summit Consulting International said contractors must follow a critical path method for scheduling construction of high-rise projects, where a planned sequence of activities depends on various steps preceding each other.

"It's pretty simplistic," he said. "One activity has to be finished before I can start the next activity. We've got to have the rebar in before we can pour the concrete."

Inevitably, as a project proceeds, things happen that delay the schedule, Haeger said.

"Change orders, late deliveries. We had a water plant where the pumps were delivered late and they sued us for liquidation damages. A status check showed the foundation for the pumps was not ready for delivery, so the pumps did not impact the delay," Haeger said.

Research shows that 80 percent to 90 percent of condo buyers in the Strip corridor are speculators, investors and second-home buyers, Restrepo said. That's different from downtown, where the blend is probably 50-50 between local residents and second-home owners, he said.

"Very few people want to live on the Strip full time," he said. "Look at Turnberry Place and Park Towers. They're always dark."

That's why condo-hotel projects such as The Residences at MGM Grand, Platinum and several projects planned along the Harmon Avenue corridor have a good chance at succeeding.

"We do know there's a huge amount of interest in Las Vegas and people want to live here," Restrepo said. "People want to live near the ocean or water some people say the Strip is our ocean. I don't know about that."

Best And Worst Neighborhoods To Buy A Home

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Best And Worst Neighborhoods To Buy A Home
Sara Clemence, 03.10.06, 12:30 AM ET

The south Los Angeles neighborhood of Watts has been notorious for many things, among them race riots, poverty and gang warfare.

Now it can be known as a great real estate investment.

Over the past few years, rising property prices have rocked the state of California with an earthquake-like vengeance. Luxury subdivisions have filled hillsides, bidding wars have pumped up home sales, and teardowns have sold for more than $1 million. Los Angeles saw home prices increase about 50% from 2003 to 2005, according to the National Association of Realtors, a trade group based in Washington, D.C. The median sales price for an existing home in L.A. stood at $529,000 at the end of last year.

One might think that the bulk of that appreciation came in wealthy and well-known enclaves like Beverly Hills or Bel-Air. But according to a Forbes.com ZIP code analysis, within the Watts ZIP of 90059, home prices rose 91.9%; more than any other ZIP in Los Angeles. Meanwhile, had you sunk your funds into the upscale neighborhood of Holmby Hills, you would have the least amount of appreciation in the city--under 9% from 2003 through 2005.

It is a pattern that held true in several of the largest cities in the U.S. over the past two years. Long-coveted areas, such as Pacific Heights in San Francisco, Buckhead in Atlanta or the Upper East Side in New York, were not the best performers. Instead, in many metros, neighborhoods with lower median incomes, neglected housing stock and low prices, or areas that were dominated by office or industrial space, have surged forward.

For investment performance, think Miami's Little Havana, where prices increased more than 150% over the last two years. Or the tough Northern Liberties section of Philadelphia, which went up 70%. Or Manhattan's Lower East Side, where tenements that once sheltered struggling immigrants are now occupied by high-priced lawyers, and the median home price is more than $650,000, according to real estate appraisal and consulting firm Miller Samuel.

"In the past, you would expect that neighborhoods with higher median incomes would have stronger demand for homes," says David Lereah, senior vice president and chief economist for the NAR. "Lower-income neighborhoods will have more renters. Higher-income areas will have more demand from people wanting to climb the ladder. It means that some things have changed."

As prices have increased, some of the most desirable neighborhoods--which have always been more expensive--have topped out, becoming unaffordable for many home buyers. So instead of buying charming but overpriced stone homes in the leafy Baltimore neighborhood of Guilford, for example, young families turned to blue-collar areas near the water, rehabbing old row houses that seemed cheap in comparison.

Jonas Lee, a founder and managing partner of Redbrick Partners in Manhattan, a private investment fund that puts money into single-family homes, is not surprised. His company targets just such urban areas for investment.

"It takes people a while to figure it out, but there's a very large arbitrage between these neighborhoods and some of the nicer neighborhoods," Lee says. "Once that price differential is large enough, people start to recognize the opportunities, and then there's a sort of a herd mentality. It's leading to the revitalization of neighborhoods that had not seen a lot of investment for a long period off time."

This shifting of money isn't limited to individual neighborhoods--it mirrors a national trend.

"I call it the 'rolling boom,' " Lereah says. "Vegas to Reno was the first thing we saw."

In 2004, the median home price for Las Vegas went up a startling 52%, he says. But by 2005, it had dropped to 12%.

"What happened was, Reno went up 32%," he says. "Then it appeared the boom rolled to Phoenix. You saw similar things in Boston; first Boston got the boom, then it rolled to Providence, R.I., and the air came out of the balloon in Boston."

Not every city we looked at fit the rolling-boom pattern, however. Metro areas such as Dallas and Minneapolis-St. Paul have not seen tremendous real estate price gains in recent years. In Dallas, where the median existing home price went up 6% last year, according to NAR, the greatest appreciation is still coming in more established, pricier neighborhoods. Same goes for Minneapolis-St. Paul, where prices overall rose 4.5% in 2005. Prices are difficult to pin down in Phoenix, which has seen tremendous growth; a new community can spring up in a year, utterly and suddenly altering the prices in a neighborhood.

To get a snapshot of how prices have been moving, we turned to Brooklyn-based real estate data firm OnBoard for numbers on all cities, except for parts of New York. For 20 of the largest metropolitan areas in the country, OnBoard gathered the median home prices from 2003 to 2005 for all the ZIP codes the U.S. Postal Service associates with each city. We tossed out ZIP codes that had fewer than 30 sales in any year during that period because they would not reliably show trends. We then searched for the best performing and worst performing in each city since 2003 and determined the neighborhood or neighborhoods primarily associated with each ZIP.

For New York City, OnBoard gave us ZIP codes for four of the five boroughs. Because 85% of the apartments in Manhattan are cooperatives, which do not have to publicly list property transfers, we turned to real estate appraisal and consulting firm Miller Samuel for the inside scoop.

See which ZIP codes in the 20 largest metro areas had the greatest appreciation and least price appreciation.