Daily Business Review
Hugo Pacanins has been named vice president of development for Ram, an affiliate of Ram Development. He was a development manager with the company.
Daily Business Review
Hugo Pacanins has been named vice president of development for Ram, an affiliate of Ram Development. He was a development manager with the company.
By Polyana da Costa, via Daily Business Review
When Frank Ginder and his wife signed a pre-construction contract to buy a $279,000 condo in a Palm Beach Gardens development about two years ago, they couldn’t imagine they would get the unit at a hefty discount — or end up paying cash.
“The circumstances changed for the builder, and they started to bring the price down to encourage us to close,” Ginder said. “At first I was planning to finance with IndyMac but then they sort of disappeared.” The bank was seized by federal regulators in July.
The Ginders turned to Bank of America, “but they were having their own problems at the time so I said, ‘You know what, let’s pay cash for this.”
Ginder tapped into his savings and his 401(k) retirement account and closed on the $163,000 purchase of the unit a few weeks ago.
The Ginders are part of a small but growing group of South Florida home buyers shunning tight-fisted lenders and using their hard cash to acquire properties, often at deeply discounted prices.
Ron Shuffield, president of Esslinger Wooten Maxwell, a large Coral Gables-based residential brokerage firm, said that over the last three months cash buyers, who typically made up about 10 percent to 12 percent of his deals, have increased to about 30 percent of all residential sales handled by his firm.
The homes range from small, lower-end condos to multimillion-dollar residences. While the buyers include investors, many plan to live in the properties, he said.
One is Tiffany Rubiano, who paid $242,900 in cash for a two-bedroom unit at Midtown, the same Palm Beach Gardens development where the Ginders purchased. Rubiano said she could not have bought the unit without financing if the developer hadn’t cut the price.
“I am encouraging everyone who can to do cash deals,” Rubiano said.
Like Frank Ginder, Michael Melillo also never planned on pulling money out of a retirement account to pay cash for a house. But times have changed, he said. “My wife worked at a bank for 20 years,” Melillo said. “In the past we would have picked up the phone and gotten a mortgage in 30 days. Nowadays, even though I have a great credit score, to me, getting a mortgage is out of the question. It’s just too much of a hassle.” Melillo recently paid $209,000 cash to purchase a condo at Summer Chase in Lake Worth. The unit originally listed for $229,000.
Howard Solomon, an agent at Century 21 Tenace Realty in Boynton Beach, said 95 percent of his cash buyers plan to live in the homes they buy. About 30 percent of his deals are all-cash transactions, he said. “In the old days, when it was easy to get financing only 3 to 4 percent of my deals were cash,” he said.
Uri Vaknin, vice president of sales at Midtown in Palm Beach Gardens, said buyers with good credit and who meet stricter lending guidelines can still qualify for mortgages.
But fewer buyers qualify for financing and those who do typically have to endure lengthy loan application process. And desperate developers are eager to unload properties even if that means slashing prices to lure cash buyers. “In this market the faster someone closes the better it is,” he said.
Midtown is a mixed-use development completed early this year with 225 condo units, including 45 that have closed, Vaknin said. Until recently, most Midtown buyers financed their purchases through lenders, but in the past several months two out of three potential buyers that have come into the sales center said they would likely pay in cash, he said.
Vaknin said he closed four cash deals Thursday and had another scheduled to close today. All the deals were for substantially less than the units were priced. “It’s the state of the market,” he said. “You have to be realistic. You do what you need to do to sell the product,” Vaknin said.
Those who do have cash in hand are aware of sellers’ desperation, said Marcie DePlaza, division president of GL Homes. Most people in the market think they have bargaining power if they come with cash — and they do,” she said. DePlaza said GL Homes is negotiating with a local doctor who plans to take money out of his 401(k) to buy a house. He has offered 40 percent of GL’s original price. DePlaza, who said the company has seen at least a 10 percent increase in the number of cash buyers, said GL will make a counteroffer.
She said cash buyers have become more appealing to developers, not just because they represent a near-certain deal, but also because the approval process of lenders is taking much longer than usual.
“There is financing out there but a deal that would take three to four weeks to close now takes six to seven weeks, and some sellers can’t or don’t want to wait that long,” she said.
In many cases, especially with condos, properties can’t even be financed since lenders generally won’t make loans in developments where there are excessive foreclosures or if the condo association has financial troubles. The only way to sell those in the current market is to cut the price drastically, Shuffield said.
“I had one condo the other day where we had negotiated the price with the seller from $250,000 to $180,000,” Shuffield said. “But we found out that the condo association had some type of lien on it and no lender would lend on that building. The seller immediately said, ‘I’ll cut it to $160,000 if you can pay cash for it.’ ”
Shuffield and other real estate professionals said the volatile stock market has contributed to the increase in cash buyers since many are bailing out of equities. That’s part of a historic pattern. Over the years, Shuffield said, real estate has yielded higher returns than stocks.
“In 2002, when the dot-com stock market crashed, a lot of those investors moved over to real estate,” he said. “Since then the median price of a single-family home in Miami-Dade has risen from $155,000 to $265,000 — an increase of 71 percent over the median price of $155,000 on Jan. 31, 2002. The Dow was at 9,907 on January 31, 2002 and closed Wednesday at just under 8000 — a decrease of about 20 percent over the years.” Unlike stocks, you can’t simply cash out on a house overnight, Shuffield noted.
“There are people taking money out of the stock market and their savings and buying homes,” said Gregory Holmes, with ReMax Prestige in West Palm Beach, who also has been dealing with several cash buyers.
Seniors in particular are tapping into their retirement savings to pay cash for homes, Solomon said. “Most of my cash buyers have been people who are 55 and over or young people who are starting out and were given money by relatives to buy a home for themselves,” Solomon said.
Cash buyers and the continuing decline in home values have produced a modest uptick in sales. In Miami-Dade, single-family home sales for the third quarter were about 10 percent higher than in the same period last year, according to Multiple Listing Service data compiled by EWM. In Broward, sales were up 19 percent in the third quarter compared with the same period a year earlier, according to EWM.
Third-quarter sales increased 9 percent in the West Palm Beach-Boca Raton area for the same period, according to the Florida Association of Realtors,
But Brad Hunter, a principal at Metrostudy, a housing research firm, said there is still a way to go until prices hit bottom. “Inventory is going down, but this is only the beginning,” he said. “We are still going to see continued downward pressure in prices through next year.”
Polyana da Costa can be reached at (561) 820-2065. Ron Shuffield photo by Richard M. Brooks
FOR IMMEDIATE RELEASE
Thorp & Company
Palm Beach Gardens, Fla., Nov. 20, 2008 – Ram is pleased to announce the promotion of Hugo Pacanins from development manager to vice president, development, based in its Fort Lauderdale office.
Pacanins, who joined Ram in 2005, has played a key role in several high-profile residential and mixed-use projects, including Palmetto Park in Boca Raton, Fla., and Sheridan Station in Hollywood, Fla., which are both projected to begin construction in 2009. He also led the development efforts on the recently completed Milano Apartments in Miramar, Fla., which is currently enjoying the fastest lease-up pace of any property in Ram’s history.
“Hugo has continually demonstrated top-level performance and commitment to his work and to the Ram team,” said Casey Cummings, president of Ram. “His in-depth expertise in commercial real estate construction and development is integral to the company’s continued success.”
He holds a master’s degree in business administration with a concentration in real estate and strategy from the University of California at Berkeley and a bachelor’s degree in civil engineering from UCAB in Caracas, Venezuela.
Founded in 1978, Palm Beach Gardens, Florida-based Ram is an affiliated group of companies comprised of Ram Development Company, a leader in retail, residential and mixed-use development and acquisition, and Ram Realty Services, a provider of residential and retail management and leasing services. In addition to its headquarters in Palm Beach Gardens, Ram has offices in Fort Lauderdale and Tampa, Fla., Chapel Hill, N.C., and Atlanta, Ga. Currently, the company manages approximately 2.5 million square feet of retail property and 3,000 apartments and is active in Florida, North Carolina and Georgia. Ram is committed to making places that are socially responsible, economically vibrant and environmentally sustainable. For more information, visit www.ramrealestate.com.
By PAUL OWERS, via Sun-Sentinel
Buying a South Florida home is in vogue again as prices continue to crater. So who’s snagging all these bargains? First-time buyers are stepping forward, overjoyed at the idea of finally being able to afford places of their own. Retirees paying all cash also are getting into the game, yanking their money out of the volatile stock market and putting it back into real estate.
Even investors are returning to the closing table. They’re not flipping properties for quick profits anymore. Instead, they plan to live in the homes or rent them out, at least until the market recovers.
Joe Galinskie is due to close any day on a condo in Boca Raton, but he’s not stopping there. He wants to buy a dozen properties over the next year or so, with plans to rent them. “This is the first time in [a while] that you can buy something and have it pay for itself,” said Galinskie, 35, a stock trader who lives west of Boca Raton. “I’m looking towards the appreciation long-term.”
A typical used home in Broward and Palm Beach counties now sells for less than $295,000, a price not seen here since spring 2004, according to the most recent data from the Florida Association of Realtors. Distressed properties fetch far less than that as desperate sellers and lenders slash prices to make quick sales.
Many existing condominium units, meanwhile, are going for under $140,000, nearly 40 percent less than two years ago. Age-restricted communities such as Kings Point and Century Village are seeing growing interest in one-bedroom condos selling for less than $50,000, real estate agents say.
It’s no wonder that once-skittish buyers are jumping back into the housing market, creating a sales surge for the first time in four years./p>
“People are starting to say, ‘Wow. How much lower can prices really go?'” said Brad Hunter, a housing analyst in West Palm Beach. “It’s pretty clear right now that people have a buy-and-hold strategy.” In July, August and September, sales of existing homes rose each month by as much as 52 percent in Broward and 11 percent in Palm Beach County from a year ago, the Realtors group said. Condo sales also have been brisk over the same period. Properties in the $100,000 to $250,000 range appear to be the most popular among buyers, agents say.
Despite the recent sales rise, the housing market is expected to remain soft into 2009 because of the slow economy and the large supply of homes for sale that will continue to drive down prices.
Analysts wonder whether the recent sales euphoria will continue much longer. Credit started tightening during the summer of 2007, but lenders have become even more conservative after the financial implosion on Wall Street in September and October. Florida’s rising unemployment also is a major concern for prospective home buyers. On Monday, the state Realtors association will release October’s existing home sales and prices, which reflect deals that were agreed to over the summer, before the financial meltdown.
Some agents are worried the November and December figures could plunge. “Those could be really scary,” said John Mike, past president of the Realtors Association of the Palm Beaches. “People are nervous to make a move because they’re concerned that their job is not going to be there.”
Rebecca DiLenge’s only concern was in not buying. She and two roommates were renting an apartment in Pembroke Pines for $1,700 a month. But with home prices falling, DiLenge figured she could buy a home for as much as she was paying in rent.
Like other young professionals looking to buy their first homes, DiLenge scoured the market for foreclosures. Most of the properties were in poor condition, but she was drawn to a two-bedroom condo in Weston listed for $165,000. She got it for $129,000.
“Ideally, I wanted to wait a little longer before I decided to buy a home,” said DiLenge, 25, a personal vacation planner for Carnival Cruise Lines. “But with prices so low now, it would have been foolish.” Falling prices also are attracting people who don’t need mortgages.
At the 225-unit Midtown at the Gardens condo development in Palm Beach Gardens, roughly eight of 10 buyers aren’t interested in financing, said Uri Vaknin, a representative for the developer, Ram Realty Services.
Since July, Midtown has closed four all-cash sales, and another four are scheduled to close in November. Midtown prices essentially are half of what they were when construction began in late 2005. A two-bedroom condo then was priced at about $400,000; today, it’s selling in the low $200,000 range.
Cash buyers may be able to negotiate 10 to 15 percent off the sale price because the closings are quick and easy, Vaknin said. “When you’ve got cash sitting in the stock market or in a mutual fund that’s losing money, it makes sense to liquidate,” he said. “People view real estate as a safe harbor for their cash.”
Frank Ginder and his wife, Susan Bleda, are semi-retired owners of a furniture and interior design business with three grown children. The couple paid $170,000 for a one-bedroom Midtown condo originally priced at $279,900. Ginder and Bleda, who rent out their home in Wellington, planned to get a mortgage for the condo, but their California lender, IndyMac, failed this summer. Faced with the prospect of losing the Midtown deal or paying cash, Ginder and Bleda chose the latter.
“To me, this couldn’t be a better time to buy real estate, if you believe in an area and the product and the builder,” Ginder said. “Real estate has always been a good long-term investment.”
Thorp & Company
150 Alhambra Circle, Suite 900
Coral Gables, FL 33134
By Chris DeStefano, via Palm Beach Post/Real Estate Weekend
Uri Vaknin’s love of the arts — and the extreme — has taken him all over the world. It also has put him on a new career path that he never had imagined.
Vaknin is the vice president of business development and sales for The Marketing Directors, which handles the sales and marketing for The Residences at Midtown in Palm Beach Gardens.
Before getting involved with real estate and joining The Marketing Directors, Vaknin owned an Atlanta art gallery that was featured in several national magazines. “I look at selling real estate as a piece of artwork,” Vaknin said. “And when you have a great development like Midtown, you can sell it as a piece of art.”
Midtown, on PGA Boulevard between Interstate 95 and Florida’s Turnpike, just west of Military Trail, is a mixed-use community that features one- to three-bedroom residences that all are within walking distance to shops, restaurants, a 500-seat cultural center and a 300-seat banquet hall.
Developed by RAM and completed in early 2008, Midtown offers 225 lofts and condominiums in three four-story Mediterranean-style buildings and a two-story building above the retail shops of Main Street. Vaknin also has put his artistic touches on the property. Black-and-white photographs hang in the crème-colored hallways of the four-story buildings, while the community hosts cultural events such as “Art in the Gardens” with 100 regional artists set for Nov. 22-23.
There also is a landscaped Zen garden, the perfect spot to contemplate which nearby restaurant — including Pizza Fusion, Saito’s Japanese Steakhouse, Field of Greens, Cantina Laredo, III Forks, J. Alexander’s and Marble Slab Creamery — to walk to for dinner.
“To me, it’s so much more enjoyable to sell something when you have all those wonderful components and cultural programming,” he said. “People are looking for that.”
Just east of the community is Garden Square, with even more restaurants, shops and a Publix within walking distance.
“What residents love about Midtown is the location,” Vaknin said. “You are right off I-95 and near the turnpike, you are a few miles from the beach, and The Gardens mall is right on the other side of the highway. And, of course, real estate is all about location, location, location.”
Vaknin, 39, said The Marketing Directors has been working with Midtown since last spring. The community, which is 40 percent sold and offers immediate occupancy, features one- to three-bedroom units priced from the $150,000s to the low $400,000s.
“We have had consistent sales here,” Vaknin said. “We have been working on projects all over the Southeast, and this property is our shining star. I think it’s partially because people love the property, but our pricing is very realistic.” Vaknin, whose father is Moroccan and his mother German, speaks fluent German and has lived in Europe. But he was raised in Atlanta and now spends two days a week at Midtown and two days a week in Chapel Hill, N.C., at another property The Marketing Directors is overseeing.
He has worked for the company for two years, since it started its Southeast Division.
He was content with his art gallery until a real estate opportunity came knocking in 2001. “David Tufts, president of The Marketing Directors, was a client of mine. I mentioned to him that I had my real estate license, and he said to stop by his office Monday morning. I thought that he wanted to talk to me about buying more artwork. It turns out he wanted to talk to me about selling condos. “I said, ‘You know what? Let me try it out and see if I like it.’ Well, it took off, and I wound up being the company’s No. 1 sales agent for three years in a row.”
Vaknin said that, in 2006, he completed 249 deals, selling $86 million in real estate to make him the No. 2 sales agent in Atlanta.
But it’s not all work for Vaknin. He has traveled the world — including riding a camel through Jordan and Israel, spending a month in Africa, climbing Mount Kilimanjaro, and camping in the Serengeti (where he couldn’t leave his tent at night because giant hippopotamuses were nearby).
He also went skydiving out of a plane at 20,000 feet to celebrate a birthday. “I work very hard, but I play hard too,” Vaknin explained. He also admits an “indulgence” — an affinity for driving fast cars. He owns a Porsche Boxster.
“Real estate sales, especially in a challenging market, can be exhausting to a certain degree, so you try to balance that by doing something in your personal life. But coming down here to Florida for a few days a week is like a breath of fresh air.”
Vaknin is doing his best to convince Midtown buyers they can experience the same feeling.
ABOUT THE COMMUNITY
Developed by RAM, The Residences at Midtown offers 12 one- to three-bedroom floor plans in a mixed-use community in Palm Beach Gardens.
Prices: From the $150,000s to the low $400,000s
Community amenities: A clubhouse with resort-style pool and spa; business and fitness centers; and kitchen, bar and media lounge; a Zen garden; tennis court; and the shops, restaurants and cultural activities within Midtown. Special features: Granite kitchen countertops, stainless-steel appliances, track lighting, impact-resistant windows, crown molding and private balconies
Directions: Take Interstate 95 to PGA Boulevard and exit west. Cross Military Trail. Proceed to the community on the right at 4655 PGA Blvd.
Hours: 10 a.m. to 6 p.m. Monday through Saturday, noon to 5 p.m. Sunday
For information: Call (561) 630-5757.
Web site: www.midtownpga.com
The Palm Beach Post – Wednesday, November 12, 2008
Where we ate: Pizza Fusion, 4783 PGA Blvd., Palm Beach Gardens (in the Midtown plaza)
Could we do it: Yes. Did we? No – the food was under, but opting for a soda and multi-grain crust put us, with tax and tip, at $28.25.
What we ate: If you’re looking for a greasy affordable pizza to down with your buddies on a football Sunday, Pizza Fusion isn’t an ideal option. This isn’t Nick and Sal’s corner pizza joint – think Jerry Garcia and Mountain Girl. Pizza Fusion proudly boasts its eco-heavy niche, from recyclable pizza boxes, hybrid delivery cars and custom
We went with the Greek pizza, which was piled with mozzarella, feta cheese, organic tomato sauce, artichoke hearts, fresh basil, tomatoes and kalamata olives. We added the multi-grain crust for an additional $2 — a nice touch on an already tasty, quality pizza that wasn’t dripping in grease.
The large pizza (18″) was more than enough for two of us, although two hungry adults could finish it in one sitting. The extra large (28″) could probably feed at least three.
The water was free, and we shared a sugar-cane soda for $2.
Service: You have three options at Pizza Fusion – delivery, take-out or sit down. We dined outside, with a nice view of the plaza’s fountain. Our order was simple enough that it would have been tough to screw up, although our server brought us fresh grated parmesan cheese for no charge.
Options: There are plenty of choices, including gluten-free crust for an additional $5, giving celiac pizza lovers a rare chance to chow down. A basic large cheese pizza starts at $16 with additional toppings costing $2 apiece, or you can choose one of the many unique specialty pizzas. The menu also includes salads, sandwiches, wraps, natural sodas, organic beer and area wines. On Tuesdays, customers receive a free bottle of wine if they buy an extra-large pizza.
Would we go back? Sure, just not if the Gators or Dolphins are playing. This is a classy pizza joint – not necessarily in the décor, where you’ll feel at home in a T-shirt and sandals. But a pie will cost almost nearly double the price of a regular chain pizza joint, so we’d prefer to enjoy it by the fountain sipping on a glass of wine.
– Andrew Abramson
By DON JORDAN, via Palm Beach Post
BOCA RATON — The city’s downtown is growing up.
City council members tonight unanimously approved new development guidelines that will increase the maximum allowed height for new buildings downtown from nine to 12 stories, or 100 to 140 feet.
The guidelines will eliminate the “large-scale boxiness” that has been the norm under current standards, which force developers to cram more space into fewer floors, said Ray Gindroz, principal emeritus for Urban Design Associates, a Pittsburgh-based firm that worked with the city on the new standards.
“The objective was to produce a pattern book … that could carry the city through the next generation of development,” Gindroz said.
The unanimous vote caps months of planning sessions, meetings with community groups and public hearings. Council members and residents have expressed concern in the past with the building heights allowed under the new standards.
But city officials and consultants tonight were quick to point out that taller doesn’t necessarily mean larger.
The standards, while allowing taller heights, restrict a development’s overall size to what was allowed under the previous guidelines. In other words, if one section of the building is taller than nine stories, another section must be shorter to offset the increase in size. Instead of looking like boxes, advocates argue, new buildings will have more articulated profiles and multi-level tiers.
“It gives the right mix of flexibility and creativity for our downtown,” council member Bill Hager said.
The council approved the guidelines on the same night that the council, acting as the city’s community redevelopment agency, approved a large mixed-use development that will serve as what consultants dubbed the “guinea pig” for the new standards.