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Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
To answer the last question in the first post, it sounds like you should put your money into canned tuna, and a big storage facility.
 

mikecat adjuster

Beach Fanatic
Oct 18, 2007
635
293
Seagrove.
www.myspaceherspace.com
This seems to be playing out exactly the way those I've studied had predicted. I wanted to invest in this little 'up' period, but procrastinated. I have a buddy who has done well though. But he thinks we are 'up' for good. He lives in Louisiana where the unemployment is the lowest in the country right now (oil field town) and I think, is a bit sheltered from reality.

In some of the stuff I was reading a few months back, the guy said that the IMF might start selling off some gold, and apparently, China is asking them to do so. The IMF goal is not to disrupt gold prices with sales, but... Also, this guy discussed "usual summer corrections" in gold, so I've been thinking I may buy some gold, hopefully after a little dip. I don't know.

And another guy I've looked at... and understand, I don't know what the heck I'm talking about, just repeating this, but the guy says wait to buy real estate until 2011-2013 and not to listen to those proclaiming 'now' as the best time to buy. He had predicted mid to late 2009 that things would look good, but like a psunami, the bad wave would come.

He also said that late 2009 or early 2010 that oil would climb higher than high. I don't know. There are just so many factors in life that affect things, it seems near impossible to predict stuff. I'm an expert on little in life, but I wonder why oil would climb high if the economy was in the tank. But he suggested commodities in general would be a good play.

I also wonder how all the 'redistribution' by our government of funds will affect things. I assume, in part, that is what this current rally has been about. I had a neighbor who recommended a company called TIRN, who plays in teh FOREX market. I looked at it. It has returns in the 20% range, per month. It looks like a PONZI scheme to me. Too good to be true. It's hard to believe that schemes would still be going on after all of the attention given to them recently, but I just can't believe the returns TIRN is posting.
 

ASH

Beach Fanatic
Feb 4, 2008
2,156
443
Roosevelt, MN
You just need to pull your money out of the ponzi before it crashes. People made piles of money in ponzi's. :D
 

5thGenFlo

Beach Lover
Dec 18, 2007
77
25
Nashville, TN
Interesting delima you pose. I really don't like being a doom sayer, but I have to put my prediction somewhere, and this is as good a place as any. As a baby boomer, having lost money after the dot com bubble burst, having lost money after 9/11, we decided to invest in real estate, and now that's tanking. Here's my plan for the immediate future. I'm keeping my real estate holdings, even though their inflated values have a long descent ahead of them, I'm going to invest in the stock market, backed by the full faith of the government stimulus package. BUT, when the DOW hits 9500 and I can see some simblence of savings, that I once had in the stock market, I and a bunch of my fellow baby boomer buddies, who've seen their stock portfolios, aka their retirements ripped from their accounts in the past, will most likely take our money out of stocks and invest in certificate of deposits or T-bills or at worse a good ole fashioned mattress. At least then, we will be able to rest easy about our retirements with what we'll have and not what we lost. I'm wondering how many other baby boomers will do this? My prediction is another run on wall street when the DOW is back up close to the 10,000 mark, by baby boomers who want to keep something/anything for their retirement and to heck with everything after that.

My earlier prediction of a down turn in the stock market seems to be abading if only due to the stimulus money having its effects on our economy. What happened with our inflationary run due to low interest rates and greedy banks is that prices went into the stratosphere. But they will come down as we've been seeing in the latest realestate prices in this area. Yet eventhough they will come down eventually to intersect market demand, the prices will never be what they were before word was out about this sleepy little oasis called the panhandle. Those who have the money and wonder what to invest in would be wise to take advantage in this down swing and accumulate realestate bargains where they can find them. For this particular area is in for a boom. Where this country's middle class populous held the highest bid for products around the world, it is shrinking. Countries like India and China have emerging middle classes and will be and have been able to outbid us on things like oil and jobs. But what is nestled in this little alcove of Florida is a shining gem. A rare natural beauty unique on this continent, unmatched by countries like India and China, yet poised to absorb an economic bevy of commerce in the coming generations. Before the machine gobbles up what's left, before the new airport allows the spread of a population increase, I think its important to not loose site of the real value in South Walton. Purchase with preservation in mind.
 

Lynnie

SoWal Insider
Apr 18, 2007
8,176
431
SoBuc
Am having difficulties getting financing on any commercial projects right now. It's no longer 'asset based lending,' but the stars have to line up just perfectly and I am not kidding about this. And, there is serious profiling: custom home builder (not spec homes) with $5MM in revenue 2008 (toughest year, right?), I can't get a $150K line of credit for him.

Builders, contractors, realtors, mortgage brokers, appraisers - tough times to get financing. In reviewing bus. returns, if you are showing losses, lenders aren't really considering 'add backs.' Pay Uncle Sam or no financing for you.

Had a $200MM project that I couldn't get financed and the principal had to go with a 'loan shark' type situation.

We all still seem to have a good attitude: it will get better and as it does, we will all continue to acclimate.
 

fisher

Beach Fanatic
Sep 19, 2005
822
76
My earlier prediction of a down turn in the stock market seems to be abading if only due to the stimulus money having its effects on our economy. What happened with our inflationary run due to low interest rates and greedy banks is that prices went into the stratosphere. But they will come down as we've been seeing in the latest realestate prices in this area. Yet eventhough they will come down eventually to intersect market demand, the prices will never be what they were before word was out about this sleepy little oasis called the panhandle. Those who have the money and wonder what to invest in would be wise to take advantage in this down swing and accumulate realestate bargains where they can find them. For this particular area is in for a boom. Where this country's middle class populous held the highest bid for products around the world, it is shrinking. Countries like India and China have emerging middle classes and will be and have been able to outbid us on things like oil and jobs. But what is nestled in this little alcove of Florida is a shining gem. A rare natural beauty unique on this continent, unmatched by countries like India and China, yet poised to absorb an economic bevy of commerce in the coming generations. Before the machine gobbles up what's left, before the new airport allows the spread of a population increase, I think its important to not loose site of the real value in South Walton. Purchase with preservation in mind.

Now's the time to buy....

I've heard that one before. :rotfl:

If you want a second home, can handle the carrying costs and don't mind losing some money on your investment, go ahead and buy a place. If what you are talking about is investing money in panhandle real estate in order to get a good return on your money, forget it.
 

Beach Bound

Beach Comber
Apr 15, 2009
17
3
My earlier prediction of a down turn in the stock market seems to be abading if only due to the stimulus money having its effects on our economy. What happened with our inflationary run due to low interest rates and greedy banks is that prices went into the stratosphere. But they will come down as we've been seeing in the latest realestate prices in this area. Yet eventhough they will come down eventually to intersect market demand, the prices will never be what they were before word was out about this sleepy little oasis called the panhandle. Those who have the money and wonder what to invest in would be wise to take advantage in this down swing and accumulate realestate bargains where they can find them. For this particular area is in for a boom. Where this country's middle class populous held the highest bid for products around the world, it is shrinking. Countries like India and China have emerging middle classes and will be and have been able to outbid us on things like oil and jobs. But what is nestled in this little alcove of Florida is a shining gem. A rare natural beauty unique on this continent, unmatched by countries like India and China, yet poised to absorb an economic bevy of commerce in the coming generations. Before the machine gobbles up what's left, before the new airport allows the spread of a population increase, I think its important to not loose site of the real value in South Walton. Purchase with preservation in mind.

I think you are absolutely on the mark. There are so many negative people on this forum that it boggles my mind. I can only assume most of them were the ones that bought in the boom and are resentful as h**l. They don't want to admit that there ARE good deals out there and it is not a sucker's bet. Perhaps they have not traveled much and don't understand how wonderful Sowal is?? Sowal is not swampland! It is a gorgeous oasis. When it actually becomes easy for those of us more than a state or two away to get there...look out. People up here in the midwest don't know that area AT ALL. Everyone up here goes to Naples or Orlando. You go to those places and everyone is from Milwaukee and Chicago. Friends here are so fascinated when we talk about the Panhandle and the beaches. When word gets out and they can fly there nonstop, folks up here will go nuts for the area. By all means, purchase with caution in mind...but don't minimize the true value and unique qualities there. For the ultimate beach experience, it really doesn't get much better than Sowal.
 

30ashopper

SoWal Insider
Apr 30, 2008
6,846
3,471
56
Right here!
A short drive along 98 from 283 to Destin gives a pretty good indication of how CRE is doing. New mall space has expanded all the way back to the outlet malls. There is a ton of available space all along 98, and it's going to take time to fill it. Foreclosures are inevitable. I'd guess tenants will group together into the best locations with the cheapest rents leaving everything else empty for some time.

I'm not familiar with all the "little shop" CRE areas on 30A, but I have to imagine it's the same. The best locations will collect the pull back, the rest will be left empty.
 

SHELLY

SoWal Insider
Jun 13, 2005
5,770
802
I'm not familiar with all the "little shop" CRE areas on 30A, but I have to imagine it's the same. The best locations will collect the pull back, the rest will be left empty.

The biggest problem with these "little shop" CREs (and even some big ones) are that original owners sold these places during the frenzy at fairly high prices and then the investulators started 1031 flipping. Then the music stopped and the recession started, and the investulators who now "own" these properties are having a hell of a time making the monthly nut. Many of them never wanted to be long-term holders of commerical property, nor have the wherewithal to market and manage it. It's all still a trainwreck in progress.
 

Smiling JOe

SoWal Expert
Nov 18, 2004
31,648
1,773
South Florida banks face a new wave in real estate crisis

MIAMI – Sept. 14, 2009 – Just as the housing market is showing signs of life, here comes another real estate crisis.

Squeezed by plunging rents, empty storefronts, the credit crunch and a dearth of buyers, a growing number of commercial property owners are defaulting on their loans, which could unleash a new wave of bank failures and slow the region’s economic recovery.

“What we’re seeing so far in commercial real-estate [foreclosures] is just the tip of the iceberg,” said attorney Lee D. Mackson, who represents creditors who filed a foreclosure suit against Biscayne Landing, a stalled project on Biscayne Boulevard in North Miami. “There’s going to be a lot more.”

Florida’s home-grown community banks are heavily into commercial real estate loans – for office buildings, shopping centers, hotels and condos.

An exclusive analysis for The Miami Herald found that Florida banks have twice the proportion of commercial loans in their portfolios as banks outside the state.

As a result, Florida banks may have to weather the worst of the commercial real estate meltdown.

A major sign of the festering problem came on Friday, as federal regulators seized Chicago-based Corus Bank, which has been a big lender in South Florida. The bank was brought down by heavy lending in commercial real estate and construction.

The potential impact of the downturn goes far beyond the individual tragedy of a lost business or the jobs that disappear when a single project fails.

Anemic banks are in no condition to lend. And solid banks and other lenders may become even more wary of providing money to start new projects or even refinance loans as they reach maturity, as is common practice.

For consumers, mortgages, home equity loans and lines of credit could dry up even more.

“It’s another pretty heavy hit to an already hard-hit banking sector,” says Sean Snaith, an economist and director of the Institute for Economic Competitiveness at the University of Central Florida. Commercial real-estate problems, he says, “could prolong the credit crisis and make it difficult for all sorts of borrowers to get the loans they need – consumers, homeowners and small businesses.”

According to the analysis by Charlottesville, Va.-based SNL, a data-crunching firm, more than 53 cents of every dollar loaned by Florida-based banks goes for commercial real estate, compared with 24 cents per dollar among other U.S. banks.

At mid-year, 11.2 percent of the commercial real estate loans at Florida banks were delinquent, compared with 7.5 percent at banks outside Florida. And Florida banks have far less set aside to absorb bad loans.

“We not only see ‘For Sale’ and ‘Foreclosure’ signs in our neighborhoods, but ‘For Lease’ and ‘Vacancy’ signs along Dixie Highway,” says Ken Thomas, a Miami bank analyst. “Prime corner and other retail locations in the best shopping areas from Dadeland to Aventura to Boca are now vacant.”

To be sure, the nation’s biggest banks and Wall Street are also facing a potentially heavy toll from the commercial real-estate downturn.

Among the prominent projects tangled in recent foreclosure suits are the Las Olas Centre in downtown Fort Lauderdale and Biscayne Landing, the latter envisioned as a massive residential and commercial project that was to be the key to revitalizing the city of North Miami. Except for two soaring towers, Biscayne Landing never got off the ground. Instead, it ended up as a bad debt included in securities sold on Wall Street.

Many other local projects are in financial distress, including the former Grand Bay Hotel in Coconut Grove, which is facing foreclosure.

Commercial real estate mirrors the local economy. As South Florida employers lay off workers, the last thing they need is more office space. And retailers reeling from the downturn in sales aren’t opening new stores or warehouses.

Real estate development has long been one of Florida’s biggest industries, and the multibillion-dollar industry also supports spin-off businesses, from property appraisers to interior designers to furniture salesmen.

“It’s difficult to be a Florida bank without being a major lender in the real estate industry,” says Alan B. Levan, chairman and chief executive of BankAtlantic Bancorp in Fort Lauderdale. “If you are a major bank in this market, you are going to ride these cycles.”

But when times are bad, they’re awful.

Prices on commercial properties, including those in South Florida, have plunged 30 percent or more nationwide since the 2007 peak. Occupancy has slid, and rental rates are off “significantly, precipitously,” says Charles Foschini, vice chairman of South Florida markets for CB Richard Ellis, a large real estate services firm.

Landlords are cutting rents to attract or keep tenants.

At the same time, financing has dried up. Three years ago, buyers could get 95 percent financing on many buildings, and that easy money drove up commercial property prices, just as it also sent home prices soaring.

Today, there’s no money to build anything, and few banks are willing to provide money to buy existing properties.

Still worse for Florida banks, few lenders are willing to refinance maturing bank loans.

A mountain of debt on commercial properties – an average of $400 billion each year for the next several years – is coming due and hardly any of the traditional lenders are in a position to fill the gap, even if they were inclined.

Wall Street used to provide a large portion of money for commercial properties by bundling loans into securities. But that market is dead.

The Treasury Department is working to jumpstart the mortgage packaging market by offering attractive loans to encourage investors to buy the new securities.

Miami-based Ocean Bank has nearly 65 percent of its loans in commercial real estate, and almost 27 percent of that portfolio is delinquent. The bank says it has been dealing aggressively with troubled loans and expects the level of delinquencies to decline.

But another challenge for Ocean and other banks is that even good, performing loans are facing a problem called “maturity default.” In such cases, a borrower may have been making payments all along but can’t find a new lender to pay off the balance once the existing loan matures, a normal part of commercial real estate lending.

That’s because the property value has plunged. And with rental rates down and vacancies up, the properties look like poor risks to lenders.

When cash flow and equity allow it, “We are having to extend maturities on existing loans until the credit markets open up,” says Walter De Villiers, vice president and head of real estate lending at Ocean Bank.

Again, when the banks can’t extend the loans, the customers end up in default, typically hurting both the borrowers and the banks.

Las Olas Centre illustrates the refinancing challenge. Last month, Wachovia filed a $220 million foreclosure suit in state court against Los Angeles-based BentleyForbes, which bought the property at the market’s peak in 2007.

The upscale towers at 350 and 450 Las Olas Blvd., which included office and retail space, boast such prominent tenants as Huizenga Holdings and Smith Barney.

Stephen B. Meister, a New York attorney for BentleyForbes, said Wachovia had encouraged the commercial real estate company to borrow funds to buy the Las Olas property with an agreement to repay the debt with proceeds of an initial public offering. But the stock offering was abandoned amid the market turmoil, he added.

According to court papers, Wachovia has extended the loan maturity several times. A Wachovia spokeswoman declined to comment.

“This property has 95 percent or greater occupancy, and it’s in great shape,” Meister said. “There just is no refinancing market right now.”

Copyright ? 2009, The Miami Herald, Martha Brannigan. Distributed by McClatchy-Tribune Information Services.
 
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