Miami Report 2010

MYTH VS REALITY

THE SOUTH FLORIDA CONDO MARKET AS OF SEPTEMBER 2010.

An in-depth analysis and presentation of facts, prepared by:

AS WE SEE IT A year ago, we published a report called “Perception vs. Reality” because we felt the Miami Condo Market was suffering from a major mis-perception.

Since 2005, the media and conventional wisdom had propagated a myth that a tidal wave of 62,000 new condos had overwhelmed the market, and would take a decade to absorb.

As they are inclined to do, the media propagated their own prophecy with continuing stories of overbuilding and falling sales.

But a few years along the way, the facts diverted from the headlines, and the reality left the perception so far behind, it can only be called an enduring “myth”.

Too many agents, would-be buyers and journalists still believe the myth. And it holds them back, distorts their business, and ignores a reality that is passing them by.

Reality check #1:

Nothing close to 62,000 new Miami condos got built. The real total is 17,502.

The truth is less than a third of the myth.

Reality check #2:

Of the 17,502 built, 12,454 are sold. That’s over 70%.

Reality check #3:

In the rest of the South Florida Market, stretching from South Beach to Ft. Lauderdale, another 15,093 units were built. 11,876 have been sold (561 units construction suspended.) Only 2,656 units remain.

Reality check #4:

South Florida has no new condo construction. The current inventory will be largely gone by late 2012 or early 2013.

There is no new inventory within sight before 2013, if then.

Reality check #5:

South Florida’s new condos have been selling at an average of over 4,000 a year since 2005, and the pace is accelerating.

Prices are stabilizing and starting to increase. Bulk sales are very rare.

The buyers are back.

Let’s make it simple The Myth was “Overbuilt” The Reality – coming faster than you think – will soon be “Sold Out”.

A word to the wise.

- Philip Spiegelman, ISG Principal October, 2010

The myth is born: May 2005 62,000 CONDOS COMING Sunday, May 22, 2005: The Miami Herald reports that over 62,000 new condo units will be built in downtown Miami.

This number will be breathlessly reported by worldwide media as proof of the boom and then the crash.

The reality: september 2010 ONLY 17,502 BUILT

By September of 2010, less than one-third of the condo wave was built and delivered. Of 17,502 built, 12,454 have been sold and closed.

Today’s inventory is now 5,048.

ONLY 5,048 UNITS REMAIN FOR SALE At the current pace, downtown Miami inventory will be “Sold Out” by 2012.

There is no new construction. No new inventory can be delivered until 2013, at best.

BRICKELL 1. 500 Brickell East - 500 Brickell Ave. 2. 500 Brickell West - 55 SE 6 St. 3. 1060 Brickell - 1050 Brickell Ave. 4. 1050 Brickell - 1060 Brickell Ave. 5. Asia Brickell Key - 900 Brickell Key Blvd.

6. BRICKELL Axis South - 79 SW 12 St. BRICKELL 7. 1.Axis500 North - 1111 SW500 1stBrickell Ave. Ave. Brickell 1.8. 500 Brickell East -East 500-Brickell Ave. Brickell on the River North 31 SE 5th St. 2. Brickell 500 Brickell West - 556 St. SE 6-St. 2.9. 500 West 55 SE Brickell on the River South SE 5th St. 3. 1060 Brickell Brickell Ave. 3. 1060 Brickell - 1050- 1050 Brickell Ave.41 10.

Brickell Station Villas 100 SW 10th St. 4.

1050 Brickell 1060 Brickell Ave. 4. 1050 Brickell - 1060 Brickell Ave. 5.

Asia Brickell Key 900 Brickell Key Blvd.

11.

Brickell View West 1723 SW 2nd Ave. 5. Asia Brickell Key - 900 Brickell Key Blvd.

6.Habitat Axis South -1701 7912SWSt. 122nd St. Ave. One SW 6.12. Axis South - 79-SW 7.

Axis North 1111 SW 1st Ave. Ave. 13.

Icon Brickell Tower I 465 7. Axis North - 1111 SW 1st Ave.Brickell 8.IconBrickell the River - 315thSESt. 5th 8.14. Brickell on theonTower River North - 31Brickell SE Brickell II - North 495 Ave.St. 9.

Brickell on the River South 41 SE 5th St.St. 9.15. Brickell River South - 41- 60 SE SW 5th St. InfinityonontheStation Brickell Condo 13th 10. Brickell Villas -SW 10010th SW 10th 10.

Brickell Station Villas 100 St. 16. 11.

Latitude onView the West River- -1723 185SW SW2nd 7thAve. St.St. Brickell 11.

View West -I 1723 SWBrickell 2nd Ave. 17. Brickell LoftsHabitat on Brickell - 1528 12.

One - 1701 SWAve. 2nd Ave.Ave. 12.

Habitat One 1701 SW 2nd 18. Icon LoftsBrickell onBrickell Brickell II - 1650465Biscayne Blvd.

13.

Icon Tower Brickell Ave. 13.

Tower I - 465I -Brickell Ave.11th 19.

Los Suenos De Brickell 145 SW 14.

Icon Brickell Tower II 495 Brickell 14. Icon Brickell Tower II - 495 Brickell Ave. Ave.St. 15. on- 690 Brickell - 6013th SW 13th 20. Infinity NeoInfinity Vertika SWCondo 1st 15. on Brickell Condo - 60Ct.SW St. St. 16.

Latitude on the River 185 SW 7th 21.

One Plaza West Brickell 1800 SW 1st 16. Latitude on the River - 185 SW 7th St. St. Ave. 17. onTowers Brickell - 1528 22. Lofts ParkLofts View -I115 SWBrickell 11Ave. St.Ave. 17. on Brickell I - 1528 Brickell 18.

Lofts on Brickell II 1650 Biscayne 23. Lofts Plazaonon Brickell - 950 Brickell Bay Dr. 18.

Brickell II - North 1650 Biscayne Blvd.Blvd.

19.

LosonSuenos De South Brickell 14511th SW 11th St. Ave. 19.

Suenos De Brickell - 145--951 SW St. Bay 24. Los Plaza Brickell Brickell 20.

Neo Vertika 690 SW 1st Ct. 20.

Vertika - 690Brickell SW 1st Miami Ct. - 186 SE 12th Terr.

25. Neo Solaris 21.

OneCondo Plaza West Brickell - 1800 SWAve. 1st Ave. 21.

Plaza West Brickell 1800 SW 1st 26. One The Emerald Condo Brickell -11218 SE 14th St. 22.

Park View Towers 115 SW St. 22.

- 115North St.14th 27. Park TheView Sail Towers on - SW 17011-SE950 St. Bay Dr. 23.

Plaza on Brickell Brickell Brickell 23.

Plaza on Brickell North 950 Brickell Bay Dr. 28.

Viceroy Icon Brickell 485 Brickell Ave. 24.

Plaza on Brickell South 951 Brickell Bay Ave. 24.

Plaza on Brickell South 951 Brickell Bay Ave. 25.

Solaris Condo Brickell Miami 186 SE 12th CENTRAL BUSINESS DISTRICT 25. Solaris Brickell Miami - 186- 218 SE 12th Terr.St.Terr.

26.

TheCondo Emerald Brickell SE 14th 29. The 50 Emerald Biscayne - 50Condo Biscayne Blvd.

26.

Condo Brickell 218 SE 14th St. 27.

Theon Sail on- Brickell 17014th SE 30. The Capital Lofts 117- 170 NE-SE 2nd St.14th 27.

Sail Brickell St. St. 28.

Icon -Brickell 485 Brickell 31. Viceroy EpicViceroy West -Brickell 200Brickell Biscayne Way 28.

Icon 485 Ave. Ave. CENTRAL BUSINESS DISTRICT 32. 29.

Everglades on the Bay SouthBlvd.

- 253 NE 2nd St. CENTRAL BUSINESS 50 Biscayne -DISTRICT 50 Biscayne 29.

Biscayne 50 Biscayne Blvd.

33. 50 Everglades on the Bay North 30. Capital Lofts - 117 NE 2nd St. 244 Biscayne Blvd.

30.

2nd 34. Capital Flagler First Condo - 101St.E.Way Flagler St. 31.

EpicLofts West- 117 - 200NEBiscayne 31.

West 200 Biscayne Way 35. Epic Ivy Miami Condo 90 SW 3rd 32. Everglades on the Bay South St. - 253 NE 2nd St. 32. on theonBay - 253- NE 2nd St. Blvd.

36. Everglades MetEverglades One Condo -the 300South S. North Biscayne 33.

Bay 244Blvd.

Biscayne 33.

Everglades on the Bay North 244 Biscayne 34.

First - 101St.E. Flagler St. Blvd.

37. Flagler MintFlagler Condo - 92Condo SW 3rd 34.

First Condo 101 Flagler St. 35.

Ivy Miami Condo 90 SW 3rd 38. Ivy TheMiami Loft Condo Downtown IIE.-3rd 133 NESt. 2nd Ave. 35.

90 SW St. 36.

MetbyOne - S. 300Miami S. Biscayne Blvd.

39. Met Wind NeoCondo -- 350 Ave. 36.

One Condo 300 S. Biscayne Blvd.

37. &Mint Condo - 92 SW 3rd St. MEDIA ENTERTAINMENT 37. Mint Condo - 92 SW 3rd St. 38.

The Loft Downtown II - 133 NE 2nd Ave. 40. The City 24 350 NE 24th St. 38.

Loft Downtown II - 133 NE 2nd Ave. 39. Wind by Neo - 350 S. Miami Ave. 41. Wind OperabyTower - 1750 N. Bayshore 39.

- 350 S. Miami Ave. Dr. MEDIA &Neo ENTERTAINMENT MEDIA &City ENTERTAINMENT PARK 40.WEST 24 - 350 NE 24th St. 40.

- 350Tower NE -24th St. 42. City 90024 Biscayne 900 Biscayne Blvd.Dr. 41.

Opera - 1750 N. Bayshore 41.

Tower 1750 N. BayshoreBlvd.

Dr. 43. Opera Marina Blue 888 Biscayne PARK WEST PARK WEST 900 Biscayne 900 Biscayne Blvd.

44. 42.

Marquis Condo -- 1110 Biscayne Blvd.

42.

900 Biscayne - 900 Biscayne Blvd.

43.

Marina Blue - 888 Biscayne Blvd. Blvd.

45.

Ten Museum Park 1040 Biscayne 43. Marina Blue -Condo 888 Biscayne Blvd. Blvd.

44. Marquis - 1110 Biscayne WYNWOOD-EDGEWATER 44.

Marquis Condo - 1110 Biscayne Blvd. Blvd.

45.

Ten Museum Park 1040 Biscayne 46. Ten Cynergi - 2700 Miami Ave. 45.

Museum ParkN. - 1040 Biscayne Blvd.

WYNWOOD-EDGEWATER 47. 46.

Edgewater Lofts - 2200 NE 4th Ave. WYNWOOD-EDGEWATER Cynergi - 2700 N. Miami Ave. 48. Cynergi Gallery Art - N. 333 NE- 2200 24th St.4th Ave. 46.

- 2700 Miami Ave.NE 47.

Edgewater Lofts 49. Edgewater Midblock 3250 NE 1st St. 47.

Lofts 2200 NE 4th Ave. 48. Gallery Art - 333 NE 24th St. 48.

Art 333 NE 24th St. 50. Gallery Midtown II (Mid-rise) 3451 49. Midblock - 3250 NE 1st St. NE 1st Ave. 49.

- 3250 NE 1st-St. 51. Midblock Midtown II (Mews) 3449 NE NE 1st1st Ave. 50.

Midtown II (Mid-rise) - 3451 Ave. 50.

Midtown II (Mid-rise) - 3451 NENE 1stE.1st Ave. Midtown II (Mews) - 3449 Ave. Ave. 52. 51.

Midtown II (High-rise) - 3470 Coast 51.

II (Mews) - 3449 1st Ave. 52.

Midtown - 3470 E. Coast Ave. 53. Midtown Midrown IIII II-(High-rise) 3301 NE NE 1st Ave. 52.

Midtown II (High-rise) - 3470 Coast Ave. 53.

Midrown IIII -NE 3301 NE St. 1stE. Ave. 54.

Moon bay 520 29th 53. Midrown IIIIbay 3301 NE 1st Ave. 54.

- 520NE NE22nd 29th St. 55. Moon NewMoon Wave -- 725 St. 54. bay - 520 NE725 29th St. 55.

New Wave NE 22nd St. St. 56. New OnyxOnyx on the BayBay-22nd 665 NE 25th 55.

- 725 56. Wave on theNE - 665St.NE 25th St. 57. Onyx Palermo St.St. St. 56. on the- 425 Bay -NE 665 NE 25th 57.

Palermo - 425 NE30th 30th 58. Palermo Paramount - 2066 57.

- 425Bay NEBay 30th St. NNBayshore 58.

Paramount - 2066 Bayshore Dr. Dr. 59. Paramount Platinum - 480 NENE30N30Bayshore St.St. 58.

Bay 2066 Dr. 59.

Platinum - -480 59.

- 480 NEthe 30Bay St. 60. Platinum Quantum onon the Dr. 60.

Quantum Bay- 1900 - 1900NNBayshore Bayshore Dr. 60. onon theon Bay -Bay 1900 N Bayshore Dr. 61.

Lofts the - 712 NE25th 25th St. 61. Quantum StarStar Lofts the Bay - 712 NE 61. onClub the Bay - 712NNNE 25th St.Dr. 62.

The 1800 Club - 1800 Bayshore 62. Star TheLofts 1800 - 1800 Bayshore 62. The 1800 Club - 1800 N Bayshore Dr.

The downtown miami myth. building by building THE REALITY IS: 62 BUILDINGS. 71% SOLD. ONLY 5,048 UNITS REMAIN.

17 26 27

9 25

21 22 24 17 2317

5

19 20 10 3 4 1 2

12 11

15 8

37

6 7 30

35

39 19 111914 12 11 12 16 20 28 31 15 15 27 27 9 9 26 26 20 13 38 4 10 10 3 37 30 4 25 3 37 30 6 35 8 21 25 7 22 6 7 35 8 21 22 2 34 24 1 12 24 39 23 39 23 18 14 14 28 31 16 16 13 13 28 31 38 38 32 29

5 5 29

29

34 34 18 18

33

36

33 32 32 33

36

36

43

43

43

42 45 44

42 42 45 45

44 44

40

41

4

40 41 46 47 48 49 40 41 46 47 48 50 49 51

5

50 51 52 53 54 55 50 51 52 53 54 56 55 57

5

56 57 58 59 60 61 56 57 58 59 60 61 62 62

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009 While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

75%- 100% SOLD OUT 50%- 74% SOLD OUT Under 50% SOLD OUT

Canyon Ranch South (17) Canyon Ranch Center (Sold Out) Canyon Ranch North (122)

THE MYTH EXTENDS UP The Beach From south beach to hollywood.

58 Buildings built.

7,421 units sold. only 2,019 units remain.

Cabana (Suspended) Terra (68) Nobe Bay (Suspended) Casablanca (41)

Regatta (Sold Out)

MEI (11) 63 Nobe (21)

SOUTH BEACH MIAMI BEACH

26 Buildings Built.

2,946 Units Delivered.

1,954 Units Sold.

ONLY 992 UNITS REMAIN

6000 Indian Creek (Sold Out)

Fountainebleau III (28)

Caribbean North Tower (2) Caribbean South Tower (7)

9

Mosaic (Sold Out)

Cipriani South Beach (Suspended) Gansevoort South Beach (255) W South Beach Residences (244) Arte City - The Governor (18) Arte City - Artepark North (41) Arte City - Artepark North (43) Parc Place (On Hold) Capri South Beach (49)

75%- 100% SOLD OUT South of Fifth (25) Apogee South Beach (Sold Out) Continuum II North (Sold Out) While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

50%- 74% SOLD OUT Under 50% SOLD OUT *Representing Buildings Built From Mid 2005 through Dec. 31, 2009

AVENTURA

BAL HARBOUR

2 Buildings Built.

725 Units Delivered.

539 Units Sold.

ONLY 186 UNITS REMAIN

10 Buildings Built.

1,698 Units Delivered.

1,502 Units Sold.

ONLY 196 UNITS REMAIN Harbour House (33)

Atrium (2)

Uptown Lofts (Sold Out) St. Regis North Tower (65) St. Regis Center Tower (23) St. Regis South Tower (65)

3030 (27) Eastside (Sold Out) Artech (30) Peninsula II (75) Alaqua (Sold Out) Terzetto (62) Venture West (Sold Out) Venture East (Sold Out)

75%- 100% SOLD OUT

75%- 100% SOLD OUT

50%- 74% SOLD OUT

50%- 74% SOLD OUT

Under 50% SOLD OUT

Under 50% SOLD OUT

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009

While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009

SUNNY ISLES to HOLLYWOOD 20 Buildings Built.

4,632 Units Delivered.

3,987 Units Sold.

ONLY 645 UNITS REMAIN

St. Tropez Tower I (18) St. Tropez Tower II (27) St. Tropez Tower III (60)

Regent Park (Sold Out) Radius (Sold Out)

Trump Hollywood (70) Acqualina (Sold Out) Ocean Palms (Sold Out) Ocean 4 (Sold Out)

Diplomat (Sold Out) Beach Club (Sold Out)

Jade Ocean (131)

Duo East (Sold Out) Duo West (Sold Out)

1

Jade Beach (Sold Out)

Turnberry Ocean Colony S (Sold Out) Turnberry Ocean Colony N (Sold Out)

Ocean Marine Yacht Club (Sold Out)

Trump Tower I (Sold Out) Trump Tower II (68) Trump Tower III (271)

Solis (Suspended)

SUNNY ISLES

HALLANDALE/ HOLLYWOOD

75%- 100% SOLD OUT

75%- 100% SOLD OUT

50%- 74% SOLD OUT

50%- 74% SOLD OUT

Under 50% SOLD OUT

Under 50% SOLD OUT

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009

While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009

1 2

HALLANDALE | HOLLYWOOD

2 4

2,238 Units Built 70 Units for sale

3

1 4 3

9 BUILDINGS*

SUNNY ISLES 4

AVENTURA

2

4 4

4

1

5

4

2,394 Units Built 575 Units for sale

3

6

3

1,698 Units Built 196 Units for sale

11 BUILDINGS*

4

1 2

12

8

5

7

The remaining inventory from South Beach to Hollywood represents less than two year’s supply.

Bal Harbour

1 3

725 Units Built 186 Units for sale 2 BUILDINGS*

1 3 2

5 6

13

12

4

14 15

7

MIAMI BEACH | SOUTH BEACH 2,946 Units Built 992 Units for sale 26 BUILDINGS*

BRICKELL | DOWNTOWN

8

17,502 Units Built 5,048 Units for sale

10 9

62 BUILDINGS*

19

20 44

17

16

49

21

18 22 45 46

25

40

34

33

39

48 36 42

32 41 35 19 37 50

16

24

1

21

6

26 27

3 2

14

26 23

12

13

20

4

38

29

5 18

17

15

28

30

25

31

24 8

10

9

11 7

In the 5 years from 2005 - 2010, 74% of all units delivered were sold, at a pace averaging over 4,000 units a year.

6

10

47

120 BUILDINGS BUILT. 27,503 Units delivered.

20,436 units sold. only 7,067 units remain.

9

10 BUILDINGS*

43

Brickell to hollywood

22

23

While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

No new construction is underway. No new unit inventory can be delivered in less than two year’s.

GREATER FORT LAUDERDALE: MYTH vs. REALITY

E v e rg l a d e s

The same misconception that haunted Miami is attached to Fort Lauderdale and Broward County.

The Reality Is This: 39 Buildings Built.

5,092 Units Delivered.

4,455 Units Sold - Over 87% ONLY 637 UNITS REMAIN Sunrise

1. Artesia 2. Tao

Plantation

3. Veranda

Fort Lauderdale

4. Lauderdale One 5. Lauderdale Tower 6. Le Cercle 7. Porto Venezia

Fort Lauderdale Beach

8. Sapphire Condominium North 9. Sapphire Condominium South 10. Symphony Tower One 11. Symphony Tower Two 12 Fountains on Ocean Blvd. North 13. Fountains on Ocean Blvd. South 14. Ritz Carlton [Castillo Grand Residences] 15. Las Olas Beach Club 16. The Vue North 17. The Vue South

Downtown Fort Lauderdale

18. Nola Lofts 19. Strada 315 20. Foundry Lofts 21. The Mills Lofts 22. Avenue Lofts Condo Two 23. Avenue Lofts Condo Three 24. Avenue Lofts Condo Four 25. Avenue Lofts Condo Five 26. Coconut Grove Residences

Las Olas

27. Aria 28. Place Des Arts 29. 45 Hendricks 30. The Meritage 31. Las Olas by the River 32. Nu River Landing 33. 350 Las Olas Place 34. Las Olas Grand 35. Watergarden 36. Las Olas River House 37. Sole at Fort Lauderdale 38. The Port Condo 39. Waverly at Las Olas

*Representing Buildings Built From Mid 2005 through Dec. 31, 2009 While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore makes no claims, promises, or guarantees about the accuracy, completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

Only a handful of buildings have appreciable new inventory. And with only 637 units to sell - and no new construction or deliveries until at least 2012- by 2011 this market may be “sold out.”

Summary of new South FLORIDA cond ominium supply

17,502

62 Buildings

Actual & Projected inventory of developer supply [Built Between 2005 - 20 09]

Virtually no new construction has started since 2007.

Therefore, no new supply is projected to be added through 2012.

The Miami Beaches Between 2005 and 2009 approximately 10,001 condominiums units came to market in the areas of Miami Beach, South Beach, Aventura, Sunny Isles, Bal Harbour, Hollywood Beach and Hallandale Beach. Approximately 75% of this inventory has been absorbed, leaving only 2,019 remaining. This remaining inventory is concentrated primarily in Miami Beach and South Beach, (992 units) in buildings that have recently resolved financial restructuring and ownership issues.

PROJEC TED

Greater Fort Lauderdale The number of new condominium units introduced to the Greater Ft. Lauderdale market between 2005 and 2009 was significantly less than in Greater Miami, only 5,092 units were built. The majority of that inventory has already been absorbed and only 637 units remain as of this Report. The remaining inventory is concentrated in a handful of buildings that have recently resolved ownership and/or developer changes and are now being re-introduced to the marketplace at significantly lower prices compared to those during pricing peaks from 2005 to 2006. The current absorption pattern here suggests a one year supply of new condominium inventory.

637

2,019

1,088

3,789

5,048

5,092

39 Buildings

9,616

10,001

58 Buildings

AC TUAL

Downtown Miami The focus of the media’s real estate boom and gloom, Downtown Miami has surprised its harshest critics with its amazing resiliency. Of the 62,000 units projected to be built between 2006 and 2009, only 17,502 units were actually built and as of September 1, 2010, only 5,048 units remain. The status and salability of the remaining inventory varies, as several large buildings are in a state of flux due to financial and ownership restructuring; several were delivered to the market in late 2009 and others have suspended sales hoping to take advantage of market driven price increases.

2006 - 2010 Miami - Fort Lauderdale Closed Sales Summary

6,645 4,551

The foundation for ISG’s projections is based on each areas previous sales history and an analysis of the remaining inventory, taking into consideration each building’s current status, price ranges, remaining unit mix and location. In some instances, developers have opted to rent their remaining inventory rather than offer it for sale, expecting to take advantage of upward pressure on pricing as inventory continues to diminish.

3,966

3,176

2006

2007

2008

2009

Closed Condo Sales While ISG strived to make the information in this Report as timely and accurate as possible, third party sources were used and ISG therefore completeness, or adequacy of the contents of this Report and expressly disclaims liability for errors and omissions in its contents.

makes no claims, promises, or guarantees about the accuracy,

4,498

1/2010 8/2010

Conclusion ISG has been positioned at the forefront of South Florida’s real estate market for many years, working with many prominent developer clients, as well as thousands of local, national and international brokers. We have found that our own comprehensive market studies are useful to our clients and fellow realtors in better understanding the many factors that have impacted the current market. Interpreting the multitude of economic events that continue to influence the nation’s real estate market and Florida in particular is essential in understanding future real estate trends.

Compared to most U.S. cities experiencing the much publicized real estate recession, the Greater Miami and Fort Lauderdale markets have proven to be uniquely resilient, especially considering their sizable overhang of new condominium inventory and today’s lack of available end-user financing. While the steady absorption and recovery of these markets can be attributable to a number of factors, the most significant is the substantial price reductions being offered by the developers--almost half of their 2005–2006 price peaks.

Another contributing reason is the realization that virtually no new condominium supply will be introduced to these markets for at least another two years.

Miami and Fort Lauderdale are closely linked to Latin America in many ways and are commonly referred to as the “Gateway to Latin America”. Further recognized as Latin America’s financial and security haven, Miami and Fort Lauderdale continue to benefit from this relationship culturally, socially and economically, as business development grows, foreign direct investment increases and visitation from Latin America expands.

Finally, the Miami and Fort Lauderdale markets continue to be an attractive destination worldwide to those wanting to live, work and invest. Whether it’s to own a property as a primary home, second home or vacation home, today’s current residential pricing has brought that dream within the reach of many throughout the world.

S S A

EEN

AS S

IN

Big investors buying multi-family

Invesco pays $104M for Plantation apartments South Florida Business Journal - by Oscar Pedro Musibay

At $217,000 a door, it’s among the highest price paid for an apartment building in the aftermath of the real estate meltdown, experts say.

Invesco paid cash for the complex, another source familiar with the transaction said.

Third St., was completed in September and features a mix of garden-style units and townhomes with garages. It is more than 80 percent leased.

It is in a very high-profile location, at the nexus of Interstate 595, Interstate 75 and the Sawgrass Expressway.

CB Richard Ellis Executive VP Robert Given and the brokerage’s South Florida MultiHousing Group represented seller Trammell Crow Residential. The original developer, Callum Parrott of Mill Creek Residential Trust LLC, was formerly with Trammell Crow

“This transaction is indicative of the institutional market’s generally strong perception of Broward County’s potential in the near and long terms,” Given said in a statement about the transaction. “We are expecting an average rent growth in this area of nearly 5 percent over the next three years, which is fueled by the burn-off of condo inventory, the lack of quality assets, lack of new supply, and recovering economy.”

Residential The Alexan Solero, at 13500 N.W.

He declined to comment beyond the

statement.

The price achieved on the sale was reasonable and justified given the quality and location of the project, said Brad Cappas, senior director at Cushman & Wakefield.

“The price may seem cutting edge in the current market, but history will prove the buyer made an exceptional buy,” he said.

South Florida Business Journal - by Oscar Pedro Musibay

The deal is also significant because the site was under contract four times in the last five years, with Equity Residential (NYSE: EQR) finally closing.

Given represented Huizenga and brought Equity Residential to the table. Multiple parties had interest in the site, but Equity Residential had the best offer, which is an all-cash deal, said Zachary Sackley, director

10 Reasons To Buy a Home

of operations for the major accounts group at CBRE. The original Sunrise Village plan incorporated 30 acres, with entitlements for 750 units. The current plan for the site allows for 501 units, which could be developed as garden-style apartments.

The site is located at the intersection of Pat Salerno Drive and 136th Avenue in Sunrise. It abuts Minto Group’s Artesia project.

Chicago-based Equity Residential is an S&P 500 company that owns, develops and operates almost 500 apartment properties in top U.S. markets, providing housing to more than 200,000 people.

Neither the Huizenga Group nor Equity Residential returned calls seeking comment.

The Equity Residential deal is just the latest in a string of apartment-related deals CBRE has handled that signal traction in the investment

By BRETT ARENDS Enough with the doom and gloom about homeownership.

Sure, maybe there’s more pain to come in the housing market. But when Time magazine starts running covers that declare “Owning a home may no longer make economic sense,” it’s time to say: Enough is enough. This is what “capitulation” looks like. Everyone has given up.

3. You’ll save on taxes.

You can deduct the mortgage interest from your income taxes. You can deduct your real estate taxes. And you’ll get a tax break on capital gains–if any–when you sell.

Sure, you’ll need to do your math. You’ll only get the income tax break if you itemize your deductions, and many people may be better off taking the standard deduction instead. The breaks are more valuable the more you earn, and the bigger your mortgage. But many people will find that these tax breaks mean owning costs them less, often a lot less, than renting.

sales market, Given said.

Acument Real Estate Advisors recently made its third multifamily housing purchase in Florida in nine months. The Aventura-based company paid $28.5 million for the 208-unit Sunset Gardens in Kendall. Given and the brokerage’s multifamily team represented the buyer.

Sunset Gardens has one-, two- and threebedroom units. Starting rents have been advertised at just over $1,000 for a onebedroom apartment to more than $1,500 for a three-bedroom unit. The amenities include a pool, spa, and tennis and racquetball courts.

In December, Banyan Lake Investors, an affiliate of Acumen, took title of the 288-unit Banyan Lake apartment complex in Boynton Beach through the assumption of an $18.8 million loan.

yields there have plummeted of late. That also makes homeownership look a little better by contrast.

7. It’s risk capital.

No, your home isn’t the stock market and you shouldn’t view it as the way to get rich. But if the economy does surprise us all and start booming, sooner or later real estate prices will head up again, too. One lesson from the last few years is that stocks are incredibly hard for most normal people to own in large quantities–for practical as well as psychological reasons. Equity in a home is another way of linking part of your portfolio to the longterm growth of the economy–if it happens–and still managing to sleep at night.

8. It’s forced savings.

Charles Foschini, vice chairman of South Florida markets for CBRE’s Capital Markets Debt & Equity Finance Institutional Group, said Invesco made a solid investment that will gain in value in the future.

Huizenga Group sells 22-acre residential site in Sunrise

The sale of most of the onetime Sunrise Village site in Sunrise is significant because it signals appetite on the part of a major national apartment player for new development, said Robert Given, the executive VP who heads CB Richard Ellis’ multifamily housing team.

September 15, 2010

Cappas, who sold the land to the developer, said the overall apartment market in South Florida is tightening, especially in Broward County, where rents are expected to climb in the near term.

September 13, 2010

Apartment developer and operator Equity Residential has bought a 22-acre site zoned for 500 units near Sawgrass Mills from Huizenga Group for more than $11 million.

IN

Enough with the doom and gloom about homeownership. Brett Arends explains why owning a home is a good thing.

October 13, 2010

Global investment giant Invesco Real Estate has paid more than $104 million for the 481unit Alexan Solero apartment complex across from IKEA in Plantation, according to a source familiar with the deal.

EEN

If you can rent an apartment for $2,000 month instead of buying one for $2,400 a month, renting may make sense. But will you save that $400 for your future? A lot of people won’t. Most, I dare say. Once again, you have to do your math, but the part of your mortgage payment that goes to principal repayment isn’t a cost. You’re just paying yourself by building equity. As a forced monthly saving, it’s a good discipline.

The Sept. 6 cover of Time magazine: This is what capitulation looks like.

After all, at the peak of the bubble five years ago, Time had a different take. “Home Sweet Home,” declared its cover then, as it celebrated the boom and asked: “Will your house make your rich?”

The June 13, 2005 cover of Time.

4. It’ll be yours.

You can have the kitchen and bathrooms you want.

You can move the walls, build an extension–zoning permitted–or paint everything bright orange. Few landlords are so indulgent; for renters, these types of changes are often impossible. You’ll feel better about 1. You can get a good deal. your own place if you own it than if you rent. Many years Especially if you play hardball. This is a buyer’s market. ago, when I was working for a political campaign in Most of the other buyers have now vanished, as the tax England, I toured a working-class northern town. Mrs. credits on purchases have just expired. We’re four to five Thatcher had just begun selling off public housing to the years into the biggest housing bust in modern history. tenants. “You can tell the ones that have been bought,” And prices have come down a long way– about 30% said my local guide. “They’ve painted the front door. It’s from their peak, according to Standard & Poor’s Casethe first thing people do when they buy.” It was a small Shiller Index, which tracks home prices in 20 big cities. sign that said something big.

Yes, it’s mixed. New York is only down 20%. Arizona has halved. Will prices fall further? Sure, they could. You’ll never catch the bottom. It doesn’t really matter so much 5. You’ll get a better home.

In many parts of the country it can be really hard to find in the long haul. a good rental. All the best places are sold as condos.

Where is fair value? Fund manager Jeremy Grantham at Money talks. Once again, this is a case by case issue: GMO, who predicted the bust with remarkable accuracy, In Miami right now there are so many vacant luxury condos that owners will rent them out for a fraction said two years ago that home prices needed to fall another 17% to reach fair value in relation to household of the cost of owning. But few places are so favored.

Generally speaking, if you want the best home in the incomes. Case-Shiller since then: Down 18%. best neighborhood, you’re better off buying.

But it’s not enough just to be contrarian. So here are 10 reasons why it’s good to buy a home.

2. Mortgages are cheap.

You can get a 30-year loan for around 4.3%. What’s not to like? These are the lowest rates on record. As recently as two years ago they were about 6.3%. That drop slashes your monthly repayment by a fifth. If inflation picks up, you won’t see these mortgage rates again in your lifetime. And if we get deflation, and rates fall further, you can refi.

6. It offers some inflation protection.

No, it’s not perfect. But studies by Professor Karl “Chip” Case (of Case-Shiller), and others, suggest that over the long-term housing has tended to beat inflation by a couple of percentage points a year. That’s valuable inflation insurance, especially if you’re young and raising a family and thinking about the next 30 or 40 years. In the recent past, inflation-protected government bonds, or TIPS, offered an easier form of inflation insurance. But

9. There is a lot to choose from.

There is a glut of homes in most of the country. The National Association of Realtors puts the current inventory at around 4 million homes. That’s below last year’s peak, but well above typical levels, and enough for about a year’s worth of sales. More keeping coming onto the market, too, as the banks slowly unload their inventory of unsold properties. That means great choice, as well as great prices.

10. Sooner or later, the market will clear.

Demand and supply will meet. The population is forecast to grow by more than 100 million people over the next 40 years. That means maybe 40 million new households looking for homes. Meanwhile, this housing glut will work itself out. Many of the homes will be bought. But many more will simply be destroyed–either deliberately, or by inaction. This is already happening. Even two years ago, when I toured the housing slump in western Florida, I saw bankrupt condo developments that were fast becoming derelict. And, finally, a lot of the “glut” simply won’t matter: It’s concentrated in a few areas, like Florida and Nevada. Unless you live there, the glut won’t have any long-term impact on housing supply in your town.

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“The world’s media has spent the past 5 years chronicling the rise and fall of The South Florida condo boom.

The headlines have run away from the facts. Here is the frontline evidence that shows you the reality is much different from the myth”.

- Craig Studnicky, ISG Principal October, 2010

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