Property Grunt

Wednesday, April 09, 2008

Roll Call: The Crack Head Bob Edition

Inspired by the following

I see that the NAR has hired Crackhead Bob as their new headline writer, to wit: Existing-Home Sales to Stablize Before Upturn in Second Half of 2008.

In a moment, we will discuss how the NAR managed to get their forecast exactly backwards. Meanwhile, let's look at the actual index:

"The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, slipped 1.9 percent to 84.6 from an upwardly revised reading of 86.2 in January, and was 21.4 percent lower than the February 2007 index of 107.6. “The slip in pending home sales implies we’re not out of the woods yet, though an era of successive deep sales declines appears to be over,” Yun said.

This is the lowest level reported since the index began in 2001. I'm not sure if they are being clueless or willfully deceptive.

I love Barry.

It looks like Bono was able to sell his apartment for $4.9 million dollars, albeit it took him about 2 years to sell.

The Wall Street Journal has a fascinating article on the implosion of the condo hotel market. Not too long ago, the condo hotel was a big deal to the point that even places like Starwood were pushing the condo hotel. A lot of investors are losing big and things are getting rather hairy for developers who have been trying to be “cute” with their buyers.

Here is an excerpt.

Some condo-hotel buyers are happy. But other buyers are suing developers to get out of their contracts, claiming they were misled. In Florida, a group of buyers is suing WCI Communities Inc., claiming the developer sold them condo hotels in the waterfront Resort at Singer Island as unregistered securities. The buyers said they bought the units as investments, not primarily for their own use. WCI said it intends to "vigorously defend" against the lawsuit, according to a recent Securities and Exchange Commission filing.

Other buyers are staging revolts inside high-end hotels. At the Trump International Hotel & Tower in Las Vegas a group of condo-hotel owners are clamoring to rent out their own hotel units using their own operator because they said Trump takes too much of the rental revenue. A Trump spokesman said the company's rental agreements are competitive with other condo-hotel rental-management companies in the area.

In other condo-hotel developments, a few buyers are talking to the SEC, alleging possible securities fraud, according to their attorneys. One issue could be whether developers sold these units as investments, which should have been registered with the SEC or other regulators. In some cases, lawyers said, a real-estate offering may be comparable to a security if the offering creates expectations of profits resulting from the efforts of a third party. An SEC spokesman declined to comment.

Historically, the SEC has suggested it wouldn't take enforcement actions against a condo-hotel developer as long as the company didn't provide prospective buyers with projections of income or expected occupancy, among other conditions.

Many developers were careful not to market condo hotels as investments, but "many others find it difficult to restrain themselves from creating expectation of investment returns and cash flow," said Rob Webb, a senior hospitality partner in the Cleveland office of law firm Baker & Hostetler LLP, which has represented condo-hotel developers in cases where buyers have tried to rescind their contracts. "All you have to do is find the developer's newspaper ads, and it could be a devastating blow."
Some buyers said developers should have registered their condo hotels as securities, which might have allowed them to review a detailed investment prospectus before they bought a unit.

For some buyers, a securities-law claim could provide a way to undo a purchase. "The rights of recovery are so much better if you can say it is a security," said Burton Wiand, a former SEC attorney who now practices at Fowler White Boggs Banker in Tampa, Fla.

If the transaction should have been registered, buyers can rescind the deal and get their money back, without having to prove fraud and misrepresentation, attorneys said.

New York Magazine discusses the challenges of real estate development of Murray Hill. We discover the primary barrier of entry for developers is that, well it's Murray Hill.

And of course no entry is complete without my home girl, Kelly Kreth. Here is what she has going on now.

This is a video I created for my client to show an exclusive development they are selling in East Williamsburg. It got entered into a contest for Century 21 Corporate on innovative use of video to promote RE listings. I produced it and star in it. It has been edited down for the contest.

Here's what you do: click the link. Then click the word VOTE and keep hitting NEXT VIDEO until you see the one posted by: Century21NYMetro Watch it and click the THUMBS UP symbol.

As you know my client has a 1 in 5 shot of winning the $25K price.

Thanks! And feel free to pass onto family, friends, colleagues and random strangers.


You heard the woman. Let’s play Sanjaya.

One last thing. It appears we are really f**ked.

Credit crisis could cost nearly $1 trillion, IMF predicts