They Both Served Chicken - One Ignored the Elephant

Earlier this week I had my first intimate dinner with 1399 of my friends at the Harbourside Event Center in downtown Fort Myers and last night I ate with another thousand or so people at The Ritz in Naples. They both served chicken. But the similarities stopped there. The first was a "for profit" venture - The Market Watch - a presentation given by Frank D'Alessandro and Denny Grimes about market conditions here in Lee County. The second was a fund raising event with syndicated talk show host Neal Boortz as the guest speaker and the main topic was The Fair Tax.
First let me mention The Market Watch. My son Christopher and I were hosted by Christina Boyhan of First Horizon Construction Lending. First Horizon had reserved two tables for clients and friends and the always charming Christina even had to juggle some overflow to other tables. The speakers addressed sold out crowds and discussed both the commercial (Frank) and residential markets (Denny). Frank spoke first and his conclusion on commercial was absolutely brilliant (In other words I agreed with him).
Commercial is where to put our money now. Vacancy rates on commercial properties remain at unprecedented lows and construction and development activity is high. Rents are increasing in response to very tight supply.
Denny had a more sobering picture to paint on the residential market and while he is as optimistic as I am in the fundamentals of the market, a severe over-supply of inventory has caused an apparent softening of the market. His charts did show demand only slightly decreasing on the resale market but supplies are souring. Unfortunately he is unable to track new inventory and sales unless they are on the MLS. This is, in my opinion, a big hole in the data. You can read a review of the meeting that was in the News Press here (http://www.news-press.com/apps/pbcs.dll/article?AID=/20060222/RE/602220443/1014/BUSINESS)
The remarkable thing to me was the elephant in the room that was ignored. What was not talked about at the meeting, at least by the presenters - is the downtown high rise market and downtown development in general. Here developer inventory will far outpace absorption in the mid term future. Beau Rivage, the first project completed, is still very far from being absorbed by users and if all the proposed projects get to the construction stage, there will be even more competition for end users.
In my opinion, now is not the time to get into preconstruction residential buying unless you are buying for your end use or you plan on holding at least two years after closing. Now IS the time to look for deals - and we have them, by the way. Now it is more important that ever to buy smart. I also suggest buying projects that are already out of the ground.
Next to The Ritz. The event was Quest 2006, a three event series as a fund raiser for Quest. (http://www.questforkids.org/). We had the pleasure of a pre-dinner drinks and conversation with Neal and his wife, Donna . Boortz is a Libertarian talk show host that has been on a campaign lately for The Fair Tax. (http://www.fairtax.org/). He gave a very convincing presentation for about 45 minutes after dinner about why we should go to the federal consumption tax . I was convinced enough take home a signed copy of his new book. I started it last night. I suggest you check out the web site link above.
Oh, back to the chicken. The information and networking were unsurpassed at Harborside, and I commented to Gail when I got home that I was impressed that my pastry wrapped chicken that we were served, while rather cool, was probably nourishing. But nobody does Ritz like Ritz does Ritz. The 1000 or so bejeweled guests were elegantly presented a hot and exquisite meal that bore no resemblance whatso ever to the chicken in Fort Myers ( or the price, by the way) But the absolute most memorable item of the meal was the edible real gold decoration on my key lime tort. Listen to Boortz on Monday morning. I am certain it will get mentioned. ( By the way, I ate mine)
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Now to business. I have many opportunities to discuss.
The Citadel (http://investinwaterfront.com/citadelpa3.shtml)We have some big changes in the project. The entire exterior is being renovated. Chemical treatment and cleaning of the roofs, all new paint, and a general sprucing up of the grounds. I was there this week and the west building is done. It looks brand new to me.
The developer has two good opportunities here. The first is that he is releasing two condos at $225,000. These are available until renovation is complete. Closing must be within 30 days.
The second opportunity is that the developer is offering four Citadel units with a lease-back at $1500 per month. This is an 18 month lease with sale prices at $269,000. My suggestion to investors or end users here: Buy a condo for $269,000. The developer will lease it from you for 18 months at $1500/mo. With the proper down payment and financing (We can help you there) these units will cash flow. You will have leveraged yourself into a condo close to the beach. In 18 months you can either move in, rent it, or sell it. Contact me to discuss your strategy here.
I have been telling you about office condo investing. I now can offer you two opportunities right here in South Fort Myers. Stand alone office buildings on Brantley Road off of Summerlin from $600,000 and up. This is so new for us that we have no web site yet for it. Ground breaking has begun and sold buildings will be completed before the end of the year. I rate these as an excellent buy. The strategy here is to buy for leasing (not flip). You can buy for as low as $237/sf. Ideal for medical, by the way. Email me at gregg@ma-realty.com. Signs are not even up yet and six of the eighteen buildings are sold.
The second opportunity is Cyperlin Center (www.cyperlincenter.com) This will be the premier building in Fort Myers. Call me to discuss. By the way, the website is up now, please take a look at Christopher’s work. I think he has done an excellent job of getting my message on the opportunity out. If you live in luxury, you should work in it. Take a look at www.CyperlinCenter.com. If you buy preconstruction, we will handle leasing for you. I do not suggest this as a flip, but a buy, hold and lease.
____________________________________I get many questions about condo hotel investing. I have never done it., but I have said that I think is a wonderful deal for the developer, but not so good for you. There was an EXCELLENT article in today’s Wall Street Journal. I can't provide you a link, but if you are even thinking about this get a copy of today's WSJ (February 25th). The conclusion? The purchase may be good if you want to use it, but probably not good as an investment. Resale history is not good. If you do buy, treat it as if you were selecting a hotel. In other words, get near the attractions (the beach, the restaurants, the airport etc.).
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Market America Realty and Investments, Inc. is growing. Look for an announcement next week of three more additions to our professional staff.
By the way, I am very proud of what we have done with Market America Realty and Investments and I want to remember to thank all our service providers, our customers and our suppliers.
We are a company with a vision. To me, that vision is very clear. It is our primary goal to serve our clients, not our pocketbooks. We are relationship builders, not just short term problem solvers. Whether you are a residential buyer or an investor, after meeting with you we should be able to tell you:
"This is where you are heading, let us show you the way".
As a buyer you have many opportunities and many alternatives. The large inventory of homes, condos and investment possibilities makes decisions even harder. You need an experienced professional that understands your objectives and your needs. Let us help you figure out where you are heading and let us help you get there. Email Tatiana@ma-realty.com and ask her to put you in touch with one of our professionals.
Thanks you for your business and thanks for your comments.
GreggGregg@ma-realty.com