A report from the Miami Herald in Florida. "One of Miami’s highest-profile real estate brokerages is engaged in an ugly split, with accusations of substance abuse, mismanagement and runaway expenditures. For 25 years, International Sales Group — ISG — has been known as the sales wizards behind condo projects at Brickell City Centre, Echo Brickell and Muse Residences in Sunny Isles. But earlier this week, the Real Deal reported on a legal fight between principals Philip Spiegelman and Craig Studnicky that began last spring."

"The legal tussle has become Topic No. 1 in Miami real estate circles. At least one observer believes the breakup is a symptom of the cooling luxury market and may be a harbinger of tougher times to come. In May, a corporate entity run by Spiegelman filed a lawsuit to dissolve ISG, claiming that his longtime partner, a Studnicky-run entity called Craig Nicole Inc, 'burned through large amounts of cash collected by ISG on sales without producing any profit.' He accused CNI of running up excessive expenses: 'ISG’s current overhead expenses approximate $2.4 million per year. It should be one-fifth of that.'"

"In June, Studnicky’s firm counter-sued, claiming 'Spiegelman’s waste and dissipation of company assets has caused the company to lose customers, employees, independent agent sales people and corporate opportunities. Spiegelman’s substance abuse problems and his unpredictable anti-social behavior and inebriation caused him to be unable to function in any productive capacity.'"

"Some experts say ISG’s breakup reflects the stress of a real estate cycle entering a downturn. While middle-class neighborhood property values are going up, luxury market values in high-end areas such as Key Biscayne and Sunny Isles Beach are down. 'This is a result of the boom days being over and the distress days coming,' said Peter Zalewski, principal with the Miami real estate consultancy Condo Vultures. 'Warren Buffett always said: ‘A low tide exposes who’s naked.’"

"This type of brokerage breakup sometimes happens during stress periods, he noted. 'But the vitriol between the two speaks to how bad our situation may be.'"

From The Real Deal. "After a more than eight-year run that changed the Magic City’s skyline, Greater Downtown Miami’s condo cycle is likely nearing the end. The Downtown Development Authority’s mid-year report, prepared by Integra Realty Resources, suggests that the cycle is coming to a close as Miami’s urban core has yet to see a new condo project break ground so far this year."

"The average resale prices for condos fell to $392 per square foot from $405 per square foot at the end of 2017 – a sign that per-square-foot prices are returning to 2014 levels. Condo prices will likely continue to fall in the near future on a per-foot basis to about $360 per square foot. 'It’s hard to argue there could be any better time to buy as pricing edges down late cycle,' the report states."

"The number of units under construction in Greater Downtown Miami totaled 3,849 by mid-year 2018, down from nearly 5,000 units at the end of 2017. By the second quarter of this year, there were nearly 28,000 condo units in the pipeline, up 5 percent year-over-year, according to the DDA. The pipeline includes units that are completed, under construction, under contract, reserved and proposed in downtown Miami, Brickell, Arts & Entertainment District, Edgewater, Midtown Miami and Wynwood."

"Anthony 'Tony' Graziano, who authored the report, stresses that this cycle is healthier than the previous one because developers have more equity in their projects. In most condo projects this cycle, developers required buyers put down 50 percent deposits and banks generally required 50 percent presales before providing a construction loan. 'You don’t have any of the big banking risk exposure,' Graziano said."