Condo King ‘Misjudged The Levels Of Demand’
Two reports on the humbling of a king. “Two years ago Miami developer Jorge Perez said the Las Vegas market was ripe for the high-rise condominiums he has built so successfully in Florida. But Sin City has not been kind to South Florida’s ‘Condo King.’ In January Perez canceled a twin-tower condo called ICON Las Vegas. Now he’s weighing selling the 25 acres on which he, along with actor George Clooney, planned to build a massive, and much-hyped, 11-tower condo project, Las Ramblas.”
“But now Perez says demand is lower than expected and construction costs much higher, in fact, he says, Las Vegas’ condo market has dropped off more sharply than any of his other markets. ‘Did we misjudge the levels of demand and costs in Las Vegas?’ said Perez. ‘The answer is yes.’”
“The hope was Las Vegas would do as well with Asian buyers as South Florida had with Latin Americans. Now some South Florida developers are less sure. Fortune International CEO Edgardo Defortuna considered a Las Vegas project but backed out. ‘The reality is that there are such wonderful, gorgeous hotels at very reasonable prices,’ said Defortuna. ‘Why would you stay in a condo when you can stay in a hotel in the middle of the action and not pay that much price?’”
“For Perez’s part, he says he won’t be looking for more Las Vegas projects, at least for now. Meanwhile, Perez still has dozens of South Florida condos to complete.”
The Sun Sentinel. “Closings are scheduled today at The Prado condominium in downtown West Palm Beach. It’s not soon enough for some buyers. The project was supposed to be ready last year at this time, but three hurricanes in 13 months caused delays, said Barbara Salk, a senior VP for the developer, The Related Group of Florida.”
“The city of West Palm Beach issued The Prado a certificate of occupancy weeks ago, but the building has remained empty because several subcontractors had liens on the property. Don Albaum said he won’t close for weeks. He gave Miami-based Related more than $71,000 as a deposit for his $356,900 condo in March 2004. He said Related told him it would be ready early last year, but he’s still living out of a suitcase in a rented condo in Delray Beach.”
“Related wrote letters informing him of a series of delays but still encouraging him to lock in financing, Albaum said. He lost three mortgage rates and has watched as his current rate has climbed from 5 percent to 6.5 percent. ‘It’s been a total disaster,’ he said. Two other buyers, who asked not to be identified, said they also have been strung along by Related, one of the most active condo developers in downtown West Palm Beach.”
“‘We’ve wanted nothing more than to open this project,’ said Salk, adding that Related’s financial losses because of the delays extend into seven figures.”
‘The reality is that there are such wonderful, gorgeous hotels at very reasonable prices,’ said Defortuna. ‘Why would you stay in a condo when you can stay in a hotel in the middle of the action and not pay that much price?’
Yet billions are gambled ignoring this obvious fact. Aren’t there hotels in Miami?
No wonder this guy is a CEO… I can’t believe he is the first one to think this?!?!
Pitty the fool who bought vacation property in place like Miami where there is miles of near beachfront to develop. That said, condos near employment centers, like Washington Dc, should do very well relative to the national market.
http://www.dcbubble.blogspot.com
Your weekly DC is different comment. Thanks!
Well, that’s kind of bizarre logic. Jobs come and go, but the ocean will always be there, for that matter.
Maybe some of the 1/2 finished condo projects will be turned into hotels when everthing is said and done . I would rather pay $100 to $200 a night for a room than 400 thou. for a condo . In Las Vegas I will only pay 50 buck max.
Or you can get the whole LV weekend for free if you are willing to sit through a timeshare pitch.
Good thought
Or if you like to gamble frequently, “comps” (not comparabable assessments) abound. My wife spent 2 days this week free at Caesar’s due to her friend’s frequenting. Plus $50 of F&B creit!
Make that “CREDIT”.
Condo King ‘Misjudged The Levels Of Demand’—-
yeah, he thought it was infinite.
When 90% of the demand is fake - aka speculators - it would seem easy to Misjudge.
It makes me wonder if these guys are great business men or just happen to be in the right place at the right time and rode the “condo king” wave without little or no knowledge.
That reminds me of all the oil-rich folks in Texas. Grandad had bought the ranch in the 1930’s, but they had somehow had the brilliant idea for gas prices to soar.
“Genius is a rising market” - Galbraith
“Don’t mistake a bull market for brains.”
Interesting am here in Salinas. All the RE’s keep promoting that prices are going up. My wife ran into one of her former employees at Starbucks who quit a $50,000 a year gov job in early 2004 to do RE full time. She said that selling RE used to be fun but that it’s not fun anymore.(in 2004 they sold houses in a day or two with multi-offers). She has 9 listings and hasn’t been able to sell one. She also said that the foreclosure rate is going up. Damn, I wish I had been there to extract more info.
Ijust came back from running a local errand- someone put up about 10 signs along a main road that say: RE Apprentice wanted, $20K/mo, call 1-866-256-7193.
Have fun.
those are all over the place in SLC.
IS THAT A NEW TV SHOW? LMAO
Kenda (Apprentice 3 winner) was interviewed on 1240am this am. Apparently she was part of the SF fiasco with The Donald. She was really promoting RE as a hot investment, especially trying to find you the next hot area. She’s scheduled for more talks down in the LA-OC area soon.
WHO GIVES A RAT’S AZZ!!
They never stop do they ?
in places I don’t talk about, I kinda wished clooney would lose a lot of money.