Ed Pascoe made the winning $4 million bid at auction for the Altos de Miami project.

 

One of the first local developers to execute a takeover of a new fractured Miami condo development is a Miami-based antiques dealer and property owner.

Miami real estate meltdown is added a new twist by Ed Pascoe’s profile in which many with the ability to sign a loan added condominium developer to their resume.

But Pascoe is the owner of Miami-based Pascoe & Co. antiques. He did not want to risk the remaining 56 units in the 134-unit 17-story condominium in Miami’s Little Havana neighborhood, Altos de Miami. http://www.bestmiamilofts.com/BML/_Altos_De_Miami.html

Pascoe joined with an experienced broker from Douglas Elliman, Brian Carter, and the investor who lost out to Pascoe on the Altos de Miami auction to resurrect the building, made the winning $4 million bid at auction for the units on February 24.

Investor Arnaud Karsenti is now managing Pascoe’s properties. He said that the lender had begun foreclosing on the project, a process that stalled because of that company’s collapse.

“[The lender] blowing up allowed us to get to the point where we could buy at a great price,” Karsenti said.

With units priced at an average of $135 a square foot, sales were to begin July 1, Units range in size from 784 to 1,852 square feet. Carter said they have yet to close a sale but have interested cash buyers.

They are also leasing units at Altos de Miami and have signed 10 contracts so far. The rent range from $900 to $1,800 a month. They are targeting nurses, fireman, police and other professionals, who work at or near Jackson Memorial Hospital.

Karsenti said the challenge is in finding a balance between unit sales and leasing.

“If you rent them all, you can’t sell them,” he said. Altos’ new ownership is seeking FHA approval for loans.

Pascoe isn’t stopping with Altos de Miami, which is located on Flagler Street and Northwest 22ndAvenue.

He wants to build more Miami condos such as a 190-unit condominium called Altos Point on a full-acre lot he owns on Southwest 22nd Avenue and Fourth Street. The permit from the city of Miami for the 19-story building has already been obtained.

Florida Governor Charlie Crist recently signed a bill that extends the life of a building permit by two years, giving Pascoe some time to let the economy work itself out. Until then, the project is on hold, he said.

Pascoe said he has sought financing for the project but as of yet has had no solid interest.

Condos selling at deep discounts

A principal of Condo Vultures Realty, Peter Zalewski, which tracks and brokers bulk Miami condos deals, recently released a report that documented the deep discounts condominium sellers are offering to close deals. The 900 residences that closed sales in the first five months of 2009 sold at a 54% discount from their asking price. The result is a drop from the 44% price cuts owners took in 2008 and 29% reductions in 2007.

Zalewski said the discounts vary according to market, with more popular neighborhoods like Miami Beach and Miami condos on Brickell Avenue seeing less of a price cut.

But Little Havana is not a hot spot for prospective condo buyers, he said, and resale value is an important trigger for purchases.

“Units on Brickell are trading at about $190 and $210 a square foot,” said Zalewski, who analyzed Altos for bulk investors looking to buy into the building. “The square footage on Brickell is going to be smaller, but people are willing to accept smaller square footage and a slightly higher price because the resale value at Altos del Miami can be very challenging.”

Zalewksi added that Altos’ target group is not going to be inclined to pay $150,000 for a condominium when single-family homes in the same neighborhood are being marketed at $200,000.

“They are way too expensive,” he said. “If Altos del Miami was closer to $90 to $110 a square foot, there might be a strong market.”

Altos’ Carter argued that the purchase analysis is based on the wrong psychology.

“The people looking to own in this area are people who do not want to live on Brickell,” he said. “They live in the neighborhood and want to upgrade to a better product. Others want to be closer to this area,” because they work nearby.

 

 

 

 

 

 

 

Contributed by MLR Realty