naples

Most Expensive Home In The US Goes On Sale For $295 Million

The most expensive home for sale in the US has officially hit the market at a listing price of $295 million. The property is called Gordon Pointe, and is located in Naples, Florida, on the Gulf Coast within an enclave known as Port Royal. The property is also about 9-acres. 

The main house on the property is about 11,500 square feet with six bedrooms and the property has two other guest houses that are each over 5,000 square feet, making the combined total interior about 22,800 square feet. 

The three homes are located on a peninsula that has 1,650 foot waterfront with a private yacht basin and dock. 

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Co-listing agent Leighton Candler of Corcoran told CNBC that the value of the property isn’t based on the size of the three homes, but the privacy, beach frontage, and an opportunity for further significant development. 

“The property can accommodate more than 200,000 square feet of residential development, meaning the land has a ton of untapped potential,” according to the property’s press release.

“There can be eight waterfront homes on this property,” Candler added. 

The nine acres of land are made of contiguous lots. The first lot was initially purchased in 1985 by John and Rhodora Donahue. After the purchase of the first lot, the Donahues continued to buy up more and more of the peninsula until they owned the entire thing. 

Through these purchases, the Donahue’s created an exclusive, gated compound that’s almost entirely surrounded by water with a single private drive to avoid traffic. 

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“It gives you all the benefits of being on an island, but on Gordon Pointe your family can be secluded without feeling isolated,” Candler said.

Candler described that the T-shaped dock can accommodate six boats, and the Donahues constructed a private yacht basin that’s 231 feet by 50 feet and has a depth of almost 8 feet, something Candler says is a rare amenity that had to receive special approval by the US Army Corps of Engineers. 

The average listing price for properties in Port Royal is $24.1 million. Before Gordon Pointe, the highest-paid price for a home in Port Royal was for $45 million. 

“We did our best to price [Gordon Pointe] and we can defend that price all day long,” co-listing agent Dawn McKenna of Coldwell Banker Realty told CNBC.

McKenna also stated that the listing is already drawing significant interest since it first went live last Wednesday, and she’s booked eight in-person visits with prequalified buyers.

for sale

45% Of Real Estate Agents Claim They’re Struggling To Pay Rent 

According to a monthly report from Alignable, 45% of real estate agents who own their firms stated that they’re struggling to pay their offices rent in the month of November. This is a 5% increase from October, and 10% higher than September’s data, citing a consistent increase. 

This data aligns with the attitudes of US homeowners as of late, as many who are wanting to move are currently waiting for the market to improve and constant high housing costs to decrease. Overall inventory for homes on sale is also the lowest it’s been in a very long time. 

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Corey Burr, the senior vice president at TTR Sotheby’s International Realty, stated that these recent reports aren’t actually surprising. He discussed how recent interest rate hikes have been driving up mortgage rates and bringing home sales to a lull. 

“I think that the Federal Reserve has put us in this spot where they essentially froze up the residential real estate market by holding interest rates low for so long, and then increasing them so much so quickly. It’s created incredible distortions in our marketplace.” Burr says.

Burr also discussed that he’s been in the real estate industry for over 36 years, so he’s very experienced in following the ups and downs of the real estate market when you own a small business. 

“We are in a spot in the real estate cycle that is hardest for brokerages, particularly the smaller ones who have less market share, and who have fewer assets than the larger brokerages to ride out the storm,” Burr says.

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Prospective buyers are paying close attention to the market as well. High mortgage rates combined with an increase in buyers backing out of deals have led to a major decline in sales. 

Last month, pending home sales were down by 1.5% from September and 8.5% from last year, which is the lowest pending-sales figures according to the National Association of Realtors. 

Burr also mentioned that he expects the amount of realtors to decline across North America as the market continues to struggle, citing that over 60,000 agents left the industry in the first six months of the year. 

Some real estate data analysts are predicting that mortgage rates should decline within the next year. The National Association of Realtors economist Lawrence Yun predicted in early November that mortgage rates could reach between 6% to 7% by next spring and home sales could increase by 13.5% in 2024.

bed bath beyond

Empty Bed Bath & Beyond Stores Are Hot Commercial Real Estate Opportunities

Commercial real estate retailers are seeing a major rise in available spaces due to the influx of empty Bed Bath & Beyond stores. 

When superstore retailers go out of business, other companies have the chance to take over the space for a faster turnaround due to its larger size. For example, Burlington Stores CEO Micheal O’Sullivan stated that some of their best stores were created “from carved-up Kmart or Sears locations.”

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Burlington has also already taken over 44 former Bed Bath & Beyond locations. According to CNN, this is the first holiday season in more than 50 years where there won’t be any physical Bed Bath & Beyond stores. The chain went out of business earlier this year, and closed its last 360 stores in what’s been referred to as the largest retail bankruptcies in years; 120 buybuy BABYs also closed down.

Overstock.com bought the Bed Bath & Beyond brand and transitioned it to relaunch exclusively online. The relaunch also included the famous 20% off coupons from the former retail giant. 

As the hundreds of empty Bed Bath & Beyond stores are continuously being auctioned off, the industry has realized how valuable these spaces are for real estate opportunities. 

According to CNN, Burlington, Michaels, Barnes & Noble, Macy’s, Homegoods, and many other chains have already replaced old Bed Bath & Beyond stores. Some of the vacant spaces have even been taken over by recreational services such as pickleball courts, bowling alleys, and trampoline parks. 

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While the retail industry itself has been slowing down as of late, the vacant Bed Bath & Beyond locations are a hot ticket item for retailers and other developers due to an overall lack of big box store spaces to move into. In fact, there hasn’t been a major increase in new retail spaces since the financial crisis in 2008, CNN reports, especially with the rise in online shopping. 

“Bed Bath & Beyond spaces have been grabbed up swiftly at rents of up to 50% what Bed Bath & Beyond was paying. Landlords are taking advantage of the vacancies, with some dividing former Bed Bath spaces into smaller sizes,” said Brandon Isner, CBRE’s head of retail research for the Americas.

“There is little to no concern that any of the spaces will go vacant for long,” he said.

Kimco Realty, a real estate owner with 26 former Bed Bath & Beyond leases, said that “new leases were 38% higher than Bed Bath & Beyond rents.” 

“We have a very strong real estate team that has a lot of experience dealing with retail bankruptcies,” Burlington CEO Michael O’Sullivan said. “Many of our most successful and productive stores today were once upon a time Circuit City, Toys R Us, Sports Authority, Linens ’N Things.”

sale

What’s Happening With Governor DeSantis’ Ban On Chinese Homeownership In Florida?

In May, Republican Governor Ron DeSantis of Florida signed a bipartisan law, SB 264, which banned certain Chinese nationals from buying property within the state as a means of avoiding “the malign influence of the Chinese Communist Party in the state of Florida.” 

According to reports from NBC, a group of Chinese immigrants that are backed by the American Civil Liberties Union and additional civil rights groups, have been working to invalidate the new law, and the Justice Department even backed their effort in an official court filing this summer. The Justice Department stated that the law is unconstitutional, however, a judge ruled against that challenge back in August and settled with an appeal. 

Many workers within the real estate industry have stated their disdain for the law, claiming that it’s ambiguous and is fueling a major risk for discrimination against Chinese buyers. According to the law, sellers who violate the restrictions knowingly could face up to $1,000 in fines and one year in prison while Chinese nationals who buy property in Florida face up to 5 years in prison and even higher fines. 

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Khalid Muneer of the Greater Orlando chapter of the Asian American Realtors Association recently spoke to the media regarding the discriminations and difficulties this law created. 

“Are we supposed to be FBI agents investigating people and asking them all kinds of questions?”

A veteran Florida real estate agent, Frank Lin, told the media that his business has been cut in half due to the fact that he has to turn down clients to comply with the law. 

Additionally, Chinese nationals who already own property in Florida “are required by the new law to register with the state’s Commerce Department, but they don’t even have a form yet or place or website, so that’s confusing everyone. Failure to register by 2024 could trigger fines of up to $1,000 a day,” Lin said

According to a Florida Commerce Department spokesperson, “a hearing is set for this week over a proposed rule on the registration requirement, the agency is dedicated to implementing SB 264 as outlined in law.” 

Muneer spoke further on the discriminations that this law has created and the potential hostility it could create. 

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“If somebody comes in and is Asian-looking, you’re automatically going to start asking questions about where you’re from, which never used to happen.”

Many Asian American community members are viewing the Florida law as resembling xenophobic “alien land laws” of the early 20th century, which were later deemed unconstitutional. 

The restrictions of the law cover both commercial and residential properties and apply to all Chinese nationals who aren’t US citizens or permanent residents and/or already owning property in China. 

“If somebody comes in and is Asian-looking, you’re automatically going to start asking questions about where you’re from, which never used to happen,” said Khalid Muneer, founder of Jupiter Properties in Central Florida and president of the Greater Orlando chapter of the Asian American Realtors Association.

“Is this racism? Is this stereotyping? We are very well aware of the fact that we can have issues. We can be accused of discrimination. Some of [my] associates with heavily Chinese or Venezuelan clientele have seen a major, major drop in business,” Muneer said.

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In recent months, some of the realtors are afraid to deal with [Chinese nationals] because they are looking at getting prosecuted for ‘not doing their job.’ But then again, are we supposed to be FBI agents investigating people and asking them all kinds of questions?” Muneer continued

“The law is upending peoples’ lives.”

Florida in general receives about 23% of all foreign buyers throughout the US, the highest percentage of any state, according to the National Association of Realtors. 

NBC reported that five percent of Florida’s closed sales were to foreign buyers, according to a separate report from Florida Realtors. However, the bulk of Florida’s foreign buyers are Latin American, at 46%, and Canadian, at 24%. Among Chinese buyers, California is the most popular destination, drawing 33% of Chinese buyers to Florida’s 16%.”

“When you get a situation like this, where your main cash buyers are not allowed to buy, it does start hurting the market as well as sales agents who will depend on those sales for their living,” Muneer stated. 

Gregory Burge, an economist, said “ownership bans like Florida’s don’t make a lot of sense from an economic standpoint. Top talent coming from these nations would certainly involve families wanting to retain their citizenship in their home countries, and then facing the barrier of buying in Florida under the new law,” he said. “That could act as a negative factor for slowing economic growth.”

construction

NYC Architects Are Adding More Floors To Skyscrapers To Convert Empty Offices Into Apartments 

New York City real estate is still recovering from the shifts in work from home culture that increased during the pandemic. This shift left many commercial real estate properties vacant. Now, architects and developers are converting these empty office spaces into housing. 

According to Business Insider Magazine, real estate development and investment firm the Vanbarton Group and architecture firm Gensler are currently finishing up a 1970s office tower on Water Street in lower Manhattan to become 586 apartments. 

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For most of the estimated 96 million-square-feet of vacant office spaces in New York City, it would be too expensive, or illegal, to turn into housing, however, in some cases it’s very doable. 

One of the biggest challenges is the lack of air flow and light in the center of many of the larger commercial spaces, as well as a lack of windows available for apartments, which could lead to pricey renovations. 

For the projects on Water Street, Vanbarton described that they needed to cut holes in the center of buildings, add new floors, and replace all of the windows to make the spaces livable. 

“There was essentially dead space at the back of these units, and so instead of adding that to the unit and creating these extremely long units, we took that out and then put it elsewhere in the building where it made much more sense,” Joey Chilelli, Vanbarton’s managing director, told Insider.

“The blind shafts were “probably the biggest planning challenge in the project. We couldn’t just wall it off and leave the floor slab. We had to physically remove the floor slabs so that it became a true shaft,” Robert Fuller, a principal at Gensler who led the design of 160 Water, said.

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Insider also reported that the team placed lateral reinforcements within the building to support the new floors they built. 

“The alternate to that would have been to reduce the size of the overbuild, but then you’re losing square footage. Most developers are not looking to lose square footage if they can avoid it. So it’s a cost-benefit analysis that the client has to do during design,” Fuller said. 

Fuller went on to discuss the potential opportunities in the financial district and midtown Manhattan for future developments like the one on Water Street. 

“Any good designer embraces that challenge, trying to come up with creative solutions. At first blush it would be easy to look at a building like 160 and say, ‘Oh, it doesn’t work. The floor plate is too deep.’ But we were able to come up with a solution,” he said.

“It really does breathe new life into these buildings. You’re creating this buzz and this new life, and you might have 1,000 or more residents and the effects of that on this street, this corner, this neighborhood and the amount of foot traffic as well as other retail activity — it really boosts the area and changes the streetscape,” Chilelli said.

development

Real Estate Developer Evergrande’s Bankruptcy Could Lead To Housing Crisis In China 

Evergrande was known for decades as one of China’s most successful real estate developers, however, as China’s economy struggled within the past few years, the developer acquired debt, leading to their bankruptcy in the US. 

The demand for housing in China was so strong that builders would pre-sell apartment units before they completed construction. Shifts in policies in China within the last two years have also left property developers without a lot of money, leading to a lot of risky financial decisions. 

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In 2021, the central government tried to curb excessive borrowing to slow the rise of home prices, which led to the removal of funding for property developers. Evergrande acquired $300 billion in liabilities, which it wasn’t able to pay, leading to market panic. 

Building and construction was then suspended for dozens of projects, leading to many buyers who pre-purchased housing with no new home and a mountain of debt. 

Evergrande filed for Chapter 15 bankruptcy last Thursday, which is a way for foreign companies to utilize US bankruptcy laws to restructure their debt, which takes time and Evergrande has around $19 billion in offshore debts.

The next step for the developer will be to restructure those billions of dollars in offshore debts which could have a major impact on the financial system in China. 

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Other large builders and developers in China have also been struggling to cope with the now low demand for housing.

China’s property and housing market accounts for around 30% of the nation’s economic activity, as well as two-thirds of general household wealth. 

The “zero Covid” strategy in China has also hindered its economic growth, leaving many potential buyers skeptical when it comes to buying new homes and investing in real estate in general. Unemployment levels are also on the rise while property values fall. 

Beijing has worked to increase demand for housing and provide cash for developers in need, however, it’s not nearly enough, and state-funded bailouts seem to be on a massive decline in general. 

“We must maintain historic patience and insist on making steady, step-by-step progress,” President Xi Jinping said in a recent speech.

homes

The Netherlands Introduces Restrictions On Investors, Making Homeownership More Accessible 

Some of the Netherlands largest cities have introduced restrictions on investors from renting out the real estate they buy as certain neighborhood populations change, increasing rent while house prices remain the same. 

As a means of making homeownership more accessible for middle-income households, the “Opkoopbescherming” (purchase protection) law strongly discourages investors from buying real estate, and states that any property with a value below a cap set by municipalities can’t be leased for four years after its purchase. 

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More than a year after this policy started, housing prices have yet to drop while rent prices are increasing with a smaller supply available. 

One of the main reasons the law was passed in the first place is because concerns were growing about investors driving up the real estate market by out-pricing home-buyers, and decreasing the livability in neighborhoods because tenants are more likely to stay for shorter periods of time.

According to Statistics Netherlands, house prices in the Netherlands have been regularly increasing, and prices of Dutch real estate grew by 13.4% in 2022, adding to a 15% growth from 2021. 

While the policy was drawn up at a national level, it’s up to municipalities to decide whether to implement the law. All Dutch cities with more than 200,000 residents introduced the investment-restriction policy in 2022. 

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The study regarding this law overall found that residents in the Netherlands would have a higher chance of buying homes in areas where real estate investors were not included. Nationwide, around 2,000 homes were sold to buyers, which otherwise would have been sold to investors. 

The research on the new law also showed, however, the absence of real estate investors hasn’t impacted rising home prices, meaning their investments may not contribute to price rises. 

According to Newsendip, Matthijs Korevaar, Assistant Professor at the Erasmus School of Economics, said that “investors usually have a more solid financial background – larger borrowing capacity, no resolutive conditions, etc. – which can give them an advantage in front of sellers compared to household buyers who need a high mortgage. Investors would pay similar prices but have better chances of buying a house thanks to their finances.”

The study also suggested that the ban on investors in certain areas has more so impacted the populations of a given neighborhood, as renters are normally younger, and homebuyers in the area are more often older and wealthier. 

pride house

LGBTQ+ Real Estate Alliance Celebrates Pride Month 

The LGBTQ+ Real Estate Alliance is celebrating 2023 Pride Month with a wide variety of events, meant to educate the community on home owning opportunities, as well as showcase the community within the real estate industry.

On June 8th and the 29th, the Alliance is offering two sessions on their Alliance Certified Ally course. Led by director of education Alex Cruz, the sessions are meant to help participants learn about the LGBTQ+ community and how to better interact with, and find properties for, individuals in the community. 

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The course is meant to give professionals a deeper understanding of the struggles and discriminations members of the community face, and how they can be the best ally in terms of real estate. 

“Pride Month is incredibly important to the LGBTQ+ community, and so much of what occurs this month comes from the allies who care about us,” said Erin Morrison, national president and chair of the board of the LGBTQ+ Real Estate Alliance. 

“This month around the globe, millions will attend parades and events, and in most cases experience a genuine outpouring of love and support. Pride Month also allows the LGBTQ+ community to reflect on how far we have come in societal acceptance,” she explained. 

“But the reality of today’s environment, where there are more than 700 anti-LGBTQ+ bills being discussed, voted on or passed in statehouses around the nation, we are reminded of the fight we are still engaged in for basic civil rights.”

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“It’s also critically important for all of us in real estate to remember that sexual orientation and gender identity are still not protected classes under the 1968 Fair Housing Act leaving the LGBTQ+ community susceptible to housing discrimination,” Morrison concluded. 

Another event on June 22nd will showcase “LGBTQ+ Leaders in Real Estate. According to RIS Media, “Farrah Wilder, an Alliance member and former vice president of Diversity, Equity and Inclusion for California REALTORS®, will host the program, which allows LGBTQ+ people in real estate to share their perspectives and experiences as ‘out’ leaders in the industry. Guests include: 

Tommie Wehrle, chair of Anywhere LGBTQ+ ERG group and Alliance National Treasurer, Jennifer Green, director of DEI for Mortgage Investor’s Group. Ryan Adams, VP of government affairs for Birmingham REALTORS, and Cody Gilkeson, head of DEI for eXp Realty.”

To learn more about the multitude of events the Alliance is holding, and to register for any of them, check out their official Pride Month event calendar!

decentraland

Virtual Real Estate In The Metaverse Is Declining In Value 

Decentraland is known as one of the most prominent virtual real estate platforms in the metaverse. While it was once valued at $1 billion, revenues have been on a major decline within the past year, according to reports from The Block

Only a handful of users have reportedly been trading virtual real estate in Decentraland. The real estate traded can be transacted in the form of NFTs for users. 

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According to the reports from The Block, only about 20 to 30 people are actively buying and selling property weekley on the platform; valued at about $50,000. This marks a massive decline when compared to the millions of trades being made between 2021 and 2022. 

This decline shows a major lack of interest in owning virtual real estate, and the metaverse in general. 

While Decentraland had a billion-dollar market cap originally, reports from data collector DappRadar showed that only 38 active users were present over a 24 hour period on the platform. Other platforms within the metaverse have had the same level of struggles within the past year. 

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According to The Block, Decentraland also saw a decline in their Fashion Week event. Last year, over 60 brands sponsored the virtual fashion event with over 100,000 users showing up. This year, however, only about 26,000 users attended the event. 

According to a gaming report from Jay Peters, “the world didn’t feel very alive. While walking around, I’d usually only see one or two other people in my vicinity.”

Hunter Swihart, a metaverse architect, told The Block that he wouldn’t be surprised if Decentraland would completely go under as a business in the near future.

“Everybody saw prices skyrocketing with big businesses buying land for millions of dollars, which now in retrospect was a terrible mistake.”

This decline in interest in virtual real estate shows that users are losing interest in spending their money within a virtual world, and the metaverse in general is losing hold of its audience.

commercial

Economists Worried About The Current State Of Commercial Real Estate 

Economists are currently worried about the state of the $20 trillion commercial real estate industry. Ever since the beginning of the Covid-19 pandemic, office and retail property values have fallen due to lower occupancy rates, and the shift to working from home and rise in online retail. 

According to Goldman Sachs economists, about 80% of all bank loans for commercial properties are coming from regional banks; smaller banks have had more pressure to liquidate properties as time goes on and the properties don’t show a lot of interest. 

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“I do think you will see banks pull back on commercial real estate commitments more rapidly in a world [where] they’re more focused on liquidity, and I do think that is going to be something that will be important to watch over the coming months and quarters,”  wrote Goldman Sachs Research’s Richard Ramsden, reported by CNN.

Xander Snyder is a senior commercial real estate economist at First American who recently spoke to the media about the current state of the commercial real estate market and its potential threats to the economy. 

“Price growth is slowing and for some asset classes it’s starting to decline. Office properties have been more challenged than others for obvious reasons.”

“Now private lending to the industry is starting to slow as well — bank lending was beginning to dry up over a month before the Silicon Valley Bank failure even happened. Credit was getting scarce for all commercial real estate and a fresh bank failure on top of that only exacerbates that trend,” Snyder explained. 

“A lot of people hear commercial real estate and they think it’s all the same thing and the trends are they’re all the same but they’re not. The underlying fundamentals of multifamily and industrial assets remain relatively stable on a national level.”

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Snyder then explained exactly why commercial real estate ended up in the position it’s in today after the trends it saw within the past few years: 

“As credit becomes scarcer and more expensive, it’s hard to know exactly what buildings are worth. You get this gap opening up between sellers and buyers: Sellers want to get late 2021 prices and buyers are saying ‘we don’t know what things are worth so we’ll give you this lowball offer.’ That was already happening and the result of that price differential was bringing deal activity down.

It’s different for office and retail properties. There’s been a fundamental shift in how we use office space and that has changed demand. That’s something you should have your eye on, especially as low-interest office loans come due.

We’re running into a situation where office-owners have to refinance at a higher rate and only 50% of the building is being used. That doesn’t translate to good cash flow metrics for the lender,” he explained. 

According to The National Association for Business Economists’ (NABE) most recent survey, published this Monday, a majority of economists are predicting a recession to occur this year as inflation rates will likely remain above 4%.

“Panelists generally agree on the outlook for inflation and the consequences of rate hikes from the Federal Reserve. More than seven in ten panelists believe that growth in the consumer price index (CPI) will remain above 4% through the end of 2023, and more than two-thirds are not confident that the Fed will be able to bring inflation down to its 2% goal within the next two years without inducing a recession,” said NABE Policy Survey Chair Mervin Jebaraj.