Florida Real Estate Lawyers BlogLadies & Gentlemen, we have already arrived at the second week of May, which can only mean two things:
1. The Miami Marlins are almost out of the playoff hunt (already); and
Articles Posted in Real Estate Deals & Transactions
Market Report – Residential Condo Market in Miami, South Florida – March 2017
The Miami Downtown Development Authority’s Annual Residential Market Study Update for the Greater Downtown Miami area, prepared by Integra Realty Resources (IRR), came out in early February, and is full of interesting/useful information. In this post we will discuss a few of the attention-grabbing tidbits from the Miami Downtown Development Authority (MDDA) report, and begin to address how some of these developments are going to affect you as buyers/sellers here in the Miami area.
According to the Senior Managing Director for IRR, Anthony M. Graziano, and Market Research Analyst, Dan Bowen, a big picture view on the state of the market should recognize that while inventory is up, there is no distress in the market. New pre-construction deliveries closed out successfully in 2016, demonstrating buyer confidence.
Resale pricing retreated modestly (6% – 7%), reflecting both a correction after five consecutive years of growth, as well as a stronger US Dollar, resulting in nominal price increases for most foreign buyers, according to the MDDA report.
With regard to condo delivery, the report notes that the greater downtown Miami area saw the largest volume of delivery (2,202 units delivered in 2016) since 2008, although it was also noted that this figure is mostly in line with the expected 11-year and 15-year cycle of absorption.
Real Estate Consulting Model – Commission Rebate Program
By: Alejandro E. Jordan, Esq.
As you know, in today’s real estate market, everything that is listed on the multiple listing services is available to be seen on hundreds of duplicated websites at no cost to you. Independent surveys state that over 95% of buyers search the Internet to find a home. Virtually no one surveyed said their agent found them a home that they had not seen on the Internet or by driving around. If you are one of the over 95% of the buyers out there doing their own homework, we figure why not pay you for your efforts so that you save money on your transaction closing costs.
Serving the Next Generation of First-Time Home Buyers
Today, Millennials (even Gen X and Gen Y) prefer to research information online or through their friends. Our clients are savvy home buyers. They’re involved in their search and know what they want. They don’t need an agent to look on the Internet for new listings. There are plenty of online tools they can use for that. They don’t need an agent to drive them all over town every weekend. And, they certainly don’t want to pay a full commission just to close the deal. Buyers want someone who is on their side and who is hired to represent their interests.
How does the Real Estate Consulting Model Work?
Due Diligence on Commercial Real Estate in Miami – Safety, Risk Management and Environmental Considerations
By: Alejandro E. Jordan, Esq.
Due Diligence on Commercial Real Estate Transaction in Miami, South Florida
Safety, risk management, and environmental due diligence before a commercial real estate transaction is becoming more complex. Here are some guidelines for performing due diligence on a commercial real estate transaction involving an existing structure.
Safety Assessment:
- Is the building ADA compliant? If not, is there a current remediation plan in place?
- Safety inspection of elevators?
- Fire system adequate and inspected? Documented fire safety protocols?
- Have there been any lawsuits or complaints filed, even if dismissed, regarding safety or access issues?
FAQs – 1031 Exchanges (Tax Deferred Exchanges) for Commercial Real Estate
By: Alejandro E. Jordan, JD
Frequently Asked Questions (FAQs) – 1031 Exchanges (Tax Deferred Exchanges) for Commercial Real Estate
Question 1: What is the difference between a sale and an exchange?
Answer 1: A sale is an exchange of real property for cash. An exchange is a transfer of property for other like-kind property – a “non-taxable” sale.
Question 2: What provisions are required in a Purchase and Sale Agreement to enter into an exchange?
Answer 2: A Purchase and Sale Agreement should contain language establishing the exchangor’s intent and notifying the buyer of the exchange. Examples are:
When Selling:
“It is the intent of the Seller to perform an IRC Section 1031 tax deferred exchange by trading the property herein with [_________________]. Buyer agrees to execute an Assignment Agreement at the request of Seller at no additional cost or liability to Buyer.”
When Buying:
“It is the intent of the Buyer to perform an IRC Section 1031 tax deferred exchange by trading the property herein with [_________________]. Seller agrees to execute an Assignment Agreement at the request of Buyer at no additional cost or liability to Seller.”
Question 3: Can an investor trade from several small properties into one large one?
Investing in NNN Triple Net Leased Commercial Real Estate Properties
By: Alejandro E. Jordan, JD
Investing in NNN Triple Net Leased Commercial Real Estate Properties
Not all real estate investors are created equal. A large number of them simply are looking to place their hard-earned money into a safe haven to avoid the often unpredictable nature of the financial market. In a nutshell, based on how the leases are drafted, NNN leased investments state that the tenants are responsible for paying rent plus the operating expenses of the building such as taxes, insurance, repairs and utilities. A true passive investment for the owner/landlord.
These NNN (Triple Net Leased) investments are valued using a combination of factors, such as the tenant’s credit, the length of the lease and rent escalations over the term, and, last but not least, the real estate itself.
“NNN leased properties survive the ups and downs of the markets. As an investor, you know your lease is guaranteed long term, often with rental escalations worked into the leases, meaning the investor will be receiving a steady income, regardless of how the outside forces are performing,” says Enrique Jordan, Investment Sales Associate with NAI Miami, Commercial Real Estate Services Worldwide. Continue Reading ›
What are the Risks of Purchasing a Tax Deed in Florida?
By: Daniel T. Pascale, Esq.
Offices located in Delray Beach and Coral Gables, FL
It’s important to know that when you purchase a tax deed in Florida, that the title to the property is not immediately insurable and is not considered legally marketable. In fact, if a tax deed has been of record for fewer than 20 years, subsequent purchasers, lenders, and title insurers will not consider the title marketable and will require the tax deed holder to obtain a judgment quieting title in the holder before relying on the tax title. Thus, tax deed properties that are acquired without further legal action are essentially worthless unless you plan to rent or live in the property for the next twenty years before selling it.
Quiet Title Actions
Tax deed purchasers who don’t wish to wait 20 years to sell their newly acquired property must file a quiet title action to obtain marketable, insurable title. The purpose of a quiet title action is to forever bar prior owners, mortgage and lien holders from asserting any interest in the real property.
Because a quiet title action stops redemption periods and eliminates potential claims of lien, once the quiet title action is complete and the 30-day appeal period expires, you’ll be able to sell the property, offer marketable, insurable title to a prospective purchaser or obtain title insurance for yourself. In short, a successful quiet title action will allow a title insurance company to write a policy insuring title to the property.
Commercial Real Estate – Terms & Definitions
By: Alejandro E. Jordan, Esq.
Commercial Real Estate – Terms & Definitions
Availability Rate: The ratio of available space to total rentable space, calculated by dividing the total available square feet by the total rentable square feet.
Available Space: The total amount of space that is currently being marketed as available for lease in a given time period. It includes any space that is available, regardless of whether the space is vacant, occupied, available for sublease, or available at a future date.
Build-to-Suit: A term describing a particular property, developed specifically for a certain tenant to occupy, with structural features, systems, or improvement work designed specifically for the needs of that tenant. A build-to-suit can be leased or owned by the tenant. In a leased build-to-suit, a tenant will usually have a long term lease on the space.
Buyer: The individual, group, company, or entity that has purchased a commercial real estate asset.
Cap Rate: Short for capitalization rate. The Cap Rate is a calculation that reflects the relationship between one year’s net operating income and the current market value of a particular property. The Cap Rate is calculated by dividing the annual net operating income by the sales price (or asking sales price).
CBD: Abbreviation for Central Business District. (See also: Central Business District)
Central Business District: The designations of Central Business District (CBD) and Suburban refer to a particular geographic area within a metropolitan statistical area (MSA) describing the level of real estate development found there. The CBD is characterized by a high density, well organized core within the largest city of a given MSA. Continue Reading ›
1st Quarter 2014 Industrial Market Report for Miami-Dade County CRE
By: Alejandro E. Jordan, Esq.
Total Industrial inventory in the Miami-Dade County market area amounted to 229,374,658 square feet in 8,790 buildings as of the end of the second quarter 2014. The Flex sector consisted of 16,908,307 square feet in 600 projects. The Warehouse sector consisted of 212,466,351 square feet in 8,190 buildings. Within the Industrial market there were 782 owner-occupied buildings accounting for 30,523,593 square feet of Industrial space.
Sales Activity
Miami-Dade County industrial sales figures for industrial building sales of over 15,000 square feet fell during the first quarter 2014 in terms of dollar volume compared to the fourth quarter of 2013.
Raising Money through Real Estate Syndications – Recent Law Changes to the Rule 506 Exemption
By: Alejandro E. Jordan, Esq.
The Jumpstart Our Business Startups Act, known as the Jobs Act, has changed the way to raise money from groups of investors to purchase commercial and investment real estate properties. Many forget that raising money from multiple investors is often viewed as selling “securities” and are regulated and restricted under the federal securities laws.
What Changed?
In its July 10, 2013, meeting, the Securities and Exchange Commission adopted the new Regulation D, Rule 506(c) as authorized by the Jobs Act (Title II), which became effective September 23, 2013. Under the new rule, persons such as issuers, sponsors, syndicators, or promoters selling “securities” to private investors to fund their companies or real estate transactions will be able to advertise their private-investment opportunities under certain conditions.