Florida Condo Project Taps Pent-up Demand
- Mar 29, 2010
March 29, 2010
By Dees Stribling, Contributing Editor
If the experience of a recent non-foreclosure residential property auction in Florida is an indication, there’s pent-up demand for properties out there, at least for well-located and even upscale properties. The trick is figuring out a way to tap the demand in spite of hesitation among buyers who have the wherewithal to buy.
Earlier this month, a (relatively) new condo project in St. Petersburg, Fla., managed to sell off 51 units at auction for $199,000 to $742,000, which in some cases was as much as a 50 percent discount off the original asking price. But it’s been quite a while since anyone has gotten asking price for residential properties in Florida, so the lender on the 242-unit Signature Place, Fifth Third Bank, wanted an auction. Previously, about 100 units had sold.
Not only did the auction generate immediate sales, it seems to have inspired about 30 more sales in the weeks after it was held. “You can’t use a rolling launch now, because that only works in a market seeing continuous appreciation, which we haven’t seen in a while,” Jon Gollinger, co-founder and east coast CEO of Boston-based Accelerated Marketing Partners, which arranged the auction for the bank, told CPE. “And you can’t use conventional marketing in a case like this, because it’s too slow.”
Best Buy Sells More Gizmos Than Ever
It seems that electronics retail giant Best Buy Co. Inc. has indeed benefited from the demise of Circuit City last year. That, or perhaps electronics has reached some kind of tipping point in terms of being an indispensable part of many consumers’ lives, especially consumers in China.
In any case, earnings for the company were $1.82 per share during the fourth quarter of 2009 (ended February 27), up 13 percent compared with the same period in 2008. Comparable-store sales, always an important retail metric, gained 1.7 percent in the United States year-over-year. Even more tellingly, Best Buy China scored a whopping 34 percent comp-store sales increase during the same period.
“[The trends] tell me that staying connected has become a non-negotiable for millions of people and that some of the things we offer no longer fall under the category of discretionary purchases,” posited CEO Brian Dunn during the company’s quarterly conference call late last week. “And each additional mobile phone, notebook computer and television gives us an opportunity to introduce customers to the world of connectivity.”
Europeans Facing $209B CRE Debt Problem
Plenty of U.S. institutions are behind the eight ball when it comes to commercial real estate debt, but they are hardly alone in that regard, according to a recent report by DTZ Holdings Plc, a London-based real estate advisory. Some 156 euros ($209 billion) worth of commercial real estate will needed to be refinanced before the end of 2011 under the reports “pessimistic” scenario.
A lot of that refinancing isn’t going to be there. The worst of the problem will be in the UK and Spain, noted DTZ. British CRE has about 36 percent of the shortfall, or 42 billion euros, while Spain has 20 percent and France 11 percent.
Wall Street ended mixed on Friday. The Dow Jones Industrial Average finished the day up 9.15 points, or 0.08 percent, while the S&P 500 advanced 0.07 percent. The Nasdaq ended down 0.1 percent.