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Monthly ArchiveApril 2018

Sign of the times: Masoud Shojaee scraps plans for luxe townhouse project Eleven on Lenox in favor of lower-priced condos

Rendering of Shoma Group’s planned South Beach project and Masoud Shojaee

Responding to the luxury market slowdown, Masoud Shojaee’s Shoma Group is scrapping plans for the multimillion-dollar townhome project Eleven on Lenox in South Beach, The Real Deal has learned. The developer will instead build lower-priced condominiums.

The move marks a reversal to an original idea he had for the site near Lincoln Road a few years ago. He said it was brought on by a tough market, and by buyers demanding discounts on the luxury townhomes, whose prices he had raised from the original preconstruction level.

“The market overall is not ready for $3 or $4 million — it doesn’t matter where it is,” Shojaee said. “You will get a sale here or there on the water for $7 million or $8 million, but it’s very rare at this moment.” He added that “everybody is looking for a bargain. If it’s $4 million they want to pay $3 million. If it’s $3 million, they want to pay $2 million.”

The changeover comes at a hefty cost to Shoma: $1.2 million. Shojaee said he will spend $1 million to tear down and relocate a new sales gallery that was on the site, with the rest to be spent on marketing the new construction. But in the long, it will pay off, he said. “It’s worth it.”

Five of the luxury townhouses had already been pre-sold, and deposits are being returned. Douglas Elliman, which handled sales, will forgo commissions.

Now, instead of primarily focusing on wealthy foreign buyers and Northeasterners, Shojaee said he will target local buyers, as well as EB-5 investors and others who might buy multiple units to rent out. “The price range we have attracts everybody — especially the local people,” he said.

The new, as-yet-unnamed project will have 550-square-foot studios, 756-square-foot one-bedroom units and 1,200-square-foot two-bedroom units. Prices will top out at $795,000 for the two-bedrooms, and will average $750 per square foot.

The building will have a garage on the first floor, with one parking space per unit, and condos on the second and third floors. Units will have 11-foot ceilings and 24 will have porches. Third-floor units will have porches on the rooftop and second-floor units will have them on the first floor. The project will also have a barbecue area on the rooftop and dog park in the back.

Shojaee said sales will start at the end of June or beginning of July. He is negotiating for a new sales office on Alton Road, and Elliman will still handle sales.

Construction is expected to begin in January 2019 with completion expected by the end of the year.

Eleven on Lenox, by contrast, was planned as 11 three-story townhomes, each with four bedrooms, a family room, two-car garage and rooftop deck with a pool and summer kitchen. Shojaee said he had tried raising prices on units from $2.9 million to $3.3 million, and from $3.5 million to $4 million. “The problem was they wanted to pay the original prices and we refused to do that,” he said. He added, “I don’t want to give it away.”

The project is the latest in a series of South Florida developments to be changed, placed on hold, canceled or delayed amid the slowdown in the condo market, as the strong U.S. dollar and foreign economic turmoil continue to dampen sales.

Among others, an investor group led by real estate broker Vivian Dimond bought the H3 Hollywood construction site and decided to market the 247 planned units as rentals instead of condos. Alan Faena placed his Versailles planned condo project on hold and the Related Group canceled Auberge Miami, a planned condo tower just north of downtown Miami.

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D&S Development buys former Sacramento Ballet building for apartment project

The midtown building will be the site of a mid-rise, multiuse project with apartments.

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Longtime CFO of McBride Homes to retire

Michael Arri will retire as chief financial officer of McBride Homes May 24 following 24 years with the company. Arri will continue to serve on the advisory board for McBride Homes, the company said Thursday.

McBride, the region’s largest homebuilder, has named Jeffrey Todt, vice president of accounting and MIS, to CFO effective May 25. Arri will work closely with Todt during the transition. McBride had 2017 revenue of $257.26 million, an increase of nearly 25 percent over 2016.

“I am grateful…

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Photos: Al Capone’s former Miami Beach home lists for $15M

Al Capone’s former Miami Beach home has been fully renovated — no bullet holes present — and listed for $14.9 million.

The waterfront home at 93 Palm Ave. was built on the 30,000-square-foot lot in 1922 and bought by Capone for $40,000 in 1928. The notorious Chicago gangster, known as “Scarface,” served in prison for tax evasion from 1931 to 1939, and then returned to his heavily-guarded Miami Beach home.

Capone died of a stroke in the home in 1947. His widow sold the house in 1952.


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Opendoor: What's keeping Phoenix homeowners from buying or selling their homes

Selling your home can be exhausting — so much so that some would rather get a root canal, colonoscopy or struck by lightning, according to an Opendoor survey of 1,000 Phoenix homeowners.

Those responses aren’t all from newbies to the home-selling game: 23 percent surveyed have sold at least three homes in their lifetime, while 30 percent still live in the first home they purchased. Of those surveyed, 47 percent said they won’t get a good price for their current home, while 39 percent said they…

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Mountain View officials’ push for affordability spurs proposal for nearly 450 housing units near downtown

A revised plan for the development nearly doubles the housing units to 447 by raising some buildings from the originally planned four stories to seven and included options for 53 to 67 “affordable” units compared to the 40 in the original concept.

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Exclusive: 591-foot Oakland waterfront proposal would be city's tallest tower

The 500-unit housing project would exceed the current tallest building by nearly 200 feet.

Source: http://feeds.bizjournals.com/industry_21

Black applicants twice as likely as whites to get denied for mortgage loans: study

(Credit: Wonderlane via Flickr)

A stark racial disparity still exists when it comes to receiving mortgage loans.

Although overall mortgage applications are getting denied at their lowest rate in the past 20 years, black applicants are still twice as likely as white applicants to get denied for a conventional loan, according to a new study from Zillow.

The overall share of applicants denied for conventional mortgages has dropped to 9.8 percent, a sharp decrease from its 18.1 percent rate in 2007. However, as of 2016, just 8.1 percent of white applicants were denied for a conventional loan, whereas 20.9 percent of black applicants were, the Zillow study found. Asian applicants were denied 10.4 percent of the time, and Hispanic applicants were denied 15.5 percent of the time.

The racial gap was even starker in New York, where white borrowers had an 8.8 percent denial rate, and black borrowers had a 22.2 percent denial rate, according to the study. It was not quite as harsh in Los Angeles, where whites had a 9.6 percent denial rate and blacks had a 15 percent denial rate. In Chicago, the difference was 7.1 percent to 19.9 percent, and in Miami, it was 13.3 percent to 25 percent.

Borrowers in suburban areas were the most likely to get approved for a mortgage across the board with an 8.4 percent denial rate, compared to a 10 percent denial rate for urban residents and an 11.5 percent denial rate for rural residents.

The disparity is also evident in homeownership, where the gap between white and black rates was higher in 2016 than it was in 1900. Black homebuyers last year could afford 55 percent of homes for sale, while white homebuyers could afford about 78 percent of them. Blacks were also more likely than any other race to cite qualifying for a mortgage as a problem for coming up with a downpayment on a house, according to the study.

“By some measures, the gap in mortgage approval rates between whites and blacks is as narrow as it has ever been,” Zillow senior economist Aaron Terrazas said. “However, black mortgage applicants are still more than twice as likely as whites to be denied, a visible legacy of historical discriminatory policies.”

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Exclusive: Luxury multifamily project to break ground in downtown Houston

The property will include studio, one bedroom and two bedroom units.

Source: http://feeds.bizjournals.com/industry_21

The defeat of Scott Wiener's housing and transit bill is just the first shot in a long war

Meanwhile, it’s important to recognize how SB 827 in its short life moved the terms of the debate. The need for an urgent housebuilding revolution adding up to millions of units statewide has moved into the mainstream, adopted by all major candidates for governor.

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