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We Definitely Feel The Market Has Peaked

A report from the Wall Street Journal. “After a banner year, many small businesses are becoming more cautious about their investment and hiring plans. In parts of the country, real-estate markets seem less robust. Latitude 38 Housing Services, which provides housing to students, technology workers and others seeking co-living spaces in the San Francisco area, is looking to pay down several million dollars of debt. It may sell one building to raise cash and is being more cautious about acquisitions and renovations.”

“‘We definitely feel the market has peaked,’ said Tony Brettkelly, chief executive of the 18-person company.”

“To play it safe, Webfoot’s co-founders, Travis Ulrich and Gavin Hepp, didn’t take any quarterly distributions or annual bonuses for 2018. The company has stepped up marketing but is shopping for less costly software, and has done away with monthly crew and office team lunches, a $2,000 expense, Mr. Ulrich said.”

“‘It’s batten down the hatches; hold on to your cash,’ he said. ‘We are scared, but we are not playing scared. We are playing super-conservative with our cash.'”

From Real Estate Business Online on Texas. “Multifamily properties have produced strong returns for commercial developers and investors over the past few years. But the apartment supply wave appears to have crested, suggesting 2019 will bring a slower pace of rent growth. Consequently, pricing levels should come down, cap rates should creep upward and returns on investment should cool.”

“‘We are bumping along the top of the market,’ said one anonymous developer. ‘Interest rates will likely push asset prices down. Strong growth in Texas will counterbalance that. Multifamily product in DFW will be in oversupply and rents will soften.'”

From Bisnow on Texas. “So far, demographics still support more senior housing development in the Metroplex. But in the not-too-distant future, an excess of supply might outpace demand, especially at the upper end, according to a speaker at Bisnow’s upcoming Dallas Senior Housing event. ‘Overall, there could be an overbuilding scenario, since there’s currently a rush to build,’ Buckner International CEO Albert Reyes said. ‘When’s the tipping point? I don’t know when that will come. No one knows.'”

From Real Estate Weekly on New York. “Meridian Capital Group arranged $68 million in financing for the Vitre condominium tower in New York, NY on behalf of Wonderworks Construction and their partners. The 24-month condo inventory loan is secured by this 48-unit development and was provided by a balance sheet lender and features full-term interest-only payments.”

“Located at 302 East 96th Street in Manhattan’s Upper East Side neighborhood, the luxury Vitre condominium tower stands 21 stories tall and boasts a modern glass façade. The property consists of 48 one- to three-bedroom residences featuring amenities such as floor-to-ceiling windows, private terraces, white oak flooring, and state-of-the-art appliances, in addition to community benefits including a residents’ lounge, rooftop deck, concierge service, parking and 24-hour attended lobby.”

The Wall Street Journal on New York. “What does a record-breaking $238 million penthouse sale on Billionaires’ Row in Manhattan say about the state of the New York luxury market? Not much, says broker Kirk Henckels of Stribling & Associates, who sees few signs of recovery this year in the slumbering high-end condo market.”

“The poor sales trend underscores the disparity between the ‘super wealthy and the merely wealthy,’ Mr. Henckels said in the report. The super wealthy are setting auction records for jewelry and artwork while buying up real estate at record prices, but other buyers are hesitating. ‘The rest of the luxury market seems to be struggling with the degree of uncertainty in the current world,’ he said in the report.”

“Garrett Derderian, director of data and reporting at Stribling, said the good news for buyers is that condo developers are willing to negotiate, with discounts last year averaging between 9% and 10% below list price for luxury sales below $30 million, and rising to 23% for units selling for $50 million or more.”

From WKRC on Florida. “Construction of America’s first Jetsons-style Flying Cars SkyPort is nearing completion atop the 60th floor SkyDeck of Paramount Miami Worldcenter — the world’s most heavily-amenitized residential tower. The nation’s second-largest real estate development and Florida’s biggest building project is billed as ‘America’s City-within-the-City-of-The Future.'”

“‘Ever since The Jetsons animated TV cartoon aired in the mid-1960’s, the world has been talking about flying cars,’ says Daniel Kodsi, Paramount Miami Worldcenter’s CEO-Developer. ‘We have built the 60th floor SkyDeck pool, so its floor will rise; draining all water; and will self-convert into a take-off and landing pad.'”

“There are 524 units. Twenty-six are penthouses. One-bedroom high-rise homes start in the mid-$700,000’s. Penthouses range in price from $4-million to more than $10-million. All units have 10-foot ceilings and outdoor living rooms.”

“Kodsi explains, ‘Via a glass-enclosed elevator, passengers will be lifted to Paramount’s SkyLobby from where they will take-off and land at its SkyPort high above downtown Miami.’ He continues, ‘People can actually fly home; land on the roof and, instead of entering and exiting through a ground floor lobby, they can access their homes from the top of the building.'”

“‘The technology exists today,’ says Kodsi. ‘We are just a few years away from the first flights, which could start in the 2020’s, depending on regulatory issues. Meanwhile we are building for the future now. This type of transportation is inevitable and we, at Paramount Miami Worldcenter, want to remain ahead of the competition that is why we are building the SkyDeck so it can serve as a take-off and landing pad.'”

This Post Has 20 Comments
  1. ‘Latitude 38 Housing Services, which provides housing to students, technology workers and others seeking co-living spaces in the San Francisco area, is looking to pay down several million dollars of debt. It may sell one building to raise cash and is being more cautious about acquisitions and renovations’

    It’s gonna be another twitter.

  2. ‘So far, demographics still support more senior housing development in the Metroplex. But in the not-too-distant future, an excess of supply might outpace demand, especially at the upper end’

    Again with the luxury. It doesn’t matter what type of airbox they are building, it’s super luxury stuff no one asked for nor needs. Why? They paid too much for the land and that’s the only way to make a profit – which they won’t.

  3. ‘Ever since The Jetsons animated TV cartoon aired in the mid-1960’s, the world has been talking about flying cars…We have built the 60th floor SkyDeck pool, so its floor will rise; draining all water; and will self-convert into a take-off and landing pad’

    It’s probably safe to assume there’s still a lot of cocaine in Miami.

    1. The Empire State building, in the 1930s, was designed and built for Zeppelins to dock and load/unload passengers.

      Never really worked out.

      1. IIRC it was about this time, the Thirties, that some sort of gigantic gorilla was seen climbing all over the Empire State Building.

  4. “It’s probably safe to assume there’s still a lot of cocaine in Miami.”

    I’m thinking there might be a lot of imported Magic Mushrooms.

    Go here …

    “Everything You Need To Know About Psilocybin Mushrooms (Shrooms)”
    https://thethirdwave.co/psychedelics/shrooms/#personal-growth

    (snip)

    “In early trials where hallucinogens were given to healthy adults under supportive conditions, many participants reported lasting beneficial changes in their personality, their behavior, and their values and attitudes. Anecdotal reports in lieu of systematic studies have since corroborated these initial findings as people often report a greater appreciation of music, art, and nature along with greater tolerance for others and increased creativity and imagination for quite some time after a mushroom trip.

    “More recent studies have also mirrored these early findings. About 40% of participants in several laboratory studies of psilocybin reported positive, long-term changes in aesthetic experience and their relationship with nature.”

    “Another study in 2011 found that for up to more than a year after a single experience with psilocybin mushrooms, personality measures of openness remained significantly elevated in study participants. These researchers speculate that the mystical experience …”

    “Mystical experience”. Think: flying cars.

    “… often imparted by a mushroom trip is likely the key even that instigates such enduring changes.

    “They define a mystical experience as ‘feelings of unity and interconnectedness with all people and things, a sense of sacredness, feelings of peace and joy, a sense of transcending normal time and space, ineffability, and an intuitive belief that the experience is a source of objective truth about the nature of reality.’

    “Interestingly, the more intense the mystical experiences a person reports on a psilocybin trip, the greater the positive, long-term changes they see.

    “These subjective effects — such as feelings of interconnectedness — of psilocybin mushrooms are likely a result of their ability to decrease the interconnectivity of integration hubs in the brain. That is, psilocybin allows for more ‘cross talk’ between brain regions that is typically kept separate, which, researchers speculate, enables a state of ‘unconstrained cognition.’ Many of the same brain activity patterns are also observed during various states of meditation as well.

    “Recent research has shown that psilocybin can be effectively used to enhance spiritual practice – the large study recruited 75 participants, and engaged them on a 6-month long spiritual course involving meditation, awareness and self-reflection. During the course, participants were given either a low or high dose of psilocybin. At the end of the six months, the participants given the high dose of psilocybin showed significantly greater improvements in measures of spirituality such as interpersonal closeness, life meaning, death transcendence and forgiveness.”

    Hmmmmmm … perhaps I should think of slipping some of this stuff into the free coffee I serve to my marks, er, customers.

    1. Denver is leading the charge to decriminalize the use of Psilocybin. The city also is at the forefront of opening Ketamine infusion clinics for the treatment of severe, drug-resistant depression, anxiety, and PTSD. Given the psychological toll the bursting housing bubble is going to take on FBs and realtors, these clinics will be doing a booming business for years to come.

      1. Can’t speak to magic mushrooms, but the ketamine research I have read does seem promising, much more than many of the benzodiazapines in treating depression.

    2. high dose of psilocybin showed significantly greater improvements in measures of spirituality such as interpersonal closeness, life meaning, death transcendence and forgiveness.”

      You laugh allot at anything for hours then feel werid. IMO a typical exagerration article. but it was along long time ago.

      1. dropped 30%

        During the bubble the average home size tripled. Those bubble houses are white elephants now. Price and size are both going to crash.

  5. “passengers will be lifted to Paramount’s SkyLobby from where they will take-off and land at its SkyPort”

    I think I read about this in Brave New World.

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