(Carl Cronan is editor of Real EstateFlorida.)
TAMPA, FL-Strategic Real Estate Advisors says it is forming a $1-billion investment pool to purchase luxury and ultra-luxury distressed condominium units throughout Florida. The London-based firm will focus primarily on beachfront condos in the South Florida and Tampa Bay markets that either are in the foreclosure process or have already been taken over by banks.
Starting this fall, the fund will offer between $300 and $400 per sf for high-end units that had been marketed at triple the price just a few years ago, says Pierre Rolin, founder, chairman and chief executive of StratReal. It will also seek to buy prime redevelopment land with high barriers to entry in similarly distressed situations, he says.
European and Middle Eastern investors are being sought initially to provide funding for the Florida investment pool, taking advantage of both the distressed status of multifamily real estate as well as the weakened value of the US dollar, says Rolin. He spoke with GlobeSt.com by telephone Monday from Madrid, Spain, where he is presenting the proposal to suitable investors.
"They see this as a once-in-a-lifetime cyclical opportunity where the Euro has appreciated to a record high and the Florida prime residential market is crashing," Rolin says. Adding to that is the bankrupt status of several condo owners' associations in Miami's Brickell Avenue corridor, creating a "triple whammy" for Florida real estate, he adds.
StratReal's Miami office, which currently oversees $5 billion worth of real estate, will be in charge of the new Florida fund, Rolin says. The firm has handled more than $9 billion in stateside transactions over the past decade, achieving an average return of 18% annually, he says.
"This is going to be our most significant, most critical vehicle for first-off-the-ground, all-cash buying with large sovereign and private-equity investors," he says. "We're very brave."
Foreign investors have poured at least $3.6 billion into multifamily properties nationwide since early 2007, eclipsing the prior year's total of $2 billion, according to CB Richard Ellis. The weak dollar and favorable overall returns are the biggest drivers for investment in multifamily assets and other forms of US commercial real estate.
"Currently, foreign investors still represent a small segment of multifamily investors in South Florida," says Calum Weaver of CBRE's Multi-Housing Private Client Group in Miami. He notes that overseas investment accounts for less than 5% of multifamily transactions, though he expects the volume of those acquisitions to increase in coming months.
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