FT. LAUDERDALE, FL-Mckafka Development Group (MDG) has sold 23 condominium units at Village East to foreign investors from Argentina, Venezuela, Austria and France. MDG snapped up the 68 remaining units in an $8.7-million bulk acquisition on Feb. 14.
MDG bought the distressed inventory at a deep discount, allowing the firm to offer investors sales prices up to 50% lower than market value before the housing crisis. Specifically, one- and two-bedroom units are selling from between $155,000 and $171,000.
Village East was originally a 264-unit rental building that had been converted to condominiums by its previous owner DEVCO LLC in 2005. The distressed inventory was purchased at a significant discount which has enabled MDG to offer its investors a sales price that is up to 50% lower than the market value before the housing crisis. One- and two-bedroom units available range in size from 794 square feet to 1,054 square feet and are priced between $155,000 and $171,000.
“Foreign national financing options, historically low pricing and highly desirable locations are attracting international buyers from South America and Europe to South Florida,” says Larry Hara, managing partner at MDG. “Financing opportunities that were unavailable since the housing collapse of 2008, especially to foreigners with no US credit record, are now becoming available.”
Miami-based FirstBank Florida is the specialized lender offering homeownership financing for foreign nationals investing in Village East. Hara says the previous lack of financing has been one of the main reasons the real estate crisis greatly deepened and home prices dropped so dramatically.
“When there is no credit available, there are fewer buyers,” Hara says. “Unlike other areas of the US where buyers are primarily local, South Florida has been particularly affected because the region heavily depends on international buyers who typically purchase real estate in cash. With credit now available, we will see an influx in foreign investors capitalizing on current market conditions as seen with the immediate sales success at Village East condominiums.”
Foreign investors are responding to the prices, but also the occupancy. The units Mckafka is selling are all occupied, generating a revenue stream. And Mckafka provides property management services through an affiliate management company.
According to CB Richard Ellis, Broward County is poised to out‐pace the US as well as neighboring Miami‐Dade and Palm Beach counties in job‐growth, rent‐growth and occupancy over the next five years. Broward County is forecasting at 3.1% annual job‐growth, versus the US average of 1.8%. Within the immediate area, rent growth is anticipated to average 3.8% and vacancy is expected to be 3.2% during the next five years.
“Residential investment within Broward County is positioned to benefit from out‐performing market fundamentals and surging demand for quality housing due to shrinking inventory,” says Stephan Gietl, managing partner at MDG. “The lack of supply and continued demand for new product makes Village East a rare and compelling investment opportunity.”
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