Starwood Capital Group unveils plans to upgrade, sell in 4 years its 2,000-plus condos
By Yudislaidy Fernandez
Starwood Capital Group has unveiled its long-awaited plan to sell the remaining condos in its South Florida portfolio: an aggressive marketing strategy to find buyers for the 2,000-plus local units it aims to sell in three to four years, Starwood officials say.
ST Miami, established as a management firm for Starwood's local assets, is also injecting millions in capital to make needed improvements to its eight high-rise condominiums in South Florida, most in Miami-Dade.
Victor Ballestas, regional managing director of ST Miami, said the company initially thought it would take five or more years to sell its local condo inventory but the jump in condo sales this year has boosted its optimism.
"We've been fortunate recently that the market has improved because there are more buyers out there," he said.
Starwood Capital has a billion-dollar portfolio of 15 properties throughout Florida totaling about 3,500 units, Mr. Ballestas said.
It includes eight condominium developments in the tri-county area: Mint at Riverfront, Infinity at Brickell and Jade Ocean are all in Brickell; Paramount Bay in the Omni area; Artech in Aventura; Artecity in Miami Beach; Tao in Sunrise, and Dolcevita in Palm Beach Shores.
With fewer new condos for sale in the market, Starwood, which controls about 23% of the total inventory in the region, is competing locally with The Related Group's three-tower Icon Brickell, CMC Group's Epic Residences downtown and Africa Israel Investments' Marquis Residences near Omni.
"The stability of our group versus other groups that may be in more distress," Mr. Ballestas said, should help generate more sales. "Although we haven't finished with the improvements, they (the buyers) are seeing we are adding value to these properties. That value is going to be passed on to the homeowners."
Starwood Capital, headed by Barry Sternlicht, along with TPG Capital, Perry Capital and WLR LeFrak, acquired in October 2009 the $4.5 billion portfolio of construction loans and real estate assets formerly owned by Corus Bank. They bought the portfolio from the Federal Deposit Insurance Corp., which seized the Chicago-based bank in September 2009.
To attract buyers, the company is rolling out a well-capitalized marketing campaign to reach locals and internationals, primarily from Latin America, said Peggy Fucci, senior vice president and director of sales and marketing for ST Residential, Starwood's nationwide asset management company.
International trade shows, golf tournaments and charity events are planned to sell the condos internationally, Ms. Fucci said. Locally, the company is banking on aggressive marketing, which is to include advertising and VIP events, to gain the attention of brokers and buyers.
"We want to make sure the properties have the right message," she said. "We want to make sure the teams know how to pitch who we are and the backing all these properties have."
Starwood also has a financing program in the works to help qualifying buyers obtain home loans, she said, but details aren't yet known.
At some residential towers, Starwood is hiring a third-party realty firm to handle sales. In others, it is working directly with the original developer to sell remaining units.
"We are partnering up with existing developers, in other cases taking back the asset, improving the asset to the level they were meant to be and trying to sell them back to the retail market," Mr. Ballestas said.
At 530-unit Mint, the global investment firm is working directly with Key International, developer of two of the three residential towers on Southwest Third Street in downtown Miami.
Inigo Ardid, principal of Key, is handling the sales in-house, working first to close on pre-sale contracts, for which prospective buyers put down 20% deposits. Then, remaining units are to be listed for sale.
At the 459-unit Infinity at Brickell, the developer and lender have brought aboard a local realty firm to attract buyers, with an emphasis on reaching internationals.
DYL Development Group, headed John Yanopoulos, and Starwood Capital have retained Miami-based Fortune International Realty to sell remaining units, most priced from $200,000 to $400,000.
In a strategy Mr. Ballestas calls "reverse-value engineering," the firm is also investing in each property to enhance its value.
For example, Starwood is pumping about $15 million into the Mint building, Mr. Ardid has said, to add the landscaping, make needed upgrades and cover operating costs.
ST Miami is currently working out of an office in Coral Gables, Ms. Fucci said, but plans to open a main office at Infinity at Brickell in January to be closer to its assets.