The short answer is, yes.

Should a delay occur, knowing what your clients legal rights and obligations are can help ease the stress on all involved.

Occasional closing disruptions caused by tropical storms and hurricanes include:

• Disruption of travel plans
• Availability of homeowners insurance
• Availability of needed approvals
• Pre-closing repairs
• Mortgage loan underwriting
• Closing services
• Unforseen property damage after the storm

Most Florida residential real estate contracts provide relief for these issues, including an automatic extension of 5 - 7 days if a “casualty” (e.g. fire, flood, extreme weather, or force majeure) prevents the buyer from obtaining insurance on the property at a reasonable rate or causes “services essential for closing” to be unavailable.

If the disruption continues 30 days after the “casualty”, either buyer or seller may terminate the contract.

A FARBAR Sales Contract-As Is (Residential Improved Property) form grants the exception only when the buyer is unable to get insurance due to extreme weather.

Once a hurricane or storm enters a certain proximity to the area, there might be a pause on issuing an insurance policy for a loan. If there is no insurance, a loan can’t close.

Most willing buyers and sellers usually agree to delay a closing rather than starting all over again.

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​            The Miami Tower, famous for contributing to the third tallest skyline in the country and partaking in countless culturally iconic pop media, has been sold to the Boca-Raton-based CP Group for just $163.5 million. That is $56.5 million less than what it went for six years ago. Though Miami’s office rent growth is the strongest in the country, Miami Tower’s vacancy was nearly thirty percent. Yet, just a mile south, the 1221 Brickell Class A Tower sold for $286.5 million, marking a record for South Florida office deals since 2016. Why is there a seemingly stark difference between Brickell and Downtown?

            The answer, in short, is amenities. Between a global pandemic, record inflation with the Federal Reserve aiming to increase rates further, and the looming prospect of a recession, you’d expect an economic downturn. However, it appears that Miami’s lack of city and state tax, international allure, and geographical advantages is attracting investors. The trendy Brickell district has a corporate but modern vibrancy with no shortage of restaurants, retail, nightclubs, and other hot spots for young urban professionals. Brickell has proven to be the core of Miami’s banking, investment, and financial sector with rent increasing on an average of 13.7% annually.

            Brickell’s explosion into prominence is proving the CBRE’s Spring 2022 Occupier Sentiment Survey correct, where they revealed that most companies are back to developing long-term plans to expand or contract their office space now that employees are returning after nearly two years of mostly remote work. To avoid the high rent of Brickell, some companies are looking to relocate to Class A buildings Downtown. This is part of CP Group’s plan.

            In March, The CP Group bought the Bank of America Plaza in Atlanta and sunk an extra $50 million in renovating the lobby, adding a high-end restaurant, and adding other amenities to attract employees back to their desks. The CP Group has been very active as it also bought The Las Olas Square in Downtown Fort Lauderdale for $144.5 million.

            It’d be negligent not to mention that the annual rent growth in Miami and Fort Lauderdale are 16.9% and 16%. These two Florida cities are only behind Orlando which leads the nation in annual rent growth at a whopping 18.6% which is over eight percent higher than the national average. These figures have led to a new trend amongst investors and developers of repurposing aging offices and hotels into affordable housing for workers. In Orlando, we are seeing investors such as T2 and California-based Vivo Living buying hotels that have lost business due to the expansion of Disney’s value-category hotel rooms, converting the building into a unit property that contains studio apartments for rent under $1,000 per month. Similarly, The Estate Companies recently completed a hotel conversion in Hialeah, converting the old Ramada Inn across Westland Mall into 245 luxury studios and six one-bedrooms. According to representatives at the newly constructed Alture Westland, they are already at 98% occupancy with units costing roughly around $1,800 monthly.
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With all the continued activity in the market, it appears that the old adage ‘time in the market is better than timing the market’ holds true. Buy now, as the commercial real estate in major Florida cities, including Miami, is only on the rise.

Email us with your thoughts on commercial real estate in Florida, we'd love to get talking about how we can help you close on your next transaction.

Keep the conversation going. Share your thoughts on social media and tag us @sunlifetitle. 

Investor sentiment remains strong in South Florida. With record leasing volumes and consistent year-over-year rent growth, the market is still a hot spot for investment opportunities.

The trendy locations of Lincoln Road and Brickell have proven to be attractive to many businesses. Kaseya, the software company, has leased over 65,000 square feet within the last year. Other notable companies include Marsh Insurance, with 23,000 square feet leased, and Industrious Coworking, which leased 40,000 square feet.

Miami’s leasing activity has totaled more than 1.4 million square feet in the first quarter of 2022, making it the fourth straight quarter where leasing volume eclipsed the one million square feet mark. Currently, South Florida only has 900,000 square feet of sublet space which is less than 1% of Miami’s overall inventory. The office inventory listed for sublet nationally is just over 2%. In part, deal volume decreased during the early months of this year; however, that may be subject to change.

Recently, two development groups won initial approval from the city of Miami Beach to build office spaces in two city-owned parking lots on Lincoln Road. Combined, the two groups are looking to build 210,000 square feet of office space. Despite the additional supply, Miami’s strong leasing activity and rent growth should maintain as the demand for properties in South Florida remains high.

Watermark, a real estate investment trust, recently sold a twenty-five-hotel portfolio in an all-cash transaction of $3.8 billion to Brookfield Asset Management. Two of the hotels were the Ritz-Carlton of Fort Lauderdale and Key Biscayne. Early in May, a twelve-acre storage facility outside of Norland was sold to CenterPoint Properties for $47.5 million. The same property was bought in 2019 by Drake Real Estate Partners for just $12.5 million, further highlighting this combustible market. Not to mention, Miami’s office rent is 10% above where it was in 2020 at the start of the pandemic.

South Florida’s year-over-year 6% office rent growth leads the nation by nearly double. The closest to this figure would be Phoenix and Orlando with 3.4% and Tampa with 3%. With the expected jump in transactions due to increased supply, many experts believe that these numbers and the current investment market should maintain its strength for the foreseeable future.

Sources:
https://product.costar.com/home/news/shared/1507163206 https://product.costar.com/home/news/shared/14705873 https://product.costar.com/home/news/shared/15294341 https://product.costar.com/home/news/shared/1564033123

The national housing market index (HMI) has dropped once again, making this the fourth consecutive month that builders’ confidence has decreased in the U.S. The decline started from December where the index has slowly decreased from 84 to 79. NAHB Chief Economist, Robert Dietz, has stated that the “impact of elevated inflation and expected higher interest rates suggests caution for the second half of 2022.” However, the same may not be said for the state of Florida.

The NAHB Wells Fargo Housing Market Index asks builders to rate housing market conditions based on their experiences. The builders rate their sales expectations from “good” to “poor,” and rate traffic of prospective buyers from “very high” to “very low.” These responses are then placed into a formula to produce an index. About 400 responses are obtained each month.

Why should we listen to this survey? Builders, with their experience and close contact with local market conditions, provide information about current housing market conditions and how home sales are likely to behave in the future. This is why Wall Street firms, the Federal Reserve, and other government officials have used the HMI over the past few years.

The HMI has contributed this hesitancy to the increase in price of lumber and other building materials. Lumber prices have increased dramatically since 2020, going from $242.80 to $1,193.00 per thousand board feet. This has driven construction costs up by 20% over the span of 12 months. There is also an expectation for higher interest rates as the year progresses. With all this in mind, we can see why builders’ confidence has continued to decrease nearly everywhere in the United States except Florida.

We have seen approved construction sites in North Miami, a Broward trailer park marked for redevelopment, and new sales for an oceanfront condo in Miami Beach just this month alone. Let’s not forget about the multi-million, lavish Florida condo on top of the Tiffany & Co. in Palm Beach. Four of the six largest hotel markets in the U.S. since 2019 consist of Jacksonville, Miami, Tampa, and Ft. Lauderdale. Despite the pandemic, Florida’s population growth of 360,758 between April 1, 2020 and April 1,2021 was the strongest annual increase since 2005-2006. Between 2021 and 2025, Florida’s growth is forecasted to average 1.41%.
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All in all, with the population increase and steady tourism markets, Florida homebuilders should be optimistic as buyer demand remains solid.

 International Women's Day celebrates women's contributions and the vital role of women throughout history. It is a time to reflect on the cultural, political, and socioeconomic achievements of women. Managing Director Magda Loureiro shares a few thought on being a woman in the real estate and title industry.
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What is it like being the CEO and Managing Director of a company in a predominately and historically male industry?
​Throughout my 16 + year career in the real estate industry, I have had the pleasure of working with and being mentored by many inspirational entrepreneurial woman.

​I really have never felt that being a woman has been an obstacle in my career. On the contrary, I think my femininity and delicacy afforded me an advantage in being able to excel in the real estate and title industry.  I also vigorously support other female entrepreneurs in the industry and try to be a leader and mentor to the females that surround me.

If you could give your younger self advice, what would you say to her?
I would have probably told me to have fun, but not too much fun, and to invest in real estate as soon as possible.

Everyone always gave me the advise to find work that you love, but I think you need to look for work that makes you money so you can do the things you love.  I would tell myself to negotiate hard for the things I want. You cant be afraid of risk or failure or you will never excel in any career. The worst thing that can happen is that you don’t get what you want, so it never hurts to ask.

​I would tell myself to know my worth and make sure others can see it too. It's not about what you know, but who you know and a strong network and a recognizable brand will lead you to success.

What does it mean to be a woman today?
I think it is impossible to define what it means to be a woman in this short paragraph. A woman can be anything they want to be. I think some women were meant to be mothers and homemakers, and some were meant to be athletes and some were meant to be entrepreneurs and some, all three.

For me being a woman means living a life that I am proud of, filled with love and successful achievements and being surrounded by my family and friends who I can support.

​Miami is a flourishing and ever-growing city. A fast-paced environment that demands companies to follow its growth. Here, at Sun Life Title, we plan to keep you up to date on what’s happening around our community from the latest trends in the industry to upcoming events in South Florida. The goal is to help build a network for like-minded individuals to grow better together. We intend to keep you ahead of any market updates such as the FHFA’S announcement to increase upfront fees and to help inform you about the latest news when it comes to the title industry. With that said, welcome to Sun Life Title’s blog.

Earlier this year, the Federal Housing Finance Agency (FHFA) announced targeted increases to Fannie Mae and Freddie Mac’s upfront fees for certain high-balance loans and all second home loans; these loans only apply to government sponsored enterprises. A high-balance mortgage loan is defined as a conventional mortgage where the original loan amount exceeds the conforming loan limits published yearly by the FHFA but does not exceed the loan limit for the high-cost area in which the mortgaged property is located. The 2022 conforming loan limit for one-unit properties will be $647,200, while the loan limit for a high-cost area is $970,800.

The new fees will go into effect starting April 1st, 2022. The upfront fees for high balance loans will increase between 0.25 percent and 0.75 percent depending on the buyer’s loan-to-value ratio (LTV). Mortgage lenders use LTV to determine the risk of a loan: The higher your down payment, the lower your LTV ratio. For second home loans, upfront fees will increase between 1.125 percent and 3.875 percent.  Keep in mind, that upfront fees are typically reflected in the interest rate.

Most high-balance loans will be impacted unless they are part of certain protected programs— such as HomeReady, Home Possible, HFA Preferred, and HFA Advantage. First-time homebuyers in high-cost areas with incomes at or below 100% of the area median income will also be exempt from the new high-balance upfront fees.

At Sun Life Title, we plan to keep you ahead of the game through our newsletter and blog posts. Please reach out to us at info@sunlifetitle.com if you’d like to learn more about this month’s blog or if you’d like us to cover a specific subject with next month’s newsletter. Your feedback helps us cater to your needs.

Bibliography:
FHFA Announces Targeted Increases to Enterprise Pricing Framework | Federal Housing Finance Agency, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Targeted-Increases-to-Enterprise-Pricing-Framework.aspx.

FHFA Announces Conforming Loan Limits for 2022 | Federal Housing Finance Agency, https://www.fhfa.gov/Media/PublicAffairs/Pages/FHFA-Announces-Conforming-Loan-Limits-for-2022.aspx.

“What Is a Loan-to-Value Ratio and How Does It Relate to My Costs?” Consumer Financial Protection Bureau, https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-to-value-ratio-and-how-does-it-relate-to-my-costs-en-121/#:~:text=The%20loan%2Dto%2Dvalue%20(,will%20require%20private%20mortgage%20insurance.