Bank Says Laketown Wharf will be 'taken care of'

One of the Corus Bank investors sent me an email with the Quarter 3 report of Corus Bank that has a paragraph that briefly speaks into their Laketown Wharf holding.  The paragraph gives some indication as to their plans of the building in the near future.

The remaining component of nonperforming assets is OREO, which consists of three properties as of September 30, 2008. The largest is a condominium project located in Panama City, Florida, which Corus took possession of in September 2008. At the time Corus took possession, the outstanding loan balance of $96.5 million was transferred to OREO on the balance sheet. Prior to the transfer, Corus recorded a charge-off of $30.2 million. While certificates of occupancy have been received for the entire project and over 60 units have been sold, management estimates that an additional $10 million will be necessary to complete all work on the building. The Bank also intends to pay an additional $5 million to furnish approximately half of the unsold units and make them available for rent. The ultimate goal, however, is to sell all of the individual units.

I found this extremely interesting, and actually quite encouraging.  Not that a huge bank would ever let a holding this large “go to the birds”, I’ve seen stranger.  It is very important to the image of Panama City Beach that Laketown Wharf maintains a good image and that something does indeed happen with this property, whether the remaining condos are sold for whatever they can be sold for, or rented.

Talking to a friend today, I was told that Laketown Wharf has no formal agreement with anyone for beach access.  I hope that Corus can negotiate a permanent solution for the guest, tenants and owners to have access to the beach.

The rest of the report provides interesting insight into how a large bank is handling the current economic condition of our great country.

The report seems to indicate the banks willingness to finish the job and do what it takes to move forward.  A property they took possession of in California, they will be funding, finishing, marketing, and selling.

Ironman this weekend – bikers/runners everywhere

Swim 2.4 miles, Bike 112 miles, Run 26.2 miles.  If that doesn’t make you into “iron”, I don’t know what will.  I’ve never been a triathlete, but knowing a few, I have huge respect for the feat they overcome in order to compete in these remarkable competitions.

I couldn’t even imagine running 26.2 miles, but these athletes precede this with a long swim and a very long bike ride.  And many of them do it in less than 10 hours.

Ironman Florida has been in Panama City Beach since 1999.  With normally crystal clear skies, warm weather, and warm water, Panama City Beach has proven year after year that this is the prime place for a competition of this nature.

Every year thousands of triathletes, and hundreds of profesisonals flock to our area to participate in this event of all events.

The weather this weekend is expected to be perfect and the water warm.  Staging is taking place today with change bags carefully organized in strategic rows so that each competitor can move from stage to stage as seamlessly as possible.  The South Thomas Drive area is packed with it being extremely difficult to walk, much less drive.  Baracades have been put up making parking nearly impossible without a short walk, and the massage tent is up, running and full of sore and weary muscles being relaxed and soothed.

The race begins tomorrow with the 2.4 mile swim in the gulf behind Boardwalk at 7 am.  As early as 8 o’clock, athletes will be exiting the water to begin their 112 mile bicycle ride.  Many cyclists will return from their journey up highway 79, across highway 20, down highway 231, back across highway 388, and down highway 79 as early as noon to run over 26 miles.  Wow.

Anyway, I’ll be around tomorrow to take various pictures and talk to whoever will talk to me.  See ya at the race!

Discussion, Not Journalism

PCBDaily.com is an excellent example of home-town blogs that have popped up all over the world, connecting members of communities like never before.  It is a place where citizens and community leaders can have a platform to voice their opinions and share valuable experiences in regards to local life.

I had a friend recently say, “so you’re playing journalist now…”  No, I am not trying to be a self-taught journalist (even though I did take a couple journalism classes at the mighty University of Alabama). I am playing “citizen participant” in the new world of online democracy.  This is a discussion, not journalism.  This is not trying to be traditional news media, it is trying to put new ideas on the table, up for discussion by all affected.

And why wouldn’t you participate if you care about our local way of life?

The very first question I asked the existing TDC Board when they formed was, “have you folks ever heard of a blog?”  In the aftermath of the previous board being dismantled for apparent disregard for “Sunshine Laws“, I was shocked to find that the TDC Board was making seven-figure decisions meeting just an hour or two a month.  I thought certainly one member could call another to discuss things such as creative messaging and media buys.  But they “cannot.”

I suggested a blog would be perfect for the leaders and their constituents to share ideas and concerns,  eventually producing a clear decision from the majority.  Isn’t that Democracy?  But I was told that the TDC could not have a blog.

But now we have new resources such as PCBDaily.com, a private, yet public entity that does not have to fall under any special sunshine laws or restrict leaders from voicing their opinions and solutions to move forward as a community.

We have seen several leaders make comments and suggestions on PCBDaily.com, and ask that all members of the community — especially the elected and appointed leaders — consider posting your thoughts and solutions here in this forum. Your role in reporting the “good news” to traditional news media is expected and tolerated, but your role in having open dialogue with your constituents is becoming a reality.

Eventually, leaders in Bay County and communities throughout the U.S.A. must participate in open dialogues such as these.  Otherwise, you’ll never last long in that leadership position.

New Magazine for Northwest Florida Business

The 411 on 850
New Magazine To Focus on Northwest Florida Business

The company that has been bringing Bay County Bay Life Magazine – the area’s premier lifestyle publication – for the past 2 years launched a new title in October, this one geared toward business owners and executives across Northwest Florida.

Rowland Publishing’s newest magazine, titled 850 – The Business Magazine of Northwest Florida, will focus on a 16-county region from Pensacola to Monticello that roughly covers the same region as that included in the area code that’s part of its name.

“850 has been in the planning stages for at least five years now,” says magazine owner/publisher Brian Rowland. “In preparation, we have created a business journal section in Bay Life Magazine and our other titles, as well as meeting with literally hundreds of business leaders throughout the region to determine what sorts of information they’d look for in such a publication. I’ve been encouraged at the enthusiastic response of these leaders who have told me a magazine like this is needed.”

The quarterly magazine will be direct-mailed to 15,000 business decision-makers, government officials and other opinion leaders, as well as being available by subscription, in select retail outlets and online. “We believe Northwest Florida is on the cusp of an era of unprecedented growth,” said Rowland. “Our intent is to give business leaders the information they need to take advantage of the opportunities presented by this unique set of circumstances – and to showcase the region to business decision-makers across the U.S. who may be thinking about locating here.”

Each issue will include features of general interest to Panhandle businesses as well as more in-depth looks at four different regions-within-the-region – Bay, Capital, Emerald Coast, Forgotten Coast and soon to evolve the I-10 Business Corridor.

Veteran reporter/editor Linda Kleindienst, who has spent the past 27 years as a newspaper bureau chief in Tallahassee, has been named editor of the new magazine. “Kleindienst brings a wealth of knowledge and experience to the position,” said Rowland. “She has the ability to give readers an in-depth look at issues of interest in our region – a region I believe has been overlooked in much of the statewide business coverage we’ve seen up to this point.”

In addition to Bay Life, Rowland Publishing produces Tallahassee, Emerald Coast and Forgotten Coast lifestyle magazines, and also offers creative and publishing services for a broad range of industries including resorts, visitors bureaus, developers, real estate and financial institutions, just to name a few.

For more information, visit the magazine’s Web site, 850businessmagazine.com.

Resort to Quality Education Program gives over $1k

Panama City Beach, Fla. (October 15, 2008)—The Resort Collection of Panama City Beach announced the first award presentation to a participating school in their Resort to Quality Education (RQE) program, which began in the spring of 2008. The RQE program was created in an effort to promote the vacation properties within the Resort Collection while supporting education and contributing to schools.

Any school may participate in the program simply by informing parents, teachers and school supporters about the RQE offer through flyers, posters, school web sites or any other appropriate means of communication. Every time a teacher, student, parent or school supporter makes a reservation with any Resort Collection property and gives the name of the participating school, a 20% discount will be given off the room rate. The Resort Collection will then give 5% of the total room revenue accrued under that school’s name back to the school every quarter.

Recently, The Resort Collection awarded the first RQE program check. On October 10, 2008, The Resort Collection’s Business Development Manager and local Director of RQE, Heather Walsh, presented a quarterly check for $1195.60 to Jim Arrington, headmaster of Macon-East Montgomery Academy, located in Cecil, Alabama.

President of the RQE program, Mike O’Malley, said, “I am honored and blessed to be involved in the development of the RQE program that offers schools the opportunity to fund future educational programs in a creative way.  For years, our resort properties have witnessed families enjoying our accommodations and this program gives us the ability to send a little of us home with them.  We can’t wait to see how these funds are used by the participating schools and how we can further expand our participation in promoting quality education.”

Condo Market after Ocean Reef Condo Auction

The Ocean Reef auction on October 18, 2008 concluded with a reported 35 sales.  Sounds good but they still have over 140 unsold units in their inventory.  The 2BR/2Ba units sold for $225,500, including the auction fee, which is about 20% less than recent sales of very similar Emerald Isle 2BR/2Ba units.  This tells us that there are a few buyers out there willing to buy at a 20% discount.  The Palazzo auction in August told us there were a few buyers out there willing to buy at a 10% discount.  The question is whether buyers will demand more than a 20% discount at the next auction.

We reported in July that there were over 1,300 unsold, high-quality developer units in beach-side buildings in Panama City Beach.  The Palazzo auction sold 50 units in August, the Ocean Reef auction sold 35 units in October, and Sterling Breeze closed 30 units in-house since July.  That still leaves around 1,200 unsold developer units that need to be sold.  1,200 unsold developer units most likely means more auctions and lower prices.

The local condo market continues to trend downward.  The chart later in this post indicates that sale prices as of October 2008 are down 15% compared to October 2007.  New lows are set almost every month in high quality beach-side buildings.  There are numerous examples of list prices that are below the lowest reported sale price of a particular model unit.  Foreclosure proceedings in high quality beach-side buildings have accelerated in every quarter over the past year.  The number of monthly, arms-length, market-rate sales from the 70 buildings within our database continues to decline.  The market dynamics at play in our local market and just the market inertia will most likely drag prices lower.

Is there any good news here?  If your basis for news is the year 2005, then market values have declined 50% and the world is coming to an end.  However, if your basis is the year 2002 then story is more upbeat.  Let’s look at the 744 square foot, 1BR/1Ba units in Long Beach Towers.  These units were selling in 2002 for around $175,000.  Currently, they are selling in the $215,000 range for a 23% increase since 2002.  The rate of inflation in constant dollars over the same period was 21%.  Not bad when you consider any other long lived item (vehicles, equipment, etc) you purchase almost always depreciates over time.

It is unreasonable to assume that residential property will always increase in value at a rate higher than the inflation rate.  If you extend price increases at a 2% to 3% rate above the inflation rate over a 30 year period, people will be spending more than 75% of their income on a place to live.  That is not a sustainable scenario.

Is this a good time to buy?  If price is your main consideration, the operative question becomes “is it a good time to buy today relative to what point in time”.  Certainly, today is a better time to buy than six months ago.  But is it a better time to buy today than six months from now?  The answer you will get depends on the agenda of whom you ask.  Speculation in this kind of market is not for the faint of heart.

The following is an update of our usual, no spin data from http://www.condosaletrends.com which we hope will help you in your investment decisions.  As always, if you lie to yourself about things concerning money, you lose.

We recently updated our Panama City Beach condo sales data through mid October 2008.  The graph below illustrates the number of monthly re-sales from the 70 Panama City Beach condo buildings in our database.  The 2008 monthly re-sales since July appear to be trending lower than past years.

The market trend line is illustrated below.  It is structured to show a sale price trend measured in terms of the percentage sale price as of a particular date.  The starting date used was May 1, 2007 so we could show the price trend for the preceding 19 months.  We chose units from a variety of buildings of different ages and sizes that had a sufficient number of sales as to be statistically significant.  The units used in the analysis were:

  • Boardwalk Beach; Opened in 2005; 1,380 SF;  2BR/2Ba
  • Calypso; Opened in 2006; 1,226 SF; 2BR/2Ba
  • Celadon; Opened in 2004; 846 SF; 1BR/2Ba
  • Grandview; Opened in 2005; 1,492 SF; 3BR/2Ba
  • Gulf Crest; Opened in 2003; 1,388 SF; 2BR/2Ba
  • Emerald Isle; Opened in 2005; 1,146 SF; 2BR/2Ba
  • Treasure Island; Opened in 2005; 1,370 SF; 2BR/2Ba
  • The Summit; Opened in 1983; 912 SF; 1BR/1.5Ba
  • Regency Towers; Opened in 1975; 1,114 SF; 2BR/2Ba
  • Sterling Reef; Opened in 2005; 1,076 SF; 2BR/2Ba
  • Splash: Opened in 2006; 1,074 SF; 2BR/2Ba
  • Seychelles; Opened in 2006; 883SF; 1BR/2Ba

The May 1, 2007 market value for each type of unit was determined by analyzing sales data from January 1, 2007 to June 19, 2007.  The sale price of each type of unit is only compared to the typical sale price of that particular type of unit as of May 1, 2007.  In other words, a unit type with a May 1, 2007 market value of $400,000 is represented as 1 or 100%.   An October 2007, $380,000 sale of that type of unit is depicted as .95 or 95% of the May 1, 2007 sale price.  The sale prices and sale dates were charted with a price trend line for each type of unit.  The chart contained in the price trend analysis is a trend line of the trend lines of the sale prices of each type of unit from the 12 buildings.  Foreclosure sale prices that were unrealistically low were not included.  There were 177 sales used in the chart.  The analysis does not try to skew the price trend in any direction.  The data is just the data.

The data indicates that the rate of price decline has been mostly steady over the past 19 months. Compared to October 2007, it appears that typical prices have declined approximately 15% over the past 12 months.  Price stabilization is not indicated.

Sam Portman
www.condosaletrends.com

PCBDaily Twitter Weekly Updates for 10-28-2008

  • Heading to an airport meeting #
  • Of you are reading this right now, shut down your computer and go outside, it is gorgeous in panama city beach #
  • Boo at pier park was great with free bouncy houses and crafts for the kids. You should go if you can. #
  • Heading to boo in the park at pier park panama city beach #
  • Oh man, yesterday was nasty rainy, but today is nothing short of an absolutely gorgeous day #
  • Just finishing up a “why buy now” article about the Panama City Beach real estate market. check it in the am, yea, I’m off to bed. #
  • @ChrisTheMacGuy Pier Park is perfect for rainy day shopping, they say it should clear up tomorrow. Enjoy your vacation! in reply to ChrisTheMacGuy #
  • It is a rainy day in panama city beach #
  • Working on ad sales tool. Advertise with pcbdaily! Support you favorite online rag! #
  • Checking on my motorcycle that is for sale. BUY MY MOTORCYCLE #