FL Distress Still Hot for Carlton

By Hortense Leon

(GlobeSt.com) MIAMI-Since the beginning of 2010, the Carlton Exchange, an online commercial and residential real estate auction site, has been hired to sell over $1 billion worth of commercial real estate properties and loans in Florida, through a sealed-bid process. Sealed bids for its latest offering, which is composed of almost all Florida properties, a $188 million portfolio, are due by June 4th.

The $188 million portfolio includes a loan for a shopping center in Boynton Beach and a $10 million loan for 12 remaining units in a six-story luxury condominium in Jacksonville Beach. Florida is one of the top five states which have the most distressed assets, says Howard L. Michaels, chairman of the Carlton Group, which runs the auctions.

“Because investors now have increased liquidity both from third party financing, equity joint ventures and their own increase in personal net worth,” says Michaels, Carlton has been able to sell millions of dollars worth of loans and REOs so far this year.

In another auction, this one with real-time bidding, says Michaels, there are 80 assets worth $400 million. In this group are non-performing first mortgages and REOs, including multi-family, retail and hospitality properties as well as land. This auction started two weeks ago and over 1000 people have already responded, says Michaels. Three of the assets condominium conversions in Jacksonville, Orlando and Miami Dare already under contract, he says. The bidders are varied, from local investors to institutional funds.

The reason that more properties are being sold today, says Michaels, is that the bid-ask spreads between what the seller, usually a bank, is looking for, and what the buyer is willing to pay, have compressed in recent months. He adds that certain markets have rebounded, including Miami and Jacksonville. At the same time, the fear that property values are still declining is diminishing, says Michaels.

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