Tuesday, July 18, 2023

Signposts: Genting Malaysia Is Having Trouble Selling Some Prime Miami Property

From the Wall Street Journal, July 18:

Record Miami Land Sale Collapses Amid Commercial Real-Estate Slowdown
Malaysian company hits choppy waters in efforts to sell prominent site 

The collapse of a record Florida land sale leaves a billion-dollar hole of prime waterfront real estate in downtown Miami.

In the spring, Genting Malaysia, a Southeast Asia casino operator, cut a deal to sell the 15.5-acre assemblage for $1.2 billion in what would have been the most expensive Florida land sale on record. That deal collapsed in June when the buyer, a group led by Miami developer Terra, was unable to agree on terms and timing with Genting, which has owned the property for more than a decade, according to a joint statement.

The site continues to attract interest although no other potential buyers have been named. “There’s been no break in the receipt of offers at, and even above, the $1.2 billion price,” said Michael Fay, of Avison Young, the broker representing Genting.

Genting’s effort to sell the property comes amid signs that even the hot Miami commercial real-estate market is being slowed by the high interest rates and tight credit that is weakening sales volume and new financing throughout the country. High interest rates are particularly costly for developers buying land because they often have to pay interest for years before their project finally starts producing a cash flow.

The South Florida multifamily, retail and office market continues to outperform the rest of the country. But demand has slowed since its peak in 2021 partly because migration of residents has slowed in 2023, according to data from data firm CoStar Group and the Florida Department of Highway Safety and Motor Vehicles.

The number of Miami condominiums that sold for over $1 million fell 41% in May compared with the same month last year, according to ONE Sotheby’s International Realty. The median sales price, at $1.5 million, was down 3% compared with 2022, the firm said....