We Aim to Acquire 2000 Units Each Year in Florida
- Apr 14, 2010
Mark Pordes recently launched his own company, Pordes Residential, which provides strategic on-site sales and marketing services for residential real estate projects — with special emphasis on challenging condominium assignments.
Recently, developer BH III LLC, a private equity fund, retained the Pordes team for the purchase of Terra Beachside 6000 Collins, a 117-unit, six-story contemporary condominium in Miami Beach.
He talks to MHN about what his company does and the kind of sales tactics his team deploys to move the product off the market.
MHN: What is Pordes Residential?
Pordes: We represent developers or lenders who have excess inventory due to the overhang in the markets in South Florida. We reposition assets and assist developers and lenders move the product off the market. We focus on high-rise condominiums in Miami Dade, Ft. Lauderdale and Palm Beach County mostly by the waterfront with a minimum price point of 250,000 and the average price being 400,000 to 500,000. A lot of the projects we take on, are distressed in the sense that a lot of product was built here and when time came for closings to occur, only few and far between projects ended up closing.
MHN: What do you bring to the table for these developers and lenders?
Pordes: A lot of the companies are no longer running these projects; they are taken over banks or appointed receivers by courts who have no background in the real estate business. Being in this business for 25 years has allowed me to develop extensive networks outside of Floroda; in New York and Latin America who can reach out to and thereby getting the product absorbed. Our sources are buyers and brokers from New York, France, Russia Latin America and more.
MHN: How many units has your company helped off the market so far?
Pordes: We handled in excess of about 500 units in different locations across Florida in Palm Beach, Aventura and Miami Beach.
MHN: Who are the buyers?
Pordes: They are individual as well as big investors. The individual buyer could be someone who has been waiting on the sidelines and views now as a good time to buy with low interest rates and prices having come down up to 40 percent. That’s the kind of person who has been watching the Florida market and says this is a good time to buy.
The other buyer consists of investment funds and groups that want to come in and take a 3rd of whatever is left of a particular building for either rental purposes or for putting the units back on the market. They could come together and form groups or take money out of the stock market and invest it in real estate. These are the larger Dollar clients. I handle these clients whereas my team does the retail sales—one off sales here and there.
MHN: What is the goal of the company?
Pordes: Our goal is to acquire more inventory so that we can build our company. We want to work with lenders and developers who have the motivation to sell (without losing money of course) and maximize their asset by taking direction from a group (us) that has the experience and ability to really move product.
Our initial goal is to sell 2000 units a year.
MHN: How much have prices reduced?
Pordes: On the oceanfront prices have come down about 30 percent from where the high was (in 2008.) Off the coast; on the intercoastal or in secondary locations, prices have come down about 40 percent.
MHN: Where are prices going now?
Peres: The market is taking a slow turn right now, and developers are kind of leveling off. I think we saw the bottom. Prices are stable right now and I don’t think we are going to say them go down further down. We are seeing some velocity, for example, people are showing up in the sales offices, there is more movement, more brokers are coming in which is a good improvement from how it was at the end of last year.
MHN: Can you talk about the bulk sales?
Pordes: We specialize in bulk transactions (anything from 15 to 150 units). We put packages of units together.
MHN: Why do developers do bulk sales?
Pordes: Some developers want to take some units off just to take some inventory off. They want to take a small piece off the table and bring in some cash. But it depends on the developer’s or lender’s motive.
MHN: What happens after the sales has been completed?
Pordes: After we make bulk sale, we help the buyer/s figure out what their exit strategy is because they are not collectors. We either rent the units out or put them back on the market at retail prices, so they are non-competitive with the remaining units in that project. For example, if there is a 100-unit building and someone buys 25 of the units, we cannot put all 25 back on the market right away. So we come up with a strategy. We would release them onto the market in small numbers so they are not competitive with what is left. We don’t want to give the property a negative image or the stigma of a distressed property.
MHN: What is the main sales tactic your company deploys?
Pordes: We have a large internal and extensive network of brokers and buyers all around the world. My team is multilingual; there are Spanish, Portuguese, Russian, Hebrew and French speakers. So we cover a lot of different networks. These outsources really help in selling whatever project we have our arms around.
MHN: How does your company compare with other such local companies?
Pordes: Some of the largest groups that have been around in the Miami area, are tired and don’t have the level of excitement and enthusiasm that our team has. We are always networking and stay in constant contact with local agent. On the other hand, a lot of other firms are tired and have bought into the recession and that everything is bad. They are not positive thinkers and don’t believe people can make things happen, which is what we believe.