Strategic Real Estate Advisors (Stratreal), the same company that invested in the Heron Tower project in London, plan to raise $1 billion to purchase luxury Florida real estate that has be repossessed by banks. Dubbed "The Florida Prime Residential Opportunity Fund", investors aim to purchase oceanfront condos and undeveloped land that has been approved for housing.
Wealth funds from the Middle East as well as wealthy Europeans will likely seed the money for the fund. The plan is to buy in cash and wait 7-10 years to sell. They will initially target the Miami, South Beach, Palm Beach and nearby Star and Hibiscus Island markets however the fund may also look at properties in the Tampa and Orlando real estate markets.
A combination of the building boom and a collapsing mortgage market created the biggest surplus of condos in the Florida real estate market in about 30 years. Prices have fallen almost 26% since the boom in 2006.
Stratreal hopes to pay about $400 per square foot for Florida homes, right now they estimate prices are around $500/sqft and are set to wait for the best bargain.
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