user: Input: America’s Eroding Antiterror Intelligence
It is alarming enough to see the rapid advance, almost unhindered, of radical Islamist armed groups and terror across the globe, but the paralysis in Washington—exemplified by the Department of Homeland Security budget deadlock—compounds the crisis. Moreover, such political failure masks another unsettling problem. As al Qaeda and Islamic State gain strength, U.S. intelligence is relatively weaker and more challenged than at any time since the 9/11 attacks. Most of this weakness is of our own making.
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It's about: In The Wall Street Journal, Henry A. Crumpton writes that thanks to Snowden and other self-imposed harm, we know less about the enemy than at any time since 9/11.


Input: Bulk Condo Sales Clear Supply-at a Cost
The financial clouds hovering over the Monteverde condominium development in Boynton Beach, Fla., were driven away in late spring when an investor bought 118 of the project's 219 units in a "bulk sale," a popular method of moving large numbers of condos in one transaction.

But Dan Berwitz, a sales representative for a computer company who paid $204,000 for a unit in the Monteverde in 2007, has mixed feelings about the deal. He is pleased that the sale will bring financial stability to his building, but he isn't happy that the bulk-sale buyer plans to sell the units far below what he paid, in some cases as low as $100,000. "But unfortunately, right now, there's nothing we can do," he said.

Dan Berwitz paid $204,000 in 2007 for a unit in the Monteverde condo development in Boynton Beach, Fla. Now, after a bulk sale of units earlier this year, he is worried about the value but notes 'there's nothing we can do.'

In Florida, one of the nation's hardest-hit housing markets, prices of single-family homes and condos have been falling for the past three years due to rising foreclosures, an abundance of supply and tight credit conditions.

While there are signs that prices for homes are starting to stabilize in some Florida cities, that may not be the case for condos due in part to bulk sales such as the Monteverde transaction, which could put more downward pressure on prices.

Research firm Real Capital Analytics, which follows condo markets nationwide, tracked 27 bulk deals valued at $850 million, or $250,000 per unit, in 2007. Transaction volume dipped the following year, then rose to 82 deals valued at $839 million in 2009.

"I would think we're on pace to have a record year for these types of transactions," said Dan Fasulo, a managing director of Real Capital Analytics.

It isn't just Florida. Brokers say bulk-sale transactions are becoming more widespread in San Diego, Phoenix, Las Vegas and other markets in which condo projects mushroomed during the housing boom.

It is easy to see the attraction for investors, who are buying units at a sharp discount and in some cases paying less than what it would cost to build.

Condo Developer LLC, a Delaware-based company, in late spring closed on the $25.9 million auction sale of 165 units in the Vue at Lake Eola, a 375-unit luxury condo complex in Orlando, Fla., that had been operating under bankruptcy protection. The Vue, which has floor-to-ceiling windows, 20-foot ceilings and a rooftop terrace, cost $340 per square foot to build, but this latest purchase price works out to about $126 a square foot.

The swimming pool at the Monteverde condo development in Boyton Beach, Fla.

The new owners plan to sell the condos, one at a time, at a price of about $225 a square foot, at a profit of about $75 a square foot, when factoring in carrying costs including maintenance and real-estate taxes.

To remain competitive, developers of neighboring buildings must reduce their prices.

"Bulk sales in general can depreciate value of an asset and it does trickle down and affect other properties," said Carolyn Block Ellert, co-owner of Premier Sales Group, a brokerage that is marketing units in the Promenade near the Monteverde in Boynton Beach. The owner of the Promenade has slashed condo prices 40%, to the $150,000 to $600,000 range, since the beginning of the year. "We're lowering them to sell," Ms. Ellert said.

Bulk sales in some states may soon accelerate as projects work their way through bankruptcies, foreclosures and restructurings and as lawmakers in some states make it easier for investors to buy in bulk to deal with gluts of distressed units.

For example, in late June, Florida Gov. Charlie Crist signed into law a measure that would decrease liability for bulk-sale buyers. Under current law, any company that buys seven or more units in one building is considered the "developer," and is thus responsible to warranties related to the quality of the units throughout the building.

As of July 1, this is no longer be the case, says Mark Grant, a condo lawyer in Fort Lauderdale who helped the Florida Home Builders Association craft the bill.

Some competitors are philosophical about the market impact. For example, Toll Brothers Inc., has been trying to sell condos on Ocean's Edge at Singer's Island in Florida for $1.1 million to $3.5 million. Last month, a tough new competitor entered the market: Miami-based investment firm Lionheart Capital and Elliott Management Corp. of New York, which closed on a deal to pay for $120 million for 2700 North Ocean Drive, a two-thirds empty Singer Island development.

Condos there originally sold for $1 million to $6 million apiece, or about $650 per square foot. Ophir Sternberg, a managing partner at Lionheart, said the units will go back on the market starting at $500 a square foot, "with no rush to sell."

Jason Snyder, a regional official for Toll, acknowledges that "in the short term, [bulk sales] could hurt some people." But Toll doesn't see it as a "negative thing," he said. "Anything that gets that inventory down is a good thing. The bottom line is that we have to get the inventory down in order to get back to normal."
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It's about:

assistant: The Monteverde condo development in Boynton Beach, Fla., saw more than half its units sold in bulk earlier this year. Such transactions are likely to pick up, adding to downward pricing pressure on the market.