Florida real estate gains a new appeal
Buyers from eastern Europe are looking for bargains
By Tom Bayles
Published: Wednesday, October 29, 2008 at 1:00 a.m.
Prague resident Martin Urman has $5 million in his pocket and he is planning on
spending it here.
Urman, 39, is a residential developer who has been riding a wave of post-communist
capitalism that has infused huge sums of money into former Soviet states. Those clever
enough to take advantage of the burgeoning free-market economies have made a killing.
He and his colleagues say they are now poised to invest a significant portion of that
wealth in Southwest Florida's ailing real estate market.
"Me and my business partners think the real estate market is down in its cycle," Urman
said by telephone recently from the Czech Republic. "We would like to take advantage of
the down market and buy a residential building. We are looking not only for the rental
income, but an appreciation in value in the next three years."
Urman's investment group is being assisted by Sarasota attorneys Alan Tannenbaum,
who has specialized in real estate for three decades, and Ivo Travnicek, a lawyer in
Tannenbaum's firm. Travnicek hails from a city outside Prague and is fluent in English
and five eastern European languages.
With Ian Black, a commercial Realtor who has spent his career selling real estate first in
Ireland and now in Southwest Florida, as a consultant, Tannenbaum has formed Florida
Venture Partners to smooth over the myriad complications foreign buyers face when
purchasing Florida property.
Southwest Florida could use the inflow from Eastern Europe like it could at no other time
in recent history. There are more than three times the number of homes for sale than is
normal. An already rampant foreclosure rate spiked again in September to a record. With
the economy and stock market in dis even at today's depressed prices.
Foreign buyers like Urman and his partners have the potential to be game changers.
After four trips overseas to generate interest in Florida real estate from investors from
Slovakia to Hungary to Russia, Florida Venture Partners is now bringing over the
investors themselves -- an elite group whom Tannenbaum claims are poised to sink
potentially billions of dollars into the Sunshine State.
"They have a lot of capital and staying power and they are not looking to turn a profit
next year," said Tannenbaum, well-known in this region for his representation of loan
holders from Bradenton's former Coast Bank. "We'll have the channel open so the rest of
them will see us as the portal to investment over here. Florida as it exists now will be
bought by the world."
Florida far outpaced all other states in attracting foreign investment, with roughly 25
percent of all purchases made by international buyers done in the Sunshine State,
according to a recent National Association of Realtors study.
Often grouped under the unsavory-sounding term "vulture funds," opportunistic
investment groups like those being courted by Florida Venture Partners already are being
pursued by others in the state.
Some are units of existing regional real estate firms, such as Prudential Palms Realty,
Michael Saunders & Co. and Coldwell Banker Residential Real Estate.
Others, like Tannenbaum's group, have formed in the last few years with a laser focus on
a specific type of investor seeking to profit from real estate prices that -- at least in terms
of residential prices -- today equate with the pre-boom year of 2003.
While the investors may differ in where they are from, or in what segment of the real
estate market they are interested in, they all share a common thread: pay as little as
possible now; sell for much, much more later.
A Bal Harbour-based company does little to hide its scavenger-like mission. It is in their
name: Condo Vultures Realty.
"Our best guesstimate is that 95 percent of the people who hear the term are disgusted,"
owner Peter Zalewski said. "But the five percent of the people who hear the term and
know what it means are the people who have the money today. Everything we do is legal
Since incorporating in the post-boom year of 2006, Zalewski said the business of selling
off the bloated Miami-Dade County condominium inventory has been brisk.
"We have been rocking and rolling ever since," Zalewski said.
His company has grown to 29 agents in Southwest Florida and they are expanding into
other deflated markets such as Las Vegas and San Diego.
There has been interest from more than 200 funds, including hedge funds and university
endowments. About 70 percent of that interest has been from domestic sources and 30
percent from overseas, including locales such as Singapore, Canada, France and
"If you're a savvy buyer and you are trying to find product in the hot-button market at a
bargain price, here we are," Zalewski said.
'A broad range of projects'
Warren Buffett, the legendary investor whom Forbes still ranks as the world's richest man
despite a deflated stock market, has predicted that in 10 years the net ownership of U.S.
assets by foreigners will amount to $11 trillion.
Tannenbaum also believes that is a possibility. He said a typical investor working with
his firm might be a Czech who, flush with oil, mineral or development company money,
could buy a $2.6 million Siesta Key home, 50 condo units with golf course privileges for
friends and business partners and a commercial building to establish a U.S. base for his
Some of Tannenbaum's clients may, in fact, fit into the opportunistic world of "vultures,"
but others will actually help out the market by providing the cash to complete a half-built
subdivision or commercial complex stalled by the credit crunch.
"It's a broad range of projects," he said. "Nobody has yet to come in and buy the huge
inventory of overbuilt condo, homes and half-built subdivisions."
While some of the more traditional realty firms may work merely to entice a foreign
buyer to Southwest Florida, Tannenbaum and Travnicek plan to offer year-round
Tickets to the ballet, a day at the spa for relatives, a round of golf at the Ritz-Carlton
Members Club or transportation to box seats at a Tampa Bay Buccaneers game are
examples of what Florida Ventures Partners might choose to arrange when the investors
are in town.
Yard service, house cleaning, maintenance and rental oversight would be some of the
services the company would provide when the owners are away.
"There is hundreds of billions of dollars of Florida property that needs to move, and I
believe much of it will be bought up in the next few years," Tannenbaum said. "They
have the money to invest and we are going to get them to invest it in Florida."
Urman, the Prague developer, equates the $5 million to seed money: "Me and my
partners are ready to make new investments if we are satisfied with the results of the pilot
Jack McCabe, a Deerfield Beach-based real estate consultant, said Florida Venture
Partners seems like the right idea at the right time.
"It's a smart strategy and they are reaching to where the buyers are now," McCabe said.
"They were communists 20 years ago and since they have become a capitalist market,
some of them have made tremendous fortunes."
McCabe, who pointed to a handful of similar ventures in South Florida, said the eastern
European investors may do a good deed or two along they way -- such as helping that
struggling builder finish his subdivision -- but make no mistake: They are opportunistic
"They didn't make these fortunes by making stupid decisions," he said. "They're looking
at taking advantage of buying Florida properties at 30 or 40 cents on the dollar."
Part of the reason these buyers want to travel halfway around the world to invest in a
second, third or even fourth home is the same thing that has drawn many others: Florida's
But another draw is the very fact that the properties would be so far away from home,
"They are big fish in a small pond there, but here they can go to Whole Foods and go
golfing and nobody knows them," he said. "The Russian investment alone is going to be
huge. They like America and they are coming."
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