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Coffee Talk
Do I hear more
auctions? Going once...
Realtors at Sarasota-based SKY Sotheby's involved in a traditional tent-held auction of 20 multimillion-dollar homes May 18 considered the event a massive success.
And why not? Any day that ends in $30 million in closed sales, even ones at rates of as much as 40% off the original asking price, has to be labeled a good one, especially in the current market.
But auction aficionados and bargain hunters alike shouldn't get too excited. While Chad Roffers, president and co-founder of SKY, says the event was so successful the firm plans to do it again in the fall, not many other luxury realty firms in Greater Sarasota are planning a similar event. Some real estate executives tell Coffee Talk they consider multihome auctions a fad and a misleading indicator of what the market is truly doing.
Joe Hembree, president of the Sarasota Association of Realtors, for example, says he has always been a believer of the real old-fashioned way of selling real estate: getting out and doing it. The auction-process, while potentially successful on specific occasions, is no substitute for simply going about selling homes, he says.
Scott Sosso, president of Prudential Palms Realty, and Steve Bailey, who runs the Sarasota office of Naples-based Premier Properties, independently came to the same conclusion. They won't totally reject hosting a largescale auction, but the opening crack is tiny. "We need to innovate and differentiate ourselves," Bailey tells Coffee Talk, "but just because it's different doesn't mean it's an improvement."
Prudential Palms Realty has an auction division, but the firm has yet to hold an auction. If and when it does, Sosso says it will be at the seller's home, in an enclosed and defined environment. What's more, says Sosso, the seller would have to be qualified - mainly, someone with a good amount of equity in the home, not a flipper.
"Right now it's a good way to move product," says Sosso, "but it's not going to be a long-term solution."
Michael Saunders & Co., the biggest firm in the Sarasota area, hasn't held an auction yet either. And company founder Michael Saunders says that's not going to change anytime soon.
Saunders tells Coffee Talk the concept makes sense when selling art, but in real estate, there are too many variables. That includes investors who might come to auctions looking for the Next Great Flipping opportunity - good for the buyer, but not necessarily the seller when property is sold at a quick discount.
After talking to some auctioneers and going over the idea with her top staff, real estate auctions, Saunders decided, "serve no one but the auctioneer."
Looks like it's different strokes for different folks when it comes to SKY Sotheby's. The firm's auction, which Roffers initially thought about putting together when he co-founded the firm five years ago, was a success on several levels, he tells Coffee Talk.
First, there were the closings. Says Roffers: "It shows that quality properties, when properly exposed, can generate good returns."
And then there were the individual sales. A seven-bedroom estate on 14 acres in the Lakewood Ranch Polo Club brought $6 million, a record for the area, but a price considerably lower than the original asking price of nearly $9 million. A home on Bird Key sold for $5.75 million, the second highest sale of the auction, according to a spokesman from the firm running the auction, Gadsden, Ala.-based J.P. King.
Finally, the auction, held on the grounds of the Ritz-Carlton, Sarasota, succeeded in generating interest among people wanting to buy homes again, says Roffers. Nearly 100 people, from as far away as Utah and Illinois, registered to place bids on homes, and overall, there were more than 300 interested people cramming under the tent during the bidding.
+ Still waiting
on SevenShores
When the Review profiled the SevenShores condo and mixed-use development project June 9, it was a story about persistence and perseverance. Mainly how Joe Romanowski, the point man on the Manatee County project for the developer, Jacksonville-based St. Joe, had spent years surviving lawsuits, disputes, zoning changes and more lawsuits that independently and collectively threatened to derail the project on numerous occasions.
Get out the persistence meter: St. Joe, a publicly traded company under the symbol JOE, decided to temporarily suspend sales earlier this week. The official line from the company was that the "slowing market has provided an opportunity to measure and analyze current demand so that we can better align our future product offerings before moving ahead with sales."
Which, on the Coffee Talk corporate interpreter, translates into: No one was buying, so we decided to hold off on sales.
Romanowski, reached by Coffee Talk, deferred all calls to St. Joes' corporate office. But he can't be too happy with the latest setback. Going back to 1998, his work on the project, covering 352 acres on Perico Island in western Manatee County, included rewriting several development plans to meet the changing rules imposed by Manatee County, which was responding to groups and critics of the project who said the buildings were going to be too tall, have a negative impact on the environment and would slow down traffic on busy Manatee Avenue during a hurricane evacuation.
The ultimate project scheduled to be built included a gated community of 13 condo towers, two of which were to be 12 stories high, along with 30,000 square feet of retail stores, restaurants and a marina with boat slips.
Romanowski can take solace in what he said last year, responding to how he felt about holding steady on a project with so many setbacks: "That is just the development business today," he said. "It's not for the faint hearted or those without the financial wherewithal to hold on."
+ Ave Maria University
sells old campus
Ave Maria University will sell its campus near Vanderbilt Beach Road and Interstate 75 to a group of undisclosed Tampa investors who will redevelop it as a retirement community, says Nicholas Healy Jr., the university's president.
The 12-acre site north of The Vineyards residential development includes dormitories that will be converted into senior-living facilities, Healy says. Meanwhile, the university will move to its new campus in Immokalee in eastern Collier County in August.
A contract was signed May 21 but won't close until August when the administration and faculty move to Immokalee.
+ Tampa firm finds interest in its latest discovery
Diving crews working for Tampa-based Odyssey Marine Exploration found much more than $500 million in water-buried treasure earlier this month in the Atlantic Ocean. The treasure hunters, and by extension the publicly traded company, also discovered there's no good deed, or in this instance entrepreneurial effort and risk, that goes unnoticed by government officials.
In this case, it's the government of Spain that might want a piece of the action. Spain's cultural minister trumped earlier news of the gold and silver coin discovery by stating it will claim the colonial-era treasure if it was removed from Spanish waters, the company reported.
The Spanish interest comes despite Odyssey executives saying the ship they found was not in Spanish waters and was not the HMS Sussex, a shipwreck the company recently got permission from the Spanish government to search for in the Strait of Gibraltar.
No matter, Spain officials put down a claim on the discovery, which the company is calling Black Swan and is claiming to be one of the "largest collection of coins ever excavated from a historical shipwreck."
Shares of the company, traded on the American Stock Exchange under the symbol OMR, rose 81% May 18 on the news, from $4.60 a share the previous close to $8.32 a share. This from a stock that was languishing in the $2 a share range earlier this year.
What's more, there are others interested in the discovery that would actually pay for it. The Franklin Mint, a company that buys and sells collectibles, said it was interested in possibly buying parts or all of the treasure and Disney representatives were already speaking with Odyssey executives about developing a movie or TV script on the project.
+ Medical firm seeks to
alleviate debt with IPO
Executives at Clearwater-based medical supply firm CCS Medical Holdings are seeking to cash in on the firm's recent revenue growth spurt by announcing plans to go public. And in turn, company executives, in an SEC report announcing the IPO, say part of the $172.5 million they hope to raise will go to pay back its debt, which is substantial as well.
CCS was formed in 2005, when New York-based private equity firm Warburg Pincus bought Clearwater-based CCS Medical and Tampa based MP Total Care and merged the companies together. The $645 million deal set up what's now one of the biggest companies nationwide that focuses on mail order products for those under chronic medical care.
The company had $432 million in revenues in 2006, the first year it was reporting the combined totals of its two predecessor companies. About two-thirds of that revenue, according to the SEC documents, stem from the sale of diabetes related chronic care products, including test strips, insulin pumps and medicines. That market represents the firm's future planned growth, executives say.
But the company also reported a $26.8 million loss in 2006, the result of ongoing interest payments on its remaining debt. Its SEC filing states that it ended 2006 with $51.2 million in interest expense.
CCS Medical isn't only big in revenues. The company has 1,400-plus employees working out of locations in 17 states, in addition to facilities in its Clearwater headquarters and in Tampa.
The underwriters for the IPO, which include Wachovia Securities and Raymond James, have not determined a date yet for the offering. The company plans to be traded on the Nasdaq exchange under the symbol CCSM and Warburg Pincus would still own more than half of the stock after the IPO.
Finally, it sure looks like CCS has the right man in charge to be entering the sometimes fickle and always demanding world of public companies: Chief Executive Officer Joseph Capper is a retired combat-decorated Naval Flight Officer, who also served as a staff officer for the Joint Chiefs of Staff.
Motivate
from within
Everyone needs a little motivation now and then, even the best of the best employees.
So for those executives, entrepreneurs and anyone else looking to get more out of the staff as the warm and sometimes slower summer months are upon us, Gevity, the Bradenton-based human resources outsourcing firm for small and mid-sized businesses, has complied a top 10 list of ways to motivate.
Using research culled from clients, here are the company's suggestions. (For more on Gevity's progress in changing its business model, see Page XX).
1. Provide a free breakfast or lunch to employees;
2. Create a weekly "wall of fame" with fun photos of employees and accounts of their accomplishments;
3. Each week, choose employees from each department to dine or do an activity with members of management;
4. Give out tickets to movies or sporting or musical events;
5. Hold an employee field day, with fun activities that all employees can participate in;
6. Create quirky awards for specific achievements;
7. Volunteer to do an employee's least favorite task for a day;
8. Throw a party for your employees, either at the office, a manager's home or at a favorite restaurant;
9. Have a job exchange day, and be sure to include management;
10. Allow employees to work a flexible schedule (when appropriate, taking into consideration the business' needs).
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