Fernando Garcia is partner at Hinshaw & Culbertson in Miami, where he represents developers, lenders and institutional and corporate clients. Garcia, who travels the lecture circuit to discuss the impact of the Distressed Condo Act passed last year by then-Governor Charlie Crist, said the effect of the act has been less than anticipated, with many would-be investors still scared off by the potential of becoming landlords. The Real Deal talked to Garcia about the act, the loosening of financing in South Florida real estate and how real estate law practice has changed since the beginning of the downturn.
What has been the impact of the Distressed Condo law?
I don’t think it’s had the desired impact. I think you still have a lot of buyers looking at projects and not pulling the trigger, possibly because they think that the prices will bottom out more. I think that, hopefully, the next quarter or so there’ll be a pick up in these types of transactions. What buyers need to keep in mind is that the protection ends on July 1, 2012, and the legislature has not extended the effect of the act beyond that date. I spoke to someone at the Florida condo division not too long ago, and he doesn’t know of anything that [is on track to] extend it. Obviously the time to act is now, sooner rather than later.
Has the July 1, 2012 deadline had an impact?
I don’t know that it is having an impact [on buyers] or not. There’s a lot more buyers out there looking to do deals, and you see a lot more interest. I have some clients that are looking to do things and looking for the best deal out there. I don’t know if they’re hesitant because they think the prices are going to go down — on the other hand, I’ve had situations where I’ve repaid lenders who are foreclosing, and you get inquiries from a bunch of different sources asking me about the terms of the deal, that they want to buy the loan. This is for apartment buildings, rental buildings. Clients are looking — not just for condos, but for apartment buildings and income-producing properties.
How has real estate practice changed since the beginning of the downturn?
It has changed — because obviously the nature of the practice has changed. There isn’t the same amount of development activity that there was in the past. What has changed is the emphasis on representing lenders or buyers with regard to properties that are in foreclosure, or working out loan modifications or deeds in lieu of foreclosures.
How has financing changed?
I know a couple of lenders that we do work for that are actively looking for good loans, commercial loans. I think lenders are seeking good commercial loans, and I know that I’ve gotten requests from different lenders looking for transactions.
Foreign buyers have been all over the residential market here. Has that happened on the commercial side?
Yes — certainly Brazil seems to be a hot area. Brazilian buyers are coming in. The countries that are doing well and the economies that are doing well [are active]. We still have buyers from other countries coming in and buying, but Brazil seems to be the focus.