By Michael Eadie
Gulfstream Realty & Development, LLC
August 20, 2007
8/16/2007 Released by Vincent Creel, Public Affairs Manager, City of Biloxi - Post-Katrina construction in Biloxi tops $700 million mark
The city’s Community Development Department has announced that Biloxi has issued more than $700 million in permits for construction in the 23½ months since Hurricane Katrina, and nearly three-quarters of the work has been non-casino and non-condominium work.
“You hear a lot of talk about all of the casino and condo plans in Biloxi,” Holloway told a Biloxi Chamber of Commerce audience earlier this week. “But I think the real story is the $444 million in non-casino and non-condo construction taking place throughout our city.”
However, Holloway added, casino resort and condo construction is certainly helping drive overall construction.
In all, $261 million or 36 percent of all construction has been related to casino and condo construction since Katrina, including a $7 million permit issued this week for foundation work at the Margaritaville site on Casino Row.
A breakdown on the Community Development Department figures since Hurricane Katrina:
• Total number of all permits issued: nearly 20,000 (includes commercial, residential, building, electrical, plumbing, mechanical and temporary trailer permits).
• Total valuation of all construction: $705 million
• Total non-casino and non-condo: $444 million.
• Total casino and condo: $261 million.
• Total new single family homes:$45 million
• Total of new single family homes or rebuilds: 307 new homes
• Total new multi-family (apartments): $72 million
• Total number of new apartment units: 408
Last week I wrote about the Gulf Redevelopment Zone commonly referred to as the “Go Zone” and a residential project I am involved with. I am writing today to update the information I released last week.
The “GO Zone” Act is legislation that was signed into law to help communities on the Gulf Coast rebuild from the devastation of Katrina. The Gulf Opportunity Zone Act of 2005 (H.R. 4440 passed by Congress on Dec. 16, 2005), and signed by the President on Dec. 21, 2005 establishes tax incentives and bond provisions to rebuild the local and regional economies devastated by hurricanes Katrina and Rita. The act is commonly referred to as the "GO Zone” Act.
If you didn’t read my last entry let me recap.
Gulfstream Development Group, LLC., has acquired 1000 residential lots in Bayside Park Mississippi (30 Min's west of Biloxi) and is offering site built homes to qualified investors. (4B, 2B, 1485 Sq, ft.plus lot for $135,880) The opportunity has several positive components which include: Anticipated positive cash flow, Accelerated depreciation of assets for tax purposes (50% first year!), Instant equity position, and probable appreciation as the area is developed. (some believe double digit)
The project in Bayside Park is gaining momentum. Gulfstream Realty & Development, LLC has accepted over 50 paid in full reservations and has nearly 150 investors who have expressed interest in investing in this project who will be receiving additional information including a reservation contract this week.
The bottom line is this. There is a severe shortage of homes in the Gulf Coast area of Mississippi. (See Below). The governor has recently stated that there is an immediate need for 100,000 new homes to be built in the next 12 months. Over 100,000 residents are living in FEMA trailers. The area is in the “Go Zone” which offers tax incentives to investors in this zone. (See below) The product is directed at working class families who work in the area but have no homes to go to.
The following information is additional information to what I posted last week concerning the Mississippi Gulf Coast and may help investors better understand the opportunity being offered by Gulfstream Realty & Development in Bayside Park.
Prior to Katrina the Mississippi Gulf Coast real estate market was showing significant strength due to the expanding Casino market, expanding defense industry and baby-boomers looking for affordable Gulf Coast homes. This healthy economic expansion along the Mississippi Gulf Coast came to an abrupt halt, as Casinos were destroyed, businesses were damaged, and residents were made homeless. Over the past two years the housing market has been slow to recover. There are understandable reasons for this situation.
Following Katrina, many construction firms concentrated on the immediate clean up and repair work. Second, many of the builders were given lucrative construction contracts to repair and rebuild Casinos. Contractors were hired to work around the clock to get the casinos up and running. Builders were attracted to these large projects, while paying little attention to the housing needs of the community. Because of these factors, the true rebuilding of single family homes in the area has only recently commenced. Many believe this is a positive situation for residential builders as the commercial infrastructure has outpaced the residential infrastructure.
The situation is the exact opposite of many markets around the globe where supply has outpaced demand. As we all know this has resulted in negative pressure on pricing and turn time in those over supplied markets. Keep in mind the storm destroyed over 64,000 homes and 47,000 rental properties in Mississippi.
Recent economic studies show that the Mississippi Gulf Coast area is recovering. Statewide, gross state product and employment have surpassed pre-Katrina levels and a reconstruction boom is anticipated for the next five years. Post Katrina employment growth in the state more than offset the jobs that were lost due to Katrina.
Because of the recovering economy in along the Gulf Coast of Mississippi and the desire for residents to return to the area, affordable housing has become the major issue. The recent demand for affordable housing has created significant growth in the local housing market. Many builders and developers are beginning to enter the market, including Gulfstream Development Group, for what looks to be a significant sustained growth market.
For additional information about this investment opportunity please contact me!
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Disclaimer: These reports reflect the views and opinions of the Advisors and are not necessarily the views and opinions of NARREIA.
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