At Florida’s Realtor associations, more revenue, lower CEO salaries

Florida’s Realtor associations enjoyed a stellar 2015. It was a year when most major associations brought in more revenue — yet managed to pay their CEOs less than the year before.

As nonprofits, Realtor associations’ tax returns are public, and their filings for 2015 were divulged this month. A breakdown:

  • At Florida Realtors, revenue rose to $24.2 million in 2015, up 12 percent from 2014. But CEO pay fell by 11.5 percent. New CEO Bill Martin joined the organization in March 2015 and pulled down $374,128, down 12 percent from his predecessor’s pay. Martin also received $470,531 in 2015 from his previous employer, the Michigan Association of Realtors.
  • At the Miami Association of Realtors, revenue rose 4 percent to $16 million. But CEO Teresa King Kinney’s pay fell 17 percent for $386,408.
  • At the Orlando Regional Realtor Association, revenue jumped 39 percent to $7.7 million. But CEO Jacquelyn Stanly’s pay of $261,780 was 33 percent below the combined total for her and her predecessor in 2014.
  • At the Realtor Association of Martin County, revenue rose 21 percent but compensation for the top-paid manager, former Executive Vice President Marilyn Lane, fell 3 percent to $88,789.
  • At the Pinellas Realtor Organization, revenue jumped 18 percent but pay for CEO David Bennett plunged 47 percent to $177,004.
  • At the Jupiter Tequesta Hobe Sound Association of Realtors rose 27 percent from 2014 to 2015. The association announced a merger with the Miami Association in August 2015, and JTHS former Chief Executive Wes Wiggins made just $68,155 $141,4016 in 2014, less than half his 2015 pay.

The Realtor association in Tampa also paid its CEO less in 2015 than in 2014. Association CEOs in Sarasota and Jacksonville saw small raises from 2014 to 2015.

The head of the Realtor Association of Greater Fort Lauderdale was the rare CEO to get a big raise. His salary jumped 29 percent to $325,233, according to the group’s tax returns. The head of the Punta Gorda Port Charlotte North Port Association of Realtors got a 21 percent pay hike.

I’ll post 2015 data for the Realtor Association of the Palm Beaches and the Palm Beach Board of Realtors when their tax returns are available.


Typical South Florida tenant could use that rent check to afford $428,000 home, Zillow says


With South Florida rents skyrocketing, a typical tenant could buy a $428,000 home and maintain the same monthly housing budget, according to a Zillow analysis released Friday.

The median rent in Palm Beach, Broward and Miami-Dade counties is $2,093 a month, enough to cover the monthly expenses associated with a house priced at $427,920. The median home price in South Florida is $299,900.

Credit scores and down payments are a challenge, of course. San Francisco is one of the few cities where a monthly rental payment ($4,235) would not cover the costs of owning the median-value home ($1.17 million).

Nationally, the median rent is $1,416 a month, enough to cover the monthly expenses associated with owning a $289,505 home, Zillow said. The median U.S. home value is $196,500.

Despite legal uncertainty, weed is “great unfolding market,” cannabis expert says

Conference venues don’t come much stodgier than the regal Boca Raton Resort and Club. And conference audiences don’t get more buttoned-down than family office execs (you know, the guys who manage billionaires’ money).

So why was Scott Greiper at a Boca Resort event this week to tell family office managers about business opportunities in the medical marijuana business? Turns out even the squarest investors know an opportunity when they smell it.


Donald Trump’s press secretary: Medical marijuana is OK, recreational weed is very bad

How did weed win in a landslide? Credit the white, rural voters who gave Florida to Trump

“It’s one of the great unfolding markets,” Greiper said in a phone interview (the event he spoke at was closed to the media).

Greiper is president of Viridian Capital Advisors, a New York company that bills itself as “a data-driven strategic and financial advisory firm dedicated to the cannabis industry.” He acknowledges that the pot hype is tempered by the messy reality that reefer remains illegal to Uncle Sam.

“There’s a mix of excitement and intrigue buttressed with uncertainty,” Greiper said. “This industry is stuck between the federal illegality and the state legality.”

While the state-regulated weed industry flourished under President Barack Obama, it’s unclear how the new president will treat pot. Voters are pretty certain that President Donald Trump, unlike Bill Clinton and Obama, never inhaled. And new Attorney General Jeff Sessions exudes a visceral dislike for marijuana.

Even so, Greiper doesn’t expect the new administration to crack down on Florida’s budding cannabis sector. Florida voters in November overwhelmingly legalized medical marijuana, and Greiper said Trump seems more tolerant of legalizing weed for medical use than for recreational consumption.

“I think the medicinal side of state legalization is secure,” he said.

Meanwhile, Greiper sees commercial real estate as something of a gateway investment for folks who want to make a bet on the weed industry without actually taking possession of ganja. Cannabis businesses need industrial space for cultivation and distribution, and retail space for dispensaries.

“Cannabis real estate is a very familiar and comfortable way for investors to come into this game,” he said.

Bank disconnect: Floridians’ favorite for customer service is far from the biggest

Bank accounts are said to be “sticky.” Closing a checking account and opening another is a hassle, so it’s task consumers avoid.

The stickiness theory offers the best explanation for the disconnect between how Floridians rate their banks for customer service and where they put their money.

According to a J.D. Power ranking released Thursday, Fifth Third Bank of Cincinnati is the top bank in Florida. Its customer service grade of 849 was tops among 10 large banks doing business in the state. Yet Fifth Third’s market share is just 1.9 percent, according to Federal Deposit Insurance data as of mid-2016.

Second on the J.D. Power list is TD Bank of Toronto, with a score of 844. Its Florida market share is 2.2 percent.

What about Florida’s biggest bank? Bank of America leads the way with a 19.1 percent market share, yet it ranked last on the J.D. Power rankings, tied with SunTrust and its 8.9 percent market share.


Bank lending rises to all-time high

For Palm Beach County banks, big bucks but fewer branches

Why Realtors hate Donald Trump’s proposal to double the standard deduction

Ben Carson and Donald Trump at Mar-a-Lago in March. Photo by Meghan McCarthy/The Palm Beach Daily News

President Donald Trump on Wednesday revealed more details about his proposed tax cuts, and one provision in particular — the near-doubling of the standard deduction for married couples from $12,700 to $24,000 — has the nation’s largest lobbying group nearly apoplectic.

The National Association of Realtors had yet to respond to Trump’s proposal announced Wednesday afternoon, but a letter last month from NAR President William Brown to Treasury Secretary Steven Mnuchin dropped the verbs “devastating,” “debilitating” and “cripple.” Wrote Brown:

“The [House Republican] Blueprint calls for the standard deduction to be almost doubled from its current levels. The plan also includes the repeal of the deduction for state and local taxes, as well as the elimination of most other itemized deductions. Either of these monumental changes alone would marginalize the value of the current-law tax incentives for owning a home. Unfortunately, the combination of these two revisions would cripple the incentive effect of the federal tax law for all but the most affluent.

“We anticipate two potentially devastating problems in the aftermath of these modifications. First, the impact on the first-time homebuyer could be enormous. For many, the current-law tax incentives make the crucial difference in being able to afford to enter the ranks of homeowners. At a time when the rate of first-time home-buying is well below the average of the past few decades, this could be particularly debilitating for the housing industry and the entire economy.”

“Second, the decimation of the mortgage interest and real property tax deductions would very likely cause a significant plunge in the value of all houses. At a time when the housing sector has not fully recovered from its thrashing during the Great Recession, this drop, even if temporary, could be calamitous. Millions of homeowners could again wake up to learn that the value of their largest financial asset has dived below the amount of debt that is owed on it.”

In an era of rock-bottom interest rates, relatively few homeowners pay enough mortgage interest to gain a significant benefit from the mortgage interest deduction.

Say you bought a $400,000 house in January and borrowed $320,000 with a 30-year mortgage at 4 percent. In 2017, you’ll pay interest totaling $11,648, a sum less than the standard deduction. If the deduction were to increase to $24,000, only the most affluent borrowers would get a tax break from carrying a mortgage.

UPDATE: NAR released a statement panning the Trump proposal’s effect on the mortgage interest deduction, as did the National Association of Home Builders.

“NAHB commends President Trump for tackling tax reform and keeping the mortgage interest deduction as one of two individual deductions, ” Chairman Granger MacDonald said in a statement. “However, doubling the standard deduction could severely marginalize the mortgage interest deduction, which would reduce housing demand and lead to lower home values.”


For middle-class homeowners, mortgage interest deduction becomes meaningless

Sign a contract on Delray condo, get a ticket to White House correspondents dinner

President-Elect Donald J. Trump at Mar-A-Lago on Palm Beach

President Donald Trump won’t be at Saturday’s White House Correspondents’ Association dinner, but if you sign a contract on a Delray Beach condo, you might be.

Senada Adzem, the real estate broker handling sales at The Metropolitan condo development, is dangling a ticket to the dinner to anyone who signs a contract in the next few days. She says the developer will throw in airfare and a hotel room in Washington, too.

Tickets go for about $600 apiece, Adzem said, but the annual dinner has been sold out for months.

“This is a very special, very exclusive event,” Adzem said. “You could not buy a ticket at this point.”

Adzem is marketing units at The Metropolitan at 33 SE 3rd Ave. in Delray. The new building includes 48 units priced at $475,000 to $1.2 million.

Adzem plans to attend the event herself, and she said she scored six tickets thanks to her media connections.

“I do a lot of work with CNBC and Bloomberg,” Adzem said.

The White House Correspondents’ Association is a nonprofit that uses proceeds from its annual dinner to fund journalism scholarships.

Trump attended the event in 2011, and former President Barack Obama spent a full five minutes mocking Trump’s efforts to question Obama’s citizenship.


Ocwen: CFPB enforcement action should be thrown out because federal agency is “unconstitutional”


Ocwen’s West Palm Beach office. Photo by Gary Coronado/The Palm Beach Post.

Ocwen Financial, the embattled mortgage company, joins the long list of critics of the Consumer Financial Protection Bureau.

Former President Barack Obama created the CFPB as part of an initiative to reign in a financial industry that had gone off the rails. Conservatives and Wall Street have repeatedly bashed the CFPB as an anti-business agency, and there’s speculation that it won’t survive President Donald Trump.

“Ocwen believes that the CFPB is unconstitutionally structured because it vests too much unfettered power in the hands of the CFPB’s director and the bureau itself, without any meaningful oversight by the president or Congress,” Ocwen said in a statement.

Last week, shares of West Palm Beach-based Ocwen cratered after states and the CFPB launched enforcement actions against the company, which for years has been the subject of complaints about bogus foreclosures and shoddy practices.

“The Bureau alleges that Ocwen’s years of widespread errors, shortcuts, and runarounds cost some borrowers money and others their homes,” the CFPB said. “Ocwen allegedly botched basic functions like sending accurate monthly statements, properly crediting payments, and handling taxes and insurance.”

Ocwen says the CFPB is overreaching, and the company points to Trump’s unenthusiastic view of the agency as a motive.

“Ocwen gave its full cooperation to CFPB,” the company said in a court filing. “However, in the wake of the election of the new president, CFPB pressured Ocwen to resolve the matter on the basis of wholly unreasonable settlement terms. When Ocwen refused to do so, this lawsuit followed.”

Even if Ocwen defeats the CFPB action on grounds of constitutionality, the company faces other regulatory problems. Florida Attorney General Pam Bondi also filed a suit last week making similar allegations against Ocwen. She’s a conservative and, presumably, no fan of the CFPB.

In another action released last week, North Carolina’s banking examiner led a 20-state cease-and-desist order that barred Ocwen from taking on new business. In the order, North Carolina Commissioner of Banks Ray Grace said he and other state regulators insisted that Ocwen reconcile escrow accounts for 2.5 million homeowners.

Ocwen’s response? Doing so would cost $1.5 billion. But Ocwen did offer to reconcile 457 accounts, a fraction of a fraction of a percent of the loans it services.

“Ocwen has consistently failed to correct deficient business practices that cause harm to borrowers,” Grace said in a statement. “We cannot allow this to continue.”


In sweet deal for billionaire chairman, Ocwen buys Bill Erbey’s house for $2 million premium

Ocwen chairman’s mansion still on market — two years after shareholders bought it for a hefty price

Former Ocwen Chairman Bill Erbey’s paper loss grows to $2.5 billion

Ocwen chair must resign in settlement with New York

Billionaire Wilbur Ross quits Ocwen board

Ocwen spinoff says federal agency considering enforcement action

What big peers you have! For CEO pay, Ocwen compares itself to large companies

Ocwen CEO’s pay nearly doubles in 2016


Former Office Depot CEO’s final pay package includes $13 million in stock awards

Office Depot CEO Roland Smith

When federal regulators nixed a merger with Staples, Office Depot Chief Executive Roland Smith missed out on a $46.8 million payday. Now that Smith has stepped down from the Boca Raton-based retailer, he’s getting a smaller but still substantial paycheck, according to a report the company filed with regulators Wednesday.

The most significant sum comes in the form of stock vesting. Smith took ownership of nearly 3 million shares worth $13.11 millon, Office Depot said. That includes 1.8 million shares for hitting performance targets over the past three years, plus 1.2 million shares he receives for stepping down from the company.

For his work in 2016, Smith also collected a cash bonus of $2.2 million, a salary of $1.4 million, stock awards that could be worth $7.8 million and “other compensation” of $322,113, mostly in the form of personal use of the company plane.

The Fortune 500 retailer named Smith CEO in November 2013. By my calculations, he collected $29 million in realized compensation, including the $13 million in stock vested but excluding the estimated value of option grants and stock grants during his tenure.

Smith stepped down in February 2017. His successor, Gerry Smith, gets a salary of $1.1 million and a sign-on bonus of $1.2 million.


Soft lighting, sleek signs: Office Depot tests “store of the future”

How is Office Depot like the Miami Dolphins? Both are always rebuilding

Office Depot built by one innovation, brought down by another

Developer breaks ground on self-storage center near Palm Beach Outlets

A West Palm Beach-based developer of self-storage units has broken ground on a new property across the street from the Palm Beach Outlets.

SROA Capital last year paid $1.3 million for the 2-acre site at 1620 N. Congress Ave. in West Palm Beach. The three-story, 100,000-square-foot building will include 830 air-conditioned units.

The facility is scheduled to open in early 2018. After recently buying three properties in South Carolina, SROA manages 59 self-storage facilities in five states.

Commercial real estate brokerage Marcus & Millichap has cited a shortage of self-storage space in South Florida.

Prison operator GEO Group leads stocks in first 100 days of Trump administration

Donald Trump on Super Tuesday. (Allen Eyestone/The Palm Beach Post)

Reviews of President Donald Trump’s first 100 days in office have been decidedly mixed. But there’s no debating this fact: Shares of Boca Raton-based GEO Group have been on a tear since Jan. 20.

Investors expect the private prison operator, which runs detention centers for U.S. Immigration and Customs Enforcement, will house more inmates in a Trump administration. Shares of GEO closed Jan. 19 (the day before the inauguration) at $29.05. Monday, they closed at $39.20, up 26 percent.

Plus, the real estate investment trust pays a healthy dividend of more than 5 percent. After a 3-for-2 split, GEO Group trade in the $33 range on Tuesday.

Socially responsible investors might recoil at such a play: The company has been cited time and again by federal and state regulators for horrid conditions at its facilities.