WEDNESDAY, MAR. 16: “Half this story is emotional, the other half is financial.”

This from Buddy Rego, president of Rego Sotheby International Reality, who said most of the focus has been on the emotional side.

Tucker’s Point wants to add 78 homes and 70 hotel rooms through a SDO.

Both he and Kevin Cross, president of Whitecross Development, which was behind The Hamptons and Rosemont City Place, said whether or not having additional properties to sell will be a lifeline for Tucker’s Point may depend on how quickly the economy recovers.

Mr. Rego said the island’s most expensive properties are currently selling well.

“I’ve been personally involved in the last two to five months in significant high end properties — not at Tucker’s Point, but at other locations. It’s the highest number we’ve traded in years. There seems to be some interest at the ultra high end of the market right now — the highest end.

He asked: “Are there a lot of non-Bermudians looking at the $3 million to $5 million range? Not particularly at the moment.

“The very high end has traction, but the middle high end doesn’t. The success of what else goes there really depends on the product… given the state of real estate sales today.”

He said there’s no way Tucker’s Point would build all 78 homes at once as that would flood the market and depress prices.

Mr. Rego said that if Tucker’s Point were to build them all at once it would provide a “12 to 15-year supply” based on current sales of properties in that price range.

He added only 232 real estate transactions took place in 2010 and just 110 of them were single family homes, with the rest being condos, land and commercial properties. He said in terms of volume, the market is depressed as there were 383 property transactions in 2009 and 590 in 2008.

Mr. Rego said almost all the homes at Tucker’s Point were owned by non-Bermudians as vacation homes.

“Which is fine and great, that’s what we want.”

Mr. Cross said the whole financial issue “is more complicated than people really full understand”.

Although “in these tough economic times it’s going to be tough to sell any homes” Mr. Cross believes that by being able to do so, Tucker’s Point will be adding much needed “viability into the long-term so that when, and if, there is a market to sell homes, that they are prepared and ready.

“Where they stand today with the debt load they have built up, primarily due from the hotel, they need all the help they can get financially to be viable long-term.”

Mr. Cross said unfortunately for Tucker’s Point, the second high-rise tower with fractional units did not sell out.

He said Tucker’s Point had the unfortunate luck to finish right at the time the Bermuda real estate market cooled off.

Mr. Cross said with air arrivals way down, the hotel was not able to deliver the guests to help make it sustainable.

“The hotel is one of the prime drivers of those losses, which is a real shame for the country because it’s the first new hotel product brought online in four decades.

“It’s such a beautiful development and they delivered in very poor time from an economic standpoint.”

He said the building of new homes could potentially help the hotel portion of the development

 “If you lived there and your mother-in-law comes to visit or your friends come to visit, where’s the logical place for them to stay if you don’t have enough room in your home? You’d have them stay at the hotel and you’d go to the beach club together. It all helps drive the viability.”

 

Special report: Tucker's Point