My observations about life in Israel

After spending two weeks in Israel, I learned a lot about what it’s like to live there. While there are so many things I have yet to grasp about life in the Holy Land, let me share my observations - both big and small - with you.

The condo boom followed me! There are more construction cranes in Israel than in Miami. Everywhere I looked, they were building something, especially in central Israel. I was told that many Jews from Europe are moving to Israel, or at least buying condos in preparation for a move, for personal safety reasons. Many wealthy Jews want to own a piece of Israel, even if they don’t live there. All of this is great for the construction industry, but these new condos are very expensive for the average working-class Israel. Sound familiar, Miami?

Israeli cities are pretty dense. Most of them have busy city centers and multifamily buildings packed together, a very urban feel. However, there are large open spaces and agricultural areas between the cities. That’s partly due to the cities being construction where the government built the water supply. Unlike in Florida, you can’t just dig a well anywhere and find water.

How scare is water? We really take it for granted in Florida. The one home I visited that had a full grass yard and a pool had a water bill of $1,000 a month in the summertime. It’s a luxury. So is a garage.

Despite the dense cities, Israel has many parks. The newer cities are well-designed with frequent pocket parks, often with playground, outdoor fitness equipment, and combo basketball/soccer courts. BTW, I saw the kids using those courts only for soccer, not basketball. Those parks make the neighborhoods great for kids. (Are you listening, South Florida?)

Israel also has many small, neighborhood markets. People often walk a few blocks for their groceries.

Paseos (alleys between streets) save time while walking to parks, markets or visiting neighbors. Not every square foot has to be used for development. (Pay attention, South Florida.)

Instead of traffic lights at every corner, Israel has many roundabouts. Traffic flows through them fairly smoothly, as long as people obey the rules.

Israel has solar power, sort of. Most homes have solar-powered water heaters on the roof. The good news is this saves on electricity. The bad news is that you shouldn’t take too long in that hot shower.

When I visited Eilat on the southern tip of Israel, I was pleased to find it had city-wide free WiFi. That’s a great idea for a tourist spot. It also has a city-sponsored app. This Red Sea resort is so much fun.

Most malls in Israel had indoor entertainment activities for kids (for a fee, of course.) These ranged from indoor playgrounds to the ice rink and roller coaster in the Ice Mall in Eilat.

There's serious security at malls, and at many other public places in Israel. They don’t have flashlights. These guards are armed and they are constantly looking for suspicious people, often asking questions and inspecting bags. It’s just a part of life.

From Tel Aviv to Eilat, Israel has great beaches. If you are a surfer, Herzliya had the best waves. Eilat has the best diving because the coral reefs are right off the beach. Most of the beaches have great restaurants, including South Beach’s food stand on the sand in Herzliya.

Not all the food is kosher. Most malls have a kosher McDonalds (home of the Big American) and a non-kosher McDonalds (home of the Big American, with cheese). But if you eat kosher, Israel is culinary paradise.

Most restaurants don’t have napkin dispensers and many don’t have ketchup dispensers either. You have to ask. Israelis must be cleanly eaters. Do they have menus in English? Only in tourist spots. But many Israelis know some English.

Driving around, I saw huge office towers branded by tech companies like Microsoft, Yahoo! and Google. Israel is clearly a tech hub.

Be careful following Waze for directions while driving around. This app, which was created in Israel, recommends the shortest route but not always the most secure route. Some neighborhoods aren’t friendly to certain religious groups or ethnic groups, and some neighborhoods shouldn’t be driven through on religious holidays. I recommend traveling with someone who knows Israel.

Speaking of driving, I was amazed by the array of international cars in Israel. It has many brands you won’t find in the United States. That will be the subject of my next blog.

There were so many places in Israel I could have seen but I didn’t get a chance to in my two weeks there. Granted, this was my third visit. I’m looking forward to seeing Israel again.

The Panama Papers: Money laundering loopholes are nothing new

No one who’s been paying attention to the real estate or financial markets should be surprised over the off-shore tax havens and money laundering schemes uncovered by the release of the Panama Papers. World governments have been aware of these loopholes for years.

The only question: Will the publicity storm prompt the United States and other governments to stop the flow of dark money?

Hundreds of journalists around the world [sadly, not including me] worked through the International Consortium of Investigative Journalists to comb through about 11.5 million leaked documents from the Panamanian law firm and corporate register Mossack Fonseca. Among the 214,000 offshore companies it listed, some were used to conceal from the public and from governments that politically connected individuals, known criminals and people who had no apparent sources of wealth controlled significant amounts of money. In some cases, these offshore companies owned real estate, including in Miami.

Of course, not all of these companies were registered offshore. States like Delaware, Nevada and Wyoming also allow LLCs to be registered without listing a managing member.

The fact that this is going on isn’t news. The Panama Papers made headlines because it named names.


Hey, how did that hair dresser from South America buy a $1 million condo on Brickell? You can't ask those questions if you don't know who's really buying.
Law enforcement has known since the 1980s that dirty money found its way into Miami real estate through shell corporations. Watch the documentary “Cocaine Cowboys” to see how drug money built much of this town. In 2013, I wrote the story “Condos, Cash, and Criminals” in the South Florida Business Journal addressing the concerns of many experts that dirty money was contributing to the surge of cash real estate deals.

Politicians and law enforcement have known this was a problem for decades. And yet, it has persisted. Who knows who really owns our real estate? Many people would rather not know, as long as they're making money off it.

Having covered both banking and real estate in South Florida, I can tell you that I often run into companies with no clear path of ownership. Sometimes they’re registered in Delaware, or offshore in places the Isle of Jersey or the British Virgin Islands.

Other times, they’re Florida-registered LLCs but the managing member clearly isn’t the owner. There’s no requirement that Florida LLC’s list the owner, only a person to handle the company’s affairs. Sometimes this is innocent, such as a famous athlete who makes his attorney the manager of the LLC because he doesn’t want to be bothered at his home.

It could also be used by money laundering drug dealers to set up straw managers to buy real estate through. There’s really no way I can tell that the LLC isn’t funded by terrorists, drug dealers or corrupt officials.

Some homes are bought by trusts. It’s extremely difficult for the public to know who controls them. You just have to trust that the lawyers who set them up did their due diligence.

As we saw in the Panama Papers, there’s a temptation for incorporation law firms to think money first, due diligence second. Plus, law firms don’t face the strict “know your customer” and “source of funds” rules that banks must comply with.

U.S. authorities could ask more of incorporation law firms. Federal and local governments could take measures to require ownership disclosure for LLCs. Authorities have started asking title companies to disclose the LLC owners in $1 million-plus deals in Miami and $3 million-plus deals in Manhattan

Until authorities start taking aggressive measures to promote disclosure, it’s clear they aren’t serious about addressing this problem.

It’s not so easy, though. Miami, New York and many other international cities are enjoying windfalls of foreign cash that have spurred building booms. That’s created jobs and increased property taxes, although some argue it’s also made real estate less obtainable for working families. I have a feeling that some, or perhaps most, Miami condo projects would fall apart if these loopholes were closed.

Should we start turning money away because we don’t trust the source? Or do we turn a blind eye?

New Wynwood could price out hipsters who made it thrive

In Miami real estate, you either sprint or fall on your face. There's no such thing as steady growth. So goes the case with Wynwood.

Creative planning by artists and local investors transformed the neighborhood from empty warehouses into a district with stunning street art, popular restaurants and bars and emerging retail.

It's expected that property values would grow to reflect the promise. Instead, many recent deals have given Wynwood higher valuations than established retail markets in wealthy areas, such as Coral Gables and Las Olas in Fort Lauderdale.

My print edition centerpiece in the South Florida Business Journal explores where the neighborhood is heading.

The fear of many is the higher property valuations will lead to expensive rents that will price out the artists and local businesses that made Wynwood so successful. I interviewed several property owners that said they would keep key local groups like Panther Coffee and artists, but they're investing tens of millions of dollars because they expect a substantial return from new tenants. Will those big money tenants change the hipster character of Wynwood? Can they sell enough goods to justify $80 per square foot in rent?

Certainly, the new zoning that Miami could finalize for Wynwood will increase the ability of developers to build apartments, condos and hotels there. They're targeted the young, creative professional class. However, it's important that homes in Wynwood are priced below those in areas such as downtown, Brickell and Edgewater. Construction costs aren't going to differ much between those neighborhoods so Wynwood developers will need to find a way to be less expensive for residents.

I'll tell you this about Wynwood, bring it up to any real estate professional in Miami and they're either all in or they won't touch it. There's no such thing as middle ground, or a steady pace, in Miami.

After many years covering banking, it’s time for a change in my beat

This is my last couple weeks on the banking beat. I’m going to make official what I’ve been doing for a while, covering real estate for the South Florida Business Journal. Only this time, it’ll be my main focus and I’ll hand off banking and insurance to a talented reporter.

It was a tough decision for me. Everyone who works with me knows how passionate I am about banking. The dozens of South Florida banks are like my chicks. I’ve followed them starting in 2008 as the recession began, watching some grow, some fall on the dreaded FDIC Friday after 5 p.m. There’s nothing like sitting on “bank death watch” with my obit for the ailing institution all ready to rip.

There’s not nearly as much of that now. Only one Florida bank has failed in 2014. Action hasn’t been lacking, with M&A activity and investigations, plus some heartwarming stories of loan growth. 

As much as I enjoyed this beat, I realized that I can’t advance unless I let it go. If I want to elevate my career, I can’t be married to any beat. I have to embrace new challenges.

That’s where real estate comes in. It’s the headline beat at SFBJ. For the better part of a year it hasn’t been fully staffed. While I’ve filled in with regular real estate stories, I haven’t given it my full attention. That’s about to change.

I’m going to explore this new condo craze and what it means for the local population. I’ll study housing affordability, the rapidly changing neighborhoods and go behind the deals.

Oh, and don’t forget Foreclosure Roundup. I’m not letting that go.

I’m hoping this change will make things better for me all around. Covering all these beats has been way too much work and it’s bled into my evenings. It’s taken away from family. It’s limited the time I can spend working on my next novel, and promoting my recent work Mute.

There’s just one matter to settle before I move on from banking. I’m heading to Miami federal court to cover the SEC vs. Alan Levan.

How’s that for a final salvo?