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SETTING SAILSeveral cruise linesare expecting newships between 2011and 2014:

AIDA............................. 3Carnival........................ 2Celebrity...................... 2Costa............................ 2Disney.......................... 2MSC................................ 1Norwegian.................. 2Oceania........................ 2Princess....................... 2Seabourn...................... 1Star Clippers................1Source: Carnival Corporation,CruiseCritic.com

REAL ESTAT E

Mark e t bright spot: condos in Dade■ Miami-Dade condominium sales we re up significantly inSeptember c ompar ed to last year, but single-family homesales and price s we re do wn thr oughout South Florida.

BY TOLUSE OLORUNNIPAtolorunnipa@MiamiHerald.com

As South Florida’s shaky realestate market searches for recov-ery, an investor group’s $1 billionbet on the local condominiummarket is about to be put to the

test.Starwood Capital-led investor

group ST Residential — incharge of more than 1,200 newcondo units in South Florida —launched its ST Miami initiativethis month, announcing plans to

release hundreds of new condounits into South Florida’s fragilemarket in the coming months.

Condo sales were the stand-out figure in the Septemberexisting sales report releasedMonday by the Miami Associa-tion of Realtors.

Existing condo sales inMiami-Dade County rose 36 per-cent in September compared to

the same month last year, with833 sales closed. Month overmonth, sales were down 2.8 per-cent, despite a 5 percent declinein median prices. In BrowardCounty, condo sales slid to 828,down 4 percent from Septemberof last year.

Existing single-family homesales continued their descent inSeptember, falling 6 percent year

over year in Miami-Dade, with582 sales. In Broward, year-over-year single family sales dropped16 percent to 673.

Nationally, the housing mar-ket improved in September, withexisting sales increasing 10 per-cent from August.

Prices are still falling in many

•TURN TO HOUSING, 6B

EC ONOMY

Consumers toting economy tow ard re c overy■ E conomists now expect the most robust consumerspending of the re cov ery in the quarter to c ome .

BY SHOBHANA CHANDRAAND COTTEN TIMBERLAKEBloomberg News

WASHINGTON — Ameri-can shoppers are set to becomethe economy’s new source ofstrength.

Economists lifted estimatesfor consumer purchases in thethird quarter after retail salesclimbed more than forecast inSeptember and the governmentsaid gains in the prior twomonths were larger than previ-

ously reported. Predictions of a3 percent or more increase byRBS Securities and 2.6 percentby Morgan Stanley would meanthe most robust householdspending of the recovery.

‘‘Consumers are taking thebaton as a driver of the expan-sion,’’ said Dean Maki, chief U.S.economist at Barclays Capital inNew York. ‘‘While it is still amoderate recovery, the speed isgoing to be stronger than manypeople think.’’

Even with unemploymentstalled near 10 percent, Ameri-cans are ready to play a biggerrole in the rebound becausetheir incomes are improvingand they have been paying offdebt and rebuilding wealth, saidDean Maki, chief U.S. economistat Barclays Capital in New York.

Investors are already bettingthat consumer spending, whichaccounts for about 70 percent ofthe economy, will be healthierin the next few months thansome economists are predicting.The Standard & Poor’s 500Retailing Index is up 14 percent

this year, and the ConsumerDiscretionary Select SectorSPDR Fund has risen 17 percentcompared with a 6.1 percentgain in the broader S&P gauge.

‘‘The markets can smell arecovery is coming,’’ said JamesPaulsen, chief investment strat-egist in Minneapolis for WellsCapital Management, whichmanages $342 billion.

Macy’s may jump 22 percentin the next 12 months, accordingto the latest average analysts’target-share price. Nordstrommay rise 18 percent, Kohl’s 16.5percent and Target 16 percent.

FORECL OSURES

B anksc ontinueto canc elhearing s■ Although banks said theya re r esuming f or eclosur eactions, they still are callingo ff c ourt hearings.

BY DAVID McLAUGHLINBloomberg News

Banks are still canceling fore-closure hearings and sales inFlorida, the state with the third-highest foreclosure rate behindNevada and Arizona, after Bankof America said it was resumingefforts to seize homes.

Banks had called off aboutone-third of their foreclosure-judgment hearings, and morethan half of their auctions at twoFlorida courthouses as of Mon-day morning, according to courtrecords and personnel. Courtadministrators said the rulesmean that foreclosures wouldnot resume in earnest for at leasta month.

Bank of America and Detroit-based GMAC Mortgage said theywere moving to complete pend-ing foreclosures following com-plaints that home seizuresnationwide were based on faultydocumentation. Attorneys gen-eral in all 50 states, as well as fed-eral agencies including the U.S.Department of Justice, are inves-tigating.

GMAC said it is reviewingforeclosure cases that potentiallyhave defective affidavits in the 23states, including Florida, that usejudicial proceedings for foreclo-sures.

In Miami-Dade County, bankscanceled 100 out of 182 foreclo-sure auctions scheduled forMonday, said County Clerk Har-vey Ruvin. In Palm BeachCounty, banks had canceled 139out of 213 foreclosure auctionsscheduled for Monday, accord-ing to court records. BrowardCounty does not hold sales onMondays.

Citigroup, Deutsche Bank,JPMorgan Chase and Bank ofAmerica were among thoselisted as canceling the sales.

In Dade City, 30 miles north-east of Tampa, banks as of Mon-day had canceled 22 out of 75hearings set for Tuesday andThursday at which they werescheduled to seek court approvalof home foreclosures.

Bank of America, the largestU.S. bank by assets, said Oct. 18that it would start resubmittingforeclosure affidavits this weekin 102,000 pending cases inwhich a judgment is pending.

■ Months after introducing the Epic, Norwegian Cruise Line on Monday announced ordersf or t wo n ew 4,000-passenger vessels, signaling impro v ement in the industry.

BY HANNAH SAMPSONhsampson@MiamiHerald.com

In the latest sign that therecession-rocked cruise industryis staying afloat, NorwegianCruise Line on Mondayannounced plans to add two new4,000-passenger ships to its fleet,due for delivery in April 2013 and2014.

The latest orders, combinedwith a handful of new shipsannounced earlier this year byCarnival for two of its brands,signal a departure from the lull

in activity of the last couple ofyears.

Still, any uptick is likely to begradual, said UBS cruise analystRobin Farley.

‘‘We anticipate a slower paceof ship orders overall in theindustry, as most cruise opera-tors are still constrained by bal-ance sheet and/or a more disci-plined approach over the nextfew years,’’ she wrote in a reportMonday.

In an interview, NCL chiefexecutive Kevin Sheehan said he

too expects a few years of slowgrowth for the industry.

‘‘Most people believe as youget into 2013, things will reallystart to move in the right direc-tion, so I think that timing workswell for us,’’ he said.

Norwegian — which said ithas committed financing in placefrom a syndicate of banks —ordered the new ships for 1.2 bil-lion euros total, or about $1.68billion at the current exchange

•TURN TO NORWEGIAN, 6B

BUSINESS 8BTUESDAY, OCTOBER 26, 2010 EDITOR: JANE WOOLDRIDGE jwooldridge@MiamiHerald.com 305-376-3629 A1

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MARKET REPORT

Stocks up after G20 pledgeStocks rose Monday, sending the S&P 500 Index to

a fourth straight gain, after the Group of 20 nationspledged to avoid ‘‘competitive devaluation’’ ofcurrencies and investors bet the Federal Reserve willannounce further bond purchases next week.

The S&P 500 advanced to 1,185.62, climbing aboveits highest close since May 3. The Dow JonesIndustrial Average rose 31.49 points to 11,164.05.

‘‘Global central banks have set a floor under themarket, and the risk of a double-dip recession isalmost nonexistent at this point,’’ said Oliver Pursche,co-manager of the GMG Defensive Beta Fund.‘‘Traders are not going to fight the Fed after it hascome out and said it will support the market —they’re going to buy.’’

• Higher mileage for trucks, buses: TheObama administration announced new rules Mondayto reduce greenhouse gas and other pollutants byrequiring greater fuel efficiency for big trucks, busesand other heavy-duty vehicles, starting with newmodels in 2014.

The regulations, the first of their kind involvingheavy vehicles, would require increasing fuelefficiency to an average of about 8 miles per gallon,compared with about 6 miles per gallon now.

• AIG chief has cancer: American InternationalGroup said late Monday that Chief Executive RobertBenmosche has been diagnosed with cancer and isundergoing ‘‘aggressive’’ chemotherapy. Benmoschehas overseen the reorganization of AIG for more thana year.

In recent months, the company has taken severalsteps toward repaying more than $100 billion it owesthe U.S. government from a bailout in 2008. ‘‘I feelfine, and I continue to work according to my normalschedule,’’ Benmosche said in a statement.

— HERALD STAFF AND WIRE REPORTS

REAL ESTATE

Mark e t bright spot: condos in Miami-Dade•HOUSING, FROM 8B

sectors of the housingmarket, but ST ResidentialCEO Wade Hundley saidbrand new condos haveavoided that fate this year,even posting increases.

‘‘Relative to all theother markets in the U.S.,Miami is doing well,’’Hundley said. ‘‘We’veseen prices increase about10 to 15 percent since thebeginning of the year.’’

ST Residential becamea major player in SouthFlorida’s real estate mar-ket about a year ago whenit bought a stake in the dis-tressed real estate portfo-lio of failed Chicago-basedCorus Bank. In a public-private deal with the Fed-eral Deposit InsuranceCorporation, ST Residen-

tial bought into a portfolioof condo projects thatincludes Paramount Bay inMiami, Jade Ocean Con-dominiums in Sunny IslesBeach and Tao in Sunrise.

The purchase made STthe second-largest ownerof developer units inMiami’s downtown condomarket, behind JorgePerez’s Related Group,and the public-privatedeal gave the investorgroup the flexibility toadjust pricing levels.

ST Residential is ‘‘com-ing in at a time whenprices have stabilized, andthey’re creeping upwards,in that Brickell-downtownarea,’’ said David Dabby, areal estate analyst withDabby Group Advisors.‘‘The market is weak over-all, but there’s enough

acquisition activity tobegin moving that [devel-oper] inventory.’’

Dabby noted however,that prices are still 50 per-cent below where theywere four years ago, andnot likely to make signifi-cant gains anytime soon,since discounted foreclo-sures and short sales rulethe market.

Distressed propertiesare responsible for morethan half of existing homesales in South Florida,dragging down medianprices.

In September, year-over-year housing pricesfell nearly across theboard, with Broward sin-gle-family homes standingout as the sole exception.The median priced homein Broward sold for

$214,200, up 7 percentcompared to last Septem-ber. Broward condo priceswere down 9 percent to$71,600. In Miami-Dade,condo prices fell 25 per-cent to $99,400, and sin-gle-family home prices fell2 percent to $188,000.

ST Residential plans torelaunch 530-unit Mint onthe Miami River into themarket in December andwill kickstart sales at the346-unit Paramount Bayon Biscayne Bay north ofthe Performing Arts Cen-ter next year, pricing units‘‘at market’’ rates, Hun-dley said.

‘‘We control so muchinventory that if we comein at very low price pointwe could disrupt the mar-ket,’’ he said. ‘‘And wedon’t want to do that.’’

PUBLIC COMP ANIES

O ffice Depot chiefr esigns as of Nov . 1

Office Depot Inc.’s Chairman and CEO SteveOdland is stepping down by mutual agreement withthe board, effective Nov. 1.

Odland’s resignation comes after last week’sdisclosure that the company agreed to pay more than$1 million in penalties to settle a U.S. Securities andExchange Commission investigation. The SECcharged that Office Depot improperly sharedinformation with selected analysts and majorinvestors in 2007.

Odland, who has been CEO since 2005, and formerChief Financial Officer Patricia McKay agreed tosettle the charges against them, without admitting ordenying the findings, for $50,000 each.

Neil Austrian, lead director and former NFLpresident, will step in as interim chairman and CEO.Odland will act as a consultant to the companythrough Dec. 31, Office Depot said.

Office Depot also announced preliminarythird-quarter earnings of $54 million, or 18 cents ashare, on sales of $2.9 billion. The quarterly resultswould compare with a loss of $413 million, or $1.51 ashare, on sales of $3 billion for the same quarter in2009.

— SUN-SENTINEL

• Miami’s ATM fees among highest: Miami banksand thrifts charge the fourth highest ATM fees ($2.56)and second highest bounced check fees ($32.84) in thenation, according to Bankrate.com’s 2010 CheckingStudy, released Monday.

Checking account fees rose to a record highnationwide, the study found. ATM fees jumped 5percent from 2009 to $2.33, on average. The fee bankscharge for using an out-of-network ATM increasedalmost 7 percent to an average of $1.41, and overdraftfees rose 3 percent to an average of $30.47.

Bankrate.com surveyed one interest checkingaccount and one noninterest checking account at thefive largest banks and the five largest thrifts in 25large U.S. markets.

• NCL settles with justice: Miami-basedNorwegian Cruise Line and the Justice Departmenthave reached an agreement in a lawsuit filed onbehalf of cruise passengers who were deaf or hard ofhearing or used wheelchairs on NCL cruises inHawaii. Under the agreement, NCL will ensure suchpassengers have full access to activities on board orduring shore excursions.

NCL will also pay $100,000 in damages to ninepeople with disabilities as well as $40,000 in civilpenalties to the United States.

• Watsco announces earnings: Coconut-Grovebased Watsco Inc. reported earnings per shareincreased 47 percent to 97 cents per diluted share forthe quarter ending Sept. 30. Operating incomeincreased 54 percent to a record $64 million duringthe same period. Net income improved 49 percent to$31 million.

For the year to date, operating income more thandoubled to a record $144 million with an operatingmargin of 6.6 percent. The company distributesair-conditioning, heating and refrigerationequipment.

• DJ Irie, Levinson join forces: FortLauderdale-based Levinson Jewelers has partneredwith celebrity spinner DJ Irie, who will design asignature line of jewelry called Peace thru Music.

• Tribune modifies bankruptcy plan: PublisherTribune Co. — owner of The Sun Sentinel in FortLauderdale and The Sentinel in Orlando — filed amodified Chapter 11 plan that would allow seniorlenders, owed $8.6 billion, to recover about 71 percentthrough cash plus all new stock. Other unsecuredcreditors of the parent Tribune would receive 35.2percent cash or an initial 32.7 percent plus the abilityto participate in litigation recoveries.

CRUISES

Is cruise ship market shaping up?•NORWEGIAN, FROM 8B

rate. Sheehan said thecompany’s performance,improving economy andfavorable pricing from theshipyard made it the righttime for the orders.

‘‘Now that we’ve doneall the hard labor andpushing and reinventingand rationalizing and engi-neering that needed to bedone, we’re now at thepoint where the businessis ready for new growth,’’he said.

Industry watchers viewthe ship orders as a movetoward attracting equityinvestors. Though it i s aprivately held partnershipbetween Genting HongKong and two privateequity firms, the companywill release its third-quar-ter earnings report onTuesday.

Though similar in size,the new ships will featurea sleeker shape than the$1.2 billion, 4,100-passen-

ger Epic, which enteredservice earlier this year.The Epic’s boxy exteriorhas been the subject ofsome derision, deemedbulbous by some and evendownright ugly by others.

‘‘We did modify thelook and feel of the ship toa more traditional ship,’’Sheehan said.

Good thing, said Stew-art Chiron, a Miami cruiseexpert and CEO of Cruise-guy.com, noting the Epic’sexterior and controversialbathroom design.

‘‘The ship has itsissues,’’ he said. He said heexpected NCL to ‘‘greatlyimprove the looks and theflow and the design’’ withthe new ships.

What won’t change isthe cruise line’s emphasison ‘‘freestyle’’ cruising,offering multiple dininga n d e n t e r t a i n m e n toptions.

For the new ships, thecompany is returning toGerman shipyard Meyer

Werft GmbH after a rockyexperience with the yardthat built the Epic, STXEurope in France.

T h e c o m p a n y ’ sannouncement potentiallysignals an end to a recentlull in new cruise shipordering.

Although several cruiselines are launching majornew ships — includingRoyal Caribbean’s Allureof the Seas and Seabourn’sSojourn, both coming toFort Lauderdale inNovember, and the newCelebrity Eclipse, comingto Miami this fall — ordersfor several years out haveslowed from previousyears, when many linesintroduced a new shipevery 12 months.

Carnival’s German line,AIDA Cruises, recentlysigned an order withMeyer Weft for a 2,192-passenger vessel to enterservice in 2013. Earlier inthe year, Carnival alsoordered two new ships for

its Princess Cruises brandto be delivered in 2013 and2014.

In an earnings call lastmonth, Carnival Chairmanand CEO Micky Arisonsaid he had no plans torush into any more ordersat the moment.

‘‘I don’t expect us to bedoing anything betweennow and the beginning ofthe year,’’ he said. ‘‘Butwho knows?’’

Caro lyn SpencerBrown, editor of Cruise-Critic.com, said the time isright for new orders —because timing was wrongover the last couple ofyears.

‘‘I think everybody’sgoing to be ordering. Theyhave to, because they allstopped ordering,’’ shesaid. ‘‘The way that thatmarket works is thatcruise lines have to befresh and new and havesomething to promote,something that’s differ-ent.’’

TRA VEL

BU GS BITING INTO BIG APPLE■ Guests are cancellingplans to visit New YorkCit y, but officials saysightings of critters arer are.

BY SARA KUGLER FRAZIERAssociated Press

NEW YORK — NewYork City’s bedbugs haveclimbed out of bed andmarched into landmarkslike the Empire StateBuilding, Bloomingdale’sand Lincoln Center, caus-ing fresh anxiety amongtourists who are cancelingvacations planned for theheight of the holiday sea-son.

Some travelers who hadarranged trips to NewYork say they are worriedabout staying in hotels andvisiting attractions as newreports of bedbugs seem topop up every few days.And officials in MayorMichael Bloomberg’sadministration are con-cerned about the effect onthe city’s image and $30billion tourism industry.

The discoveries of pestsat high-profile places areoften not full-blown infes-tations, or even in publicareas. Bloomingdale’s

reported finding exactlyone bug in the famousdepartment store, theEmpire State Building hadthem in the basement andLincoln Center’s were in adressing room.

But those reports, alongwith bedbug discoveries inmovie theaters, hotels andclothing chain stores, arecausing skittish travelersto call off trips plannedmonths ago.

Industry professionals— who have privately toldcity officials that they arenervous about bedbugshurting New York’s repu-tation — say publicly thatthey are not aware of anybedbug-related cancella-tions. But several would-betourists say they are abort-ing their trips here becausethey fear the bloodsuckingpests.

‘‘It sounds like you canget them anywhere, anytime of day and not know ituntil you get home,’’ saidPatty Majerik, from Balti-more.

‘‘I’ve got four peopletraveling on a train, incabs, going to stores andtheaters, and they could bein any of these places? I

hate to say it, but I doubtwe’re going to come thistime,’’ Majerik said.

Suzanne Baldwin saidshe is forfeiting moneyspent on reservations for aNovember trip to NewYork City from her homein Florida. She had alreadygrown accustomed tochecking hotel rooms forbedbugs — and has doneso in New York before —but she is now over-whelmed at the idea thatthe bugs have spreadbeyond hotels.

‘‘We thought long andhard about this trip,’’ shetold the AP in an e-mail.‘‘However, we decided,knowing we would losequite a bit of money fromnonrefundable tickets, itwas not worth the worry.’’

Bloomberg said he wasconcerned about the effectof bedbug hysteria on thecity’s reputation.

‘‘You don’t want any-thing that would dissuadepeople from coming here,’’he told reporters. ‘‘Hope-fully these things come andgo, and this will goquickly.’’

Bed bugs are definitelyon travelers’ minds —

including in South Flori-da’s hotel market. Type‘‘bed bugs’’ and ‘‘Miami’’ or‘‘Fort Lauderdale’’ into thepopular travel review sitetripadvisor.com, and angryreviews pour out of guestsclaiming bed-bug bites athotels throughout theregion.

But whether fueled bymedia coverage or actualinfestations, tourismbureaus in Broward andMiami-Dade said Mondaythey had not heard of anycancellations due to bedbugs.

Sightings of the rust-colored bugs, which areabout the size of an appleseed, have surged in recentyears. It is not known whatcaused their suddenspread, but experts havetheorized that an increasein global travel and thebanning of certain pesti-cides may be partlyresponsible.

Bedbugs are famouslydifficult to eradicate; theyhide in many more placesthan beds and can go for ayear without feeding.

Miami Herald staffwriter Douglas Hanks con-tributed to this report.

THE BUSINESS REPORT | BUSINESS STARTS ON PAGE 8B >>>

6B TUESDAY, OCTOBER 26, 2010 A1 MiamiHerald.com THE MIAMI HERALD

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ASSOCIATED PRESS

BEDBUG ANXIETY: Tourists afraid of getting bitten are canceling holiday plans to visit New York City.

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