Despite a recession that has taken a devastating toll on every commercial sector, participants in a Town Hall Meeting said they believe the state will recover in the next upward cycle. When that happens, however, is anyone's guess.
"The quality of life and the job growth will return to Florida. It may not happen as quickly as we hope," said Jay Caplin, managing principal of Steelbridge Capital. Other Town Hall panelists included Michael Fay, president of Colliers Abood Wood-Fay; Jack Lowell, vice president of Flagler Real Estate Services; Pike Rowley, president and CEO of Rowley Group LLC; and Orlando Sharpe, president of Sharpe Project Development.
Gene Berman, senior vice president and managing director of Marcus & Millichap', moderated the panel discussion and noted that concessions are driving the current office market in particular. Besides free rent at the front end of leases, panelists observed that tenants can also negotiate for long-term rents that are cheaper than they have been in many years.
"Any tenant who is not out there doing a 10-year deal or better is missing out on an opportunity," Lowell said. He also noted that office demand is being adversely affected not only by rising unemployment but shrinking space per employee.
Fay noted that commercial real estate in South Florida will have to work with a number of issues over the next three years, including resistance by banks that won't sell top-tier properties until pricing improves. "You're going to have to be really creative on how you work this out," he said of the trend.
Sharpe advised commercial property owners to start thinking longer term in holding onto assets. "Investors need to stop looking at quarterly returns," he said.
Caplin, who joined Steelbridge Capital in July after a lengthy career at Cushman & Wakefield, told the audience that the Miami-based firm is seeking investment opportunities, noting that the Tampa Bay and Orlando markets are faring better than South Florida lately. Yet he cautioned short-sale seekers about dealing with special servicers that do not seem responsive: "They're not in the customer-service business. They don't owe you an answer."
(Additional coverage of RealShare South Florida will appear Friday on GlobeSt.com and on the Commercial Grove blog.)
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
