Ryan Kratz, president of Colliers International Tampa Bay, Central Florida ad Southwest Floridaan
ORLANDO—In a growing market like Central Florida, there is no lack of opportunity. Still, it's important to understand what is especially hot and get on board before the heat cools.
GlobeSt.com caught up with Ryan Kratz, president of Colliers International Tampa Bay, Central Florida and Southwest Florida, to get his thoughts on what's hot and what's fueling the market in part three of this exclusive interview. You can still read parts one and two: Central Florida Seeing Notable Innovative CRE Concepts and Why Mixed-Use Is Rising So Rapidly in Central Florida.
GlobeSt.com: What's hot and what's not for lenders, developers and brokers?
Kratz: Discipline best describes the current market status for being “hot.” Contrary to the 2005-2007 period where underwriting became very aggressive, investors and lenders and developers are all approaching new acquisitions and new developments with significant financial and business plan discipline.
In recent months, numerous investment sales—of all asset classes—have been pulled from the market for not finding the “stretch buyer” willing to pay a super-premium for the asset. Both investors and lenders are demonstrating their disciplined unwillingness to overpay for assets.
Also “hot,” numerous new sources of capital have entered the industry in recent months and years to fill the financing needs of expiring 10-year debt from 2006-2007. In addition to stalwarts of life companies, pension funds, and commercial banks, CMBS loans are once again growing in popularity as are private equity-funded loans for real estate.
GlobeSt.com: What factors are fueling the market?
Kratz: A confluence of several factors, both economic and demographic, are fueling the market. Strong job growth, net immigration to the state, tourism throughout the region, the low cost of debt and equity, healthy tenant and investor and developer balance sheets, market equilibrium of new development supply, and an appetite to take measured levels of risk are all fueling the market.
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