David J. Schwartz, Managing Principal, Management Consortium
I think the biggest impact on commercial real estate in 2008
will be the tightening of lending requirements for developers
and end users of real estate, such as condo-office buildings,
lodging assets and mixed-use properties. We have and will
continue to see that trend in the arena of condo-hotels and re-
sorts as well as traditional hotels, fractional and timeshare
projects.
Moses L. Salcido, Senior Development Manager, Panattoni
Development Co. LLC
In one word, housing will have the greatest influence on
Florida’s economy this year and beyond. It is one thing to
look at property inventories, it is quite another to consider the
overall ripple effect on other segments of the industry, in-
cluding capital markets, direct business impacts, office and in-
dustrial space and retail, which almost always follows
residential trends. Rising development costs, which had been
affected by both labor scarcity and material demand, have
receded.
Scott Stephens, Principal, HREC Investment Advisors
For the hotel industry, it is certainly the availability of fi-
nancing and the way deals are being underwritten. Lenders
are being very cautious with regard to hotels. Spreads have
increased, loan-to-value ratios have decreased, debt-coverage
ratios have increased and, consequently, it is causing values to
go down.
Michael Stein, Managing Director, Aztec Group Inc.
I believe the biggest issue in the commercial real estate in-
dustry in Florida will be the residential real estate crisis,
specifically the issues of condominium overbuilding, lender
foreclosures, tightening capital markets and the subprime
meltdown.—REFLA
If you have a question you’d like to “Ask the Advisors,” e-mail it
to Carl Cronan at ccronan@remedianetwork.com. Questions and
responses will appear in future issues of Real Estate Florida.
