An industrial consultant from South-
east Florida writes that developers are
being cautious about paying too much
for land and having to achieve rents as
high as $50 per sf, and are seeking fi-
nancing alternatives as a result.
“Many developers have had enough of
the brain damage of dealing with banks,
and are turning to private investors
whose monthly draw requirements are
less,” she says. “They are willing to pay
12% for this money, versus 7.5% to a
bank. Investments are usually in the 65%
to 70% loan-to-value range, and interest
is paid monthly to investors.”
The consultant points out that rising
costs for property taxes and insurance
cannot be entirely passed on to tenants,
especially for industrial properties.
“Availability and affordability of in-
surance, to meet the requirements of
lenders and mortgage clauses, will be
challenging for many,” she states. “Spec
building will be minimal and preleasing
will be heavily required, which also
leads to higher equity and lower LTV
for many buyers and developers.
“The challenge is to bring in more re-
gional tenants and expand the higher-
skilled work force. Development will
continue more cautiously with the less-ex-
perienced and less-capitalized developers
not gaining the better opportunities. Life
companies will take up the slack of per-
manent mortgage financing after the
CMBS fallout.”
In other segments of the survey, hiring of young talent and sustainable
workplaces/green building rank highest among issues and areas of particular focus for Florida commercial real
estate companies in 2008. New technologies were a strong second choice,
while promoting diversity and educa-tion/professional development were
third-place favorites.
Lastly, when executives were asked
what decisions they expect to make
when it comes to growing their businesses over the next 12 months, 39% of
respondents indicated moderate investment, 30% chose considerable investment and 25% said little investment.
One managing broker from a South-
west Florida firm comments: “2008 will
be a year to control operating costs as
much as possible.”
A total of 64 commercial real estate
executives statewide responded to the
survey, conducted through early February. At least 20% of respondents were
owners of companies, while 14% were
developers and 11% were financial firms.
The majority of respondents listed
Southeast Florida as their region of geographic focus, while 33% represent
Central Florida, 9% are from Southwest
Florida and only 3% from Northern
Florida. Women accounted for 22% of
total respondents. —REFLA
A One Orlando Centre
800 North Magnolia Avenue
Orlando, FL
GOALS MET. GROWTH ACHIEVED.
BUSINESS PROSPEROUS.
B Park Center
2500 Maitland Center Parkway
Maitland, FL
J
C Maitland Forum
2600 Lake Lucien Drive
Maitland, FL
D Sabal Corporate Center
3625 Queen Palm Drive
Tampa, FL
A
D
G
E Millenia Park One
4901 Vineland Road
Orlando, FL
B
E
H
K
F Independent Square
One Independent Drive
Jacksonville, FL
C
F
I
L
G Capital Plaza
10301 Deerwood Park Blvd.
10401 Deerwood Park Blvd.
Jacksonville, FL
Now what to do about office space?
H 245 Riverside
245 Riverside Avenue
Jacksonville, FL
Eola Capital is a diversified Commercial Real Estate company
based in Orlando, Florida. We sp ecialize in marketing, managing
and leasing office buildings, office parks and mixed-use projects.
With almost 10 million square feet in Orlando, Tampa, Fort
Lauderdale, Jacksonville, Tallahassee, Panama City Beach,
Atlanta, Charlotte, Columbia, Norfolk and Richmond,
we have the experience, resources and leverage
to position your company for success.
I Davinci Court
3720-3740 Davinci Court
Norcross, GA
J 5660 New Northside
5660 New Northside Drive
Atlanta, GA
K Oakhill Business Park
8701 Red Oak Blvd.
Charlotte, NC
L Mallard Creek V
8520 Cliff Cameron Drive
Charlotte, NC
Our business is your business. The Eola Capital team works
with you to identify the perfect fit for your needs whether it’s local
or throughout the Southeast. We ensure quick negotiations,
faster closings and cost savings for your company.
Let us work with you.
www.EolaCapital.com | 1-800-280-1395
Orlando
Tampa
Fort Lauderdale
Jacksonville
Tallahassee
Panama City Beach
Atlanta
Charlotte
Columbia
Norfolk
Richmond
