Senior Staff Writer-
Orlando Business Journal
Central Florida’s commercial real estate market is definitely on the upswing — but speakers at a University of Central Florida conference said there are still a few things to look out for in the near future.
The Dr. P. Phillips School of Real Estate & The Dr. P. Phillips Institute for Research and Education in Real Estate on May 7 hosted “Here Comes the Sun,” a day-long conference to highlight emerging opportunities in real estate. The event featured a keynote address by James Seneff Jr., executive chairman of CNL Financial Group Inc.; a project update by the city of Orlando’s Thomas Chatmon, executive director of the Downtown Development Board; and a group of real estate executives in a panel discussion on the latest opportunities in Central Florida’s industrial, office, retail and health care/mixed-use sectors of real estate.
Seneff focused on ways companies can grow their businesses even during down times by looking at the long-term ramifications of their actions — rather than using the short-sighted method of jumping on hot real estate trends and then falling during the down part of that cycle.
“Don’t follow the herd; be a contrarian,” said Seneff, whose own firm was built by capitalizing on real estate cycles — buying when everyone else is selling and vice versa. “You may think you have a great real estate deal, but ask yourself, ‘what can technology do to that?’ ”
Chatmon talked about the newest projects underway and in the works in downtown, including the status of the$200 million Orlando Magic entertainment complex.
Meanwhile, panelists Jim Heistand of Parkway Properties Inc. (NYSE: PKY), Jody Barry of Florida Hospital, Steven McCraney of McCraney Property Co. and Stephen Brandon of Brandon Partners shared the successes each of them experienced through the recovery.
Each of them also talked about things that could stunt the growth we’ve been seeing in Orlando’s commercial real estate market. Here’s what they had to say:
Heistand on office: If you are trying to place capital right now, it’s pretty challenging because we just don’t know how much technology will influence office market needs in the next 20-30 years.
Barry on health care/mixed-use: There are still some uncertainties around the Affordable Care Act. Investors are holding back on long-range planning because of that.
McCraney on industrial: I’m concerned about cap rate compression. Things in some ways are returning too quickly. (Explainer: Capitalization — cap — rates are used in commercial real estate investment sales to estimate what a property can yield in value in its first year.)
Brandon on retail: There’s a lack of innovation from retailers. The growth in e-commerce is challenging retailers to find a niche so they can find a way to survive against the online competitors. They have to make sure they engage, educate or entertain their customers to keep them coming back to brick-and-mortar store.