Ep. 141 Brian Bailey: A Federal Reserve Commercial Real Estate Expert’s Outlook on Florida

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As part of the Federal Reserve’s wide scope of responsibility and oversight, the eight regional branches are tasked with monitoring residential and commercial real estate markets; tracking trends and data in order to more accurately adjust to market fluctuations affecting the economy. These studies provide hard data for the Fed to make economic adjustments, but they can also be a great gauge for real estate investors. Any successful investor will tell you that the ability to forecast changes in the real estate cycle is vital. As much as knowing your market and asset class, an awareness of other economic factors is important for mitigating investment risk.

The Federal Reserve Bank of Atlanta serves as the central bank’s regional authority for the southeast. It tracks real estate markets for the region, including Florida and offers comparisons on a national scale. Our guest this week is a commercial real estate expert with the Fed’s Atlanta branch.

Florida commercial real estate outlookBrian Bailey is a Senior Technical Expert in the Supervision and Regulation Division of the Federal Reserve Bank of Atlanta. Specializing in commercial real estate, Brian tracks and analyzes emerging trends in the southeastern region and provides thought leadership on commercial real estate and guidance for the central bank.

Brian brings a diverse background in commercial real estate finance and acquisitions to the Fed. He has over 15 years of experience in commercial real estate finance, having managed financing for millions of square feet in real estate holdings for several large-scale equity and development firms. Brian received an MBA with concentrations in Real Estate and Finance from the University of Florida and has earned a CCIM designation.

You won’t want to miss this commercial real estate outlook on Florida!

 

 

 

Ep. 138 John McNellis: Retail and Multifamily Investors Won’t Want to Miss This Development Outlook

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Where is retail heading?

development outlookThis is a question we’ve gotten a lot lately from our listeners and investors. With the rise of online shopping through Ecommerce options like Amazon, we’ve been seeing some rapid tightening in retail development across the board. With big-box retail winding down and shopping center investments getting tight, many investors and developers are wondering what comes next.

Our guest this week is an expert on spotting development trends and cycles. John McNellis is a developer, speaker and author. Founder and President of Mcnellis Partners development firm, John has been developing a variety of real estate for over 30 years. Although retail and multifamily have been his primary asset classes, John has development experience in several asset classes.

This episode, John joins us to discuss the development outlook for retail and offers advice for investors looking to make the transition to development.

Development Outlook

  • Retail markets challenged throughout the U.S.
    • Over-building of retail
    • Influx of online shopping
  • Retail going through downsizing cycle
  • Industrial market seeing benefits from Ecommerce boom

Approaching Development

  • Residential: best to start with land and build up
  • Retail: finding a good tenant for anchor is best strategy
  • Risk-management is key to long-term success
  • Rule of thumb: look for investments that earn 2% above cap rate
  • Don’t build on spec

Transitioning to Development

  • Find an experienced partner when transitioning to large or mid-size multifamily developments
  • For first-time developers, find a broker in your area that specializes in the asset class you want to develop
  • Approach the public with a project before taking it to city officials

Investment/Development Advice

  • Development follows job growth
  • Urban Land Institute (ULI) is a great resource for developers

Resources

 

 

 

Ep. 136 Brian Willis & Gerry Tierney: Learn How Transit & Technology Changes Will Affect Your Property!

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automated transitTechnology is rapidly changing the way we look at the future. Innovations like automated transit are quickly nearing practical realities. In Tampa Bay, we’re seeing advancements in automated transit already, with the area being positioned as a proving ground for automated systems. Automation and other technologies will bring major changes to existing infrastructure.

No industry will be affected by these impending technologies more than real estate. From multifamily to retail, emerging technologies like automated transit will require an entire rethinking of real estate design and development. Urban planners, architects and developers need to consider these effects and start planning accordingly.

This episode, we discuss these changes on a local and national level. We look at what game-changing technologies are emerging and what urban planners and developers are doing to address these changes now.

Meet Our Guests

Tampa Bay sustainable transitBrian Willis is real estate attorney with Shumaker Loop & Kendrick. He is a leading advocate for integrated and sustainable transit in Tampa. Brian brings on-the-ground knowledge of the cutting-edge technologies here in Florida and how Tampa Bay is taking steps to integrate them into current real estate design and development.

 

real estate designGerry Tierney is an Associate Principal at Perkins + Will. Based out of San Fransisco, Gerry is a leading force for automated transit and mobility and adapting real estate design to suit these changing needs. He serves as the Co-Director of Smart Mobility Lab and has Collaborated with both UCLA – Berkeley and MIT in sustainability research.

Technologies Impacting Real Estate

  • Automated transit / autonomous vehicles
    • Autonomy integrating in public transit by 2020s
    • Subscription-based autonomous car ownership coming down the line

Future-proofing Current Real Estate Design

Urban planners, architects and developers needs to consider how current layout and designs will play into emerging technologies.

  • Adaptive Use
    • Big-box retail stores
    • Shopping malls
    • Existing parking structures
      • Vertical Parking vs. Horizontal
      • In-fill
      • Mechanized parking
  • Urban Design & Planning
    • Current developments built to accommodate automated transit
    • Changes to grid structure and street layouts
    • Rethinking asset classes
      • Industrial
      • Office
      • Multifamily
      • Retail

Resources

  • Contact Gerry at gerry.tierney@perkinswill.com or (415) 546-2933
  • Contact Brian at (813) 221-7165 or on Twitter @BrianWillisTPA

 

 

Ep. 133 Greg Ruthven: The I-4 Corridor is a Hot Market for Industrial Investors!

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Florida’s I-4 corridor has long been a focus of industrial investors and developers. Connecting Tampa, Orlando and the east coast, the I-4 corridor serves as major transit artery. With recent arrivals of big names, like Amazon and Walmart committing to massive industrial developments, interest in the market has only been growing among industrial investors.

central florida industrial investorsGreg Ruthven is one man who knows what makes the I-4 corridor such a prime market for industrial development.

The Ruthvens, a family-owned and operated business started by Greg’s father, are one of the largest developers and owners of industrial real estate in and around the I-4 corridor. They currently hold 85 warehouse and industrial properties, totaling over 3 million square feet.

This episode, Greg tells us why he loves Central Florida and why the area is such a hot market for industrial investors.

Industrial Investors Love the I-4 Corridor

  • I-4 is major transit artery
  • Central Florida has a lot of available open land to accommodate large developments
  • 10 million people live within 100 miles of Lakeland, FL

Florida Industrial Market is on the Rise

  • Shift towards E-commerce is driving logistics and distribution demand
  • Major companies are consuming warehouse and distribution space
    • Amazon
    • Walmart
    • Major companies drive industrial demand, attracting smaller companies

About The Ruthvens

The Ruthvens have been building and leasing warehouse and industrial space in Central Florida since 1957. Based in Lakeland, the Ruthvens have deep roots in the community and specialize in a commitment to individual warehouse space needs. They build, lease and sell industrial space ranging anywhere from 1,000-150,000 SF.

To learn more about The Ruthvens and their services, visit their website.

“If you need warehouse space, you call the Ruthvens”(863) 686-3173

 

 

 

Ep. 123 Chris Nebenzahl & Doug Ressler: Tracking Investment Market Data Made Easy!

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Tracking Investment Market Data

tracking investment market dataFinding a real estate market that fits your investment goals seems to be getting tougher and tougher. With markets tightening up across the state, investors are starting to feel it. Now, more than ever, investors need to be tracking investment market data – looking for trends and analyzing data to find viable markets.

Investors may be familiar with Yardi for property management services, but did you investment market dataknow they also offer comprehensive market research and data software? This system allows real estate investors to track investment market data on a national level, or zero-in on specific markets and sub-markets.

This episode, we welcome from Yardi Matrix: Senior analyst and editorial contributor, Chris Nebenzahl, and research and data analyst, Doug Ressler. They discuss what investors need to know about tracking investment market data. They also offer up an update on Florida’s commercial and multifamily markets.

Florida Multifamily Overview

  • Rent growth and development strong overall
  • Focus on A + Super A properties
    • Urban living
    • Amenity-rich
    • Attracts millennials
  • Increasing demand for B + C properties, but limited supply
    • B + C properties seeing value-add opportunity
    • Sub-market level

Florida Multifamily Market Highlights

  • Miami and Orlando: 9000 expected multifamily developments for completion, 2017
  • Tampa: 7200 expected multifamily developments for completion, 2017
  • Development expected to crest after 2017
  • Rapid rent growth may pose affordability issues in Miami/SFL

Florida Commercial (Industrial/Self-Storage) Market Overview

  • Strong self-storage appetite
    • New focus on urban core
    • Close proximity to multifamily developments
  • Small cap rate compression
  • Renewed interest in mixed-use developments
  • Hotel occupancy slowing, but Orlando and Miami still strong

Tracking Investment Market Data with Yardi Matrix

Investor Resources and Contact

  • For more information on Yardi Matrix services and subscriptions, visit their website or contact Doug directly by phone at (480) 663-1149 ext. 2419 or email at doug.ressler@yardi.com

 

 

 

Ep. 118 Rod Khleif: Leveraging Investment Goals into Real Estate Cashflow

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earn real estate cashflow with investment goalsMotivation: it’s something every one needs. Whether it’s a financial drive or a spiritual one, everyone needs something that keeps them focused and real estate investors are no different.

Setting investment goals is something that every investor does. But sometimes as investors, we find ourselves setting unrealistic investment goals or goals that may reap immediate rewards but lack long-term gain. Sometimes it can seem overwhelming trying to set manageable, realistic investment goals that can actually be leveraged into cashflow.

Investor, author and real estate investing mentor, Rod Khleif, believes in the power of actionable investment goals. By setting goals for himself that not only inspired him to become a successful real estate investor, they also empowered him to forge his path.

Rod was introduced to real estate investing early on. He managed to find success fairly quickly and, by 2006, had acquired thousands of properties across the U.S., including 800 in Florida.

Following the market crash however, Rod lost everything. Instead of accepting defeat, Rod took that as a learning opportunity. He realized that, while his investment goals had been earning him income, they did not lay the foundation for a successful, long-term cashflow strategy. Rod re-tooled his approach and, by aligning his investment strategy with philanthropic efforts, was able to form actionable, empowering investment goals.

The Key to Setting Investment Goals

  • Daily routine/morning ritual
  • Find personal drive in life, incorporate purpose into daily routine
  • Keep family, personal and business life evenly balanced
  • Write down goals
  • Spiritual, not just financial fulfillment

Resources

  • Tony Robbins – motivational speaker; psychology of success and self-empowerment
  • Lifetime Cashflow through Real Estate Investing podcast
  • How to Create Cash Flow Through Multi Family Properties
    • Text “Rod” to 41411 (free copy of book)
    • Website

For any other questions about setting investment goals to earn real estate cash flow, or to find out more about Rod’s mentor programs and investor education, check out his website!

 

Ep. 104 Landlord Tales – Tax Credits on Green or Sustainable Property Endeavors

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cost segregation; tax creditsTax Credits

They sound nice, but real estate investors may think that they are not so easy to come by. Those investors who do happen upon them find usually find themselves bogged down by the IRS’ strict stipulations surrounding them.

Tax credits are, in fact, tools set in place to help investors grow their portfolios and while they may seem complex, they are accessible to any investor willing to do a little extra leg work.

While nobody should be expected to know the entire IRS tax code, real estate investors should be aware of some very helpful tax credits that can be applied to their assets.

Michele Pasquale, of Meridian Financial Solutions spoke with us previously about increasing your bottom line through cost segregation.

This week she discusses some more tax credits that real estate investors can apply to green or sustainable property endeavors.

179D

  • Instated in 2005 Energy Policy Act and renewed annually
  • Potentially set to expire end of 2016
  • Tax deduction for energy efficient additions to commercial buildings +30,000 s/f
  • 3 common components
    • Building envelope
    • HVAC
    • Lighting
  • $0.30-$1.80/SF in tax credits
  • Calculated on energy efficiency of entire building set to ASHRAE requirements

45(l)

  • Residential tax credit for developers of energy efficient buildings
  • Potentially set to expire end of 2016
  • dollar-per-dollar deduction
  • $2000/unit or dwelling
  • Qualifying factors
    • Apartments, Condos, Town homes
    • New construction or rehab up to 4yrs
    • 3 stories tall or less

Disposition

  • Tax credit for removal and retiring of building fixtures or components
  • Book value of components can be written off as business deduction
  • Components can not be purchased within same year as tax year filing with deduction and must be no longer in service

Have more questions on these or other possible tax credits? Call Meridian Financial Solutions for a free quote at 561-252-7282

 

 

Ep. 102 Michele Pasquale: Deferring Taxes with Cost Segregation

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cost segregationFor real estate investors, it’s all about the bottom line. Investors are always looking at how they can save on costs and expand their cash-flow. While many real estate investors might be aware of certain tax-breaks that can be taken advantage of for investment properties, deferring taxes through cost segregation may be one that investors overlook. Institutional investors are probably aware of this tax advantage, but smaller, individual investors or those just starting out in real estate investing may be unaware.

For Michele Pasquale, the bottom line is helping investors to get more out of their properties. Michele is owner and managing member of Meridian Financial Solutions. By working directly with investor clients and through alignment with CPA firms, Meridian seeks to establish effective, long-term tax-planning strategies resulting in greater ROI potential for investors. Michele brings over 16 years of experience in real estate acquisitions and finance to help investors maximize cash-flow. This episode, Michele shares some things investors should know about deferring taxes through cost segregation.

Cost Segregation

  • Tax-planning tool to help investors defer federal income taxes
  • Allows property owners to accelerate depreciation, resulting in reduced taxable income levels
  • Cost segregation study identifies all construction costs that qualify for accelerated depreciation
  • Breaks costs into depreciation values of 15, 7 and 5 years, so they can be written-off in a shorter time-span
  • Dependent on size and property type
  • For buy-and-hold investors

Cost Segregation Qualifiers

  • T.V. outlets
  • Wiring
  • Distribution panels
  • Dated jacks
  • Sinks and drains
  • De-mountable partitions
  • Floor coverings

When does Cost Segregation Apply?

  • Buying, building or renovating a property
  • Investors can go back 10 years or more on existing buildings and catch up on past depreciation
  • Before building or renovating, factor in cost segregation studies into design plans
  • Tax-planning strategy for 1031 Exchanges and Estate Planning

Tax-deferral, Not Tax Elimination

  • Investors should be aware that costs segregation is a strategy for deferring taxes to increase cash-flow. Taxes are applied at sale.

Contact Meridian Financial Solutions at (561) 252-7282 for more info about cost segregation and get a free estimate for tax-deferral savings.

Sandra Adomatis: Energy and Sustainability Initiatives to Increase Your Bottom Line

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sustainabilityCommercial real estate investors and developers know the term: “Green”. In Florida, it seems that “green” is the phantom criteria for real estate: many have heard of it, few have seen it. The term brings to mind vague notions of sustainability and energy efficiency, but what exactly is it? What is the merit in “going green”? As an effort to shift toward sustainability becomes a rising trend in the nation, Florida continues to lag behind as commercial developers and investors grapple with the nebulous nature of sustainability and green construction.

Sandra Adomatis, SRA, and LEED green associate is an appraiser with a focus on green initiatives and sustainability in real estate. Based out of Punta Gorda, Florida, Sandra has over 25 years of experience in real estate appraisal in the state of Florida. Sandra is a green valuation expert for the Appraisal Institute. Through course development, seminars and literature, Sandra has been helping commercial real estate investors integrate sustainability and energy efficiency into their investments.

  • 6 Elements of a True Green Building
    • Site orientation
    • Water efficiency
      • Low-flow plumbing, greywater recycling, rain barrels/cisterns, energy star rated washing appliances
    • Energy efficiency
    • Environmentally-friendly materials
    • Clean air circulation
    • Operations & maintenance
  • Adapting Existing Structures
    • Lighting
    • Heating/cooling
    • Insulation
  • Energy Modeler/building scientist
    • Assess what existing structures can handle for energy and sustainability adaptations
    • Calcs-Plus (Florida)
  • Green building investment appeal
    • Low-interest, flexible financing exclusive to green buildings
    • Cost-saving on appliances and utilities
    • 2-10% sale premiums vs. traditional structures
  • Resources and Info

To find out more about sustainability options or for appraisal services, visit Susan’s website or email her at adomatis@hotmail.com

Ep. 89 Greg Williams: From College Football Player to Institutional Real Estate Investor

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g williamswebSuccessful real estate investing requires knowing the terrain. Investors need to play the field and work hard to find the right deals. Florida real estate markets are garnering a lot of interest from investors and asset classes across the board are becoming more competitive. An investor starting out in single family can become full-time institutional real estate investor with strategic planning and a strong capital base.

Greg Williams, Co-founder and Principle at Cardinal Point Management of Tampa is a true testament to this fact. Greg was introduced to real estate investing out of college. After 4 years of experience building in a variety of asset classes as part of investment firms, Greg set his sights on becoming an institutional real estate investor in the Florida real estate market, focusing on. Though he started small, Greg aspired for larger more diverse deals. Bringing a competitive spirit and strategic approach, Greg maneuvered Florida’s real state industry and has become a success story as a leading institutional real estate investor.

  • Cardinal Point Management
    • Drawn to Tampa’s diverse commercial opportunity
    • Began small, raising capital through family and friends
    • Full-service development, management and brokerage investment firm
  • 1st Institutional Lender Deal
    • Retail center, S. Tampa, 22k sqf, 95% occupancy
    • Purchased at $255/sqf on non-recourse loan through mortgage broker (Jermey Pino); 8.25-8.5% cap rate; $5.3 million total
    • Sold in March, 2016 for $10.6 million w/ 5.5% cap rate
  • Situational Lending
    • Focus on geography
    • Diverse portfolio
    • Knowledge of structuring deals in variety of asset classes
    • Eye on upcoming or forgotten markets
  • Office Market
    • Outperformed by other asset classes in FL
    • Discount on replacement cost
    • Cash-flow during hold period
    • Path to grow NOI (Net Operating Income)
  • Investor Tips
    • Focus on day-to-day
    • Build relationships, be transparent
    • Due Diligence
    • Greg attributes his success as an institutional real estate investor to adopting his father’s hands-on business approach and his self determination and team-building background from competitive sports

Greg can be contacted with inquiries on deals, opportunities or advice on transitioning to a becoming an institutional real estate investor by visiting the Cardinal Point Management website