Finding 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 know 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
Increasing demand for B + C properties, but limited supply
B + C properties seeing value-add opportunity
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 has a high density of rivers, lakes, swamps and marshes that are generally protected from development. This has led many investors to wonder how much land is actually available for development. What many investors may not be familiar with is the concept of mitigation banks. Mitigation banks allow for the development of wetland areas that ordinarily would not be usable for real estate development.
So what exactly is a mitigation bank? How does it function and how can they serve investors and developers? Our guests this week are two experts in the field of environmental law and the designation and use of mitigation banks.
Listeners should remember Frank Hearne. Frank is a shareholder for Mechanik, Nuccio, Hearne & Wester, P.A. He was also one of Invest Florida’s first guests! His firm is one of the state leaders in environmental and land law. Beverly Birkitt, of Birkitt Environmental Services, Inc., has over 35 yrs. experience in the environmental field, with a focus on wetland litigation and litigation banking.
This episode, Frank and Beverly cover the ins-and-outs of using mitigation banks for wetland development and investment.
Spec wetland approved for future mitigation
Allows for more usable property for development
Exchange wetland set for development with wetlands that will be improved upon to compensate
Must be in the same hydrological zone as wetland to be developed (water basin)
State sets basin boundaries
Developing Mitigation Banks
Wetland landowners can develop mitigation banks
100-10,000 acres usually
Market demand in wetland area is critical
Polk County strong mitigation bank market
Mitigation banks must improve, not just preserve wetlands
Mitigation bank credits based on evaluation of improvement, not land size
Hot Mitigation Bank Markets
Tampa Bay Basin
In need of freshwater wetlands
Former agricultural lands
Risks for Mitigation Banks
land, permitting, construction, management
ROI tough to predict
If you have land that you believe is eligible for a mitigation bank, let Beverly know! Beverly can be contacted through her website: www.birkitt.com or by calling (813) 259-1085
For mitigation bank questions and for more info on other types of mitigation banks, contact Frank by email at firstname.lastname@example.org or call (813) 909-7400.
Florida, the dream destination. A vacationer’s paradise; the land of perennial sun and fun.
Florida has long been a favorite of vacationers. It has also been a favorite of those investing in vacation properties. Investing in vacation properties is a major market for Florida real estate investors.
Andrew Cohan is Managing Director for Horwath HTL, serving mainly Florida and the Caribbean. He is an expert on health and wellness resort properties and lends his expertise to determining optimum market demand for these types of properties.
This episode, Andrew discusses investing in vacation properties through branded hotels.
Miami Hotel Market
Stronger presence of foreign capital than other FL metro areas
Hotel transaction values have risen nearly 300 percent since early-2000s
Investing in Vacation Properties through Branded Hotels
Investing in Condo-hotel Units
Not a conventional, cap rate-type of investment
Unit investors typically earn about 40 percent back on investment
Owner, manager and developer of resort may be 3 separate entities
Investors need to know that circumstances may change over the investment’s life-time
Condo-hotel Draw for Developers
Quick exit, high return opportunity
Don’t have to worry about property management
Brand managers or non-brand managers
If you are looking to find out more about investing in vacation properties through branded hotels, you have more questions about acquiring a condo-hotel unit or you are a developer looking to transition to hotel/hospitality, you can contact Andrew directly by phone or email:
For 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.
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
Sinks and drains
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.
Things are happening in the Miami real estate market… Well things are always happening in the Miami real estate market, but BIG things are happening right now. Miami has long been the focal point for real estate investors due to the density and scale of development and the investment opportunity for a variety of asset classes. Real estate investors all over Florida have looked towards the Miami real estate market as a forecast for current and future conditions throughout the state.
Tom Blazejack, of Blazejack & Company knows all of the ins and outs of the Miami real estate market. In addition to nearly 40 years’ experience as a real estate appraiser and analyst, Tom is also a native of Miami. Tom’s extensive appraisal knowledge of commercial and residential properties and intimate knowledge of the Miami real estate market make his consultation highly sought after by investors. This episode, Tom gives us an overview of the Miami real estate market, including development highlights and what investors should expect.
Miami Real Estate Market
2011 purchase of Miami Herald building for $236 million marks return of market
Foreign investment and cash-heavy market
Foreign investors seeking stable properties to invest cash
New deposit requirements for investors and developers insures accountability
Lenders alleviating construction loan costs for developers
Projects moving quicker
Land price increases
Miami seeing $200-300/sqf on new commercial developments but even as high as $3000 in some prime locations
Residential continues to increase… up to $3/sqf in best projects
Development spreading into surrounding Miami
Little Havana, Wynwood, Coral Gables all seeing new projects
Real estate development in Florida is currently in great demand. With real estate investors turning towards ground-up real estate development as an increasingly more viable means of investing, new projects are springing up state-wide. However, with increased pressure on real estate development and a construction workforce stretched thin, it is important to keep in mind key points if looking into real estate development as an investment goal.
Jonathan Moore, AIA is president and founder of InVision Advisors. His firm offers owner’s representation and project consulting services for owners and investors, architects and contractors during real estate development. As owner’s representatives, InVision Advisors takes a comprehensive approach to real estate development deals handling day-to-day and overall project oversight. As an experienced architect, Jonathan brings a unique insight to his knowledge of the real estate development industry. This episode, Jonathan discusses hot points for investors to know about real estate development.
7 Real Estate Development Hot Points
Markets state-wide are saturated with work
Sub-contractors control velocity of development
Artificial inflation caused by over estimation of construction costs
Problems frequently arise due to lack of communication
Loss of face-to-face time and on-site meetings contribute to communication breakdown
South Florida has always been in a class apart from the rest of the state in terms of real estate development. The South Florida real estate market has lead the state in real estate investment and growth. Despite it’s ups and downs the South Florida real estate market has historically been a market indicator in terms of development and investment activity. South Florida’s unique positioning and heavy influence of foreign investment makes this market an interesting and dynamic one.
Brian Bandell is a senior journalist with the South Florida Business Journal covering real estate, transportation and logistics. For over a decade, Brian has served the South Florida business community. With an expert ear for news, Brian gives us a brief, but detailed overview of the South Florida real estate market and what is in store for future developments in the area.
$7.5 billion in construction starts in Miami and South Florida
Related Group – several condo, residential, multi-family apartments in Miami/Ft. Lauderdale; retail/mixed-use projects in Downtown Miami
For those who haven’t heard, All Aboard Florida is a high-speed rail project connecting Miami and Orlando via Fort Lauderdale and West Palm Beach. The project is slated for public use in 2017.
The project will have a major impact on transit in South Florida and Central Florida. The rail project will also have a profound effect on real estate development in the state. John Guitar, Senior V.P. of Business Development discusses All Aboard Florida’s interests in stations and transit-oriented real estate development.
4 million sq. ft. rail transit
West Palm Beach
Utilizing privately owned space in F.E.C. “Flagler Corridor”
125 mph (with no grade crossings)
200k sq. ft. real estate development for Downtown Miami Station
Servicing local and commuter traffic
2 Developments planned: 200k sq. ft. & 100k sq. ft.
Accessible locations for commuters
Ft. Lauderdale / West Palm Beach
Several retail and residential plans in works for future development
To contact John with questions regarding All Aboard Florida’sreal estate development and leasing opportunities or to find out more about the project visit the project website www.allaboardflorida.com
Wesley Burdette has always had a hand in real estate investing, however he began on the lending side in the Washington D.C./metro area. From lending he moved towards single-family residential flipping with his sights set on the Florida real estate markets. After finding success in the single-family markets, Wesley endeavored into real estate development and now has several projects in progress in the Seminole Heights neighborhood of Tampa, notably a 46 unit loft-living complex, The Warehouse as well as four new townhouses.
Wesley joins us to discuss his transition from flipper to developer and covers key tips for investing in the Florida real estate markets along with advice on how to diversify your investments and foray into larger investment markets.
Know Your Market
Research the areas you are considering investing in
Understand consumer psyche – what do people want in a home?
Know your contractors, work closely with them
Millennial Markets on the rise: Seminole Heights
Know what you can afford
House-flipping is all about initial buy
Adaptive reuse (commercial, multi-family)
Infrastructure (basic repairs)
Perseverance is key.
Entering into investment real estate can be intimidating, but with determination and the proper know-how you can find success.
Be careful with your investments. Don’t get locked into something uncertain
The Miami real estate market is one of the most resilient markets in the world and certainly the strongest market in the State of Florida. It was left for dead after the 2008 market downturn and even optimistic projects estimated it would take at least a decade to rebound. Fast forward to 2015 and the Miami market is seeing eye-popping growth, not only in construction starts, but also a rebound in prices.
In this part of the series Tim gives a brief overview of what is moving and shaking in the Miami real estate development scene and some areas of potential concern. If you are an active or aspiring real estate investor in the Florida markets, you will definitely want to catch all four parts of the series.