cap rates Archives - Real Estate Investing in Florida

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Successful 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

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The recovery from the 2008 economic recession has been a slow one with real estate being perhaps one of the hardest hit industries during the recession. In Florida, investors in all asset classes are feeling uncertain about rising costs of rental rates and projected interest rates adversely affecting cap (capitalization) rates.

Ryan Severino joins us this week to discuss the recovery from the recession and its effect on real estate investment. As a senior economist and Director of Research at REIS, one of the nation’s leading real estate data providors, Ryan can provide expert insight on national recovery and how it translates to a state level. He also clears up the uncertainty over cap rates, interest rates & asset classes in Florida real estate.

In 2008, U.S. experienced deep balance sheet recession
- Excess debt built up in national economy
- Flow of credit ceased
- Slow recovery period
2-2.5% GDP growth rate annually (next several years)
Class A inventories on rise, B & C inventories diminishing
- Results in top-of-market rental rates in all asset classes
Southeast FL markets experienced above average recovery
- Supported by foreign investment
- Rents rising quicker than income recovery
- Miami, Ft. Lauderdale becoming unaffordable markets
Central, Northeast FL markets still generally affordable
Multi-Family properties becoming much more competitive
- Cap rate compression beginning to plateau
Commercial properties experiencing early-stage recovery
- Room for cap rate compression
Cap Rates not effected solely by interest rates
- Tied more closely to economic recovery
- NOI (net operating income) effects cap rates