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400K SF Millenia-Area Project to Start Work Soon

Excerpted from Orlando Business Journal story.

A Dallas developer expects to break ground in March on the redevelopment of an aging industrial site near the Mall at Millenia in Orlando.

Lincoln Property Co. aims to raze the site’s 13 buildings totaling 420,000 square feet — which were built between 1972-1998 — and construct two new structures with a combined 405,000 square feet of Class A industrial space. The site at 2001 W. Oak Ridge Road, located northwest of Rio Grande Avenue, is surrounded by single-family homes.

The move to replace the existing dated buildings is a good idea, as they likely don’t conform to the needs of potential industrial tenants, said Larry Kahn, senior director industrial with Tampa-based Franklin Street, who isn’t involved with the deal. “It makes sense to scrap it and do what they’re going do.”

For full story, visit https://www.bizjournals.com/orlando/news/2020/01/24/400k-sf-millenia-area-project-to-start-work-soon.html

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Fannie, Freddie Plan Ahead For Privatization

Excerpted from GlobeSt.com story.

As Fannie Mae and Freddie Mac move toward privatization, Jeff Lee, president of Capital One Multifamily Finance, believes they will have to make some important decisions.

Specifically, they will need to balance pure economic returns versus mission-driven business. “There could be more of a focus on return metrics to ensure they could provide an adequate return on capital in the event of privatization,” Lee says.
Both Fannie and Freddie are taking steps to fortify their balance sheets at the direction of their regulator, the Federal Housing Finance Agency, according to Brian Stoffers, global president of debt structured finance for capital markets at CBRE.

“The GSEs have credit risk transfer protocols in place now for multifamily lending [Delegated Underwriting and Servicing loss sharing for FNMA and K series risk transfers for Freddie],” Stoffers says. “I think those models are being very well received by the FHFA. In fact, there’s some talk of creating more credit risk transfer on the single-family side of the business.”

If those models work, it could speed the path to privatization. “Mark Calabria [director of the FHFA] has said that he would like to see this [privatization] largely implemented by 2024 and we have every hope that it could happen if they continue to recapitalize with retained earnings,” Stoffers says.

If privatization does occur and there are no government guarantees backing Fannie and Freddie, Ryan M. Haase, director of Capital Markets for Franklin Street, says bonds should trade wider. That, in turn would make the GSE’s cost of capital higher, which would result in higher rates to the borrower and consumer and effectively level the multifamily lending playing field.

“With less governmental oversight, the GSEs will have more flexibility to go into alternative and adjacent lending spaces where they might create more production and efficiencies, thus resembling a more typical CRE lending institution,” Haase says. “Their mandate is to improve housing affordability, but it will be interesting to see how privatization affects the importance of the bottom line.”

For full story, visit https://www.globest.com/2020/01/23/fannie-freddie-plan-ahead-for-privatization/

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Lucky’s Market’s local distribution center is up for grabs. Here’s who may want it.

Excerpted from Orlando Business Journal story.

Shrinking supermarket chain Lucky’s Market will give back a sizable amount of industrial space in Orlando as it gets ready to exit most of Florida.

The Niwot, Colorado-based grocer confirmed Jan. 22 in a tweet it would close nearly all of its Sunshine State locations — excluding one in West Melbourne — along with other U.S. stores. In addition, the grocer will exit a 120,000-square-foot distribution center space at 6375 Emperor Drive in Orlando.

The space is “attractive” for last-mile distribution companies, particularly those that need refrigeration and freezer space, said Larry Kahn, senior director of Tampa-based Franklin Street in Orlando, who is not involved with Lucky’s. That site also is well located near Interstate 4 and Florida’s Turnpike.

“There are users out in the marketplace right now looking for that size with that type of configuration,” Kahn said.

For full story, visit https://www.bizjournals.com/orlando/news/2020/01/22/luckys-markets-local-distribution-center-isup-for.html

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Tampa experts have cautious optimism for 2020 driven by population growth

Excerpted from Tampa Bay Business Journal story.

The goal of the Tampa Bay Business Journal’s annual Economic Outlook is to deliver the latest information concerning regional, national and global trends now impacting the local economy. 

The presenters at the Straz Center for the Performing Arts armed more than 400 Tampa Bay business leaders with the best information available to help them chart a course for a successful year ahead.

Tampa Bay is in the midst of a major transformation with unprecedented growth, startup activity, more venture capital and a more diversified business foundation. That energy is attracting organizations and talent. Synapse, Tampa’s own homegrown innovation conference coming Feb. 11 will bring 6,000 people from the startup community and beyond to attend. 

Right now, the wind is at our backs. But what lies ahead for the global and macroeconomy? What will impact the national and international trends that steer Tampa Bay’s growth?

Below is an edited transcript from each of this year’s presenters.

Andrew Wright, CEO and managing partner of Franklin Street

Tampa Bay is one of the greatest places to be from an investment standpoint. When you look at the global economy, the U.S. is far and away the best place to invest money. If you look in the U.S., the Southeast, the population growth, the economic growth means it is one of the best places to be within the U.S., and within the Southeast, Tampa Bay, in my opinion, is at least one of the top three markets. 

The story is and will continue to be population growth. While it has slowed, it still is more than two and a half times the national average. And for the Tampa Bay market, it obviously outpaces Florida as well. It does lag some of our other cities in the state, but it is still an impressive number overall.   
That continues to be the economic engine that drives our economy, drives our state. And I don’t see that slowing down. Zooming in on the Tampa Bay area, where is that growth coming? I’m not an economist, I’m a real estate guy. So a lot of the stuff is not about specific numbers for me. It’s more about trends and understanding where we’re headed.

Through 2023, the majority of the population is in the outskirts of Tampa, more in the suburban areas. It’s because it’s less developed. So if you live in Pinellas County, it’s already fully developed and it’s waterlocked. Very hard to have more densification there. 

The same thing in the urban cores of Tampa, although it is changing. You do see that in downtown development. But the majority of the growth is happening in West Hillsborough and into Pasco County. On household formation, population is part of it. But most of you, we don’t have one household to one person. 

Household formations are also a very important thing that I don’t think gets talked about enough. This follows that same trend that the household formations are coming in some of the outlying areas, which again hits transportation aspects.

Getting into unemployment locally: We are very strong, as well as nationally. We’ll continue to be. I think if you start talking about subsets, it’s even tighter. 

If someone’s looking for a good accountant, staff accountant, comptroller, that market is extremely tight. If we’re looking for tech people, code writers, here in this area, it is extremely tight. So within those specializations, talent will continue to be a challenge for us, attracting them to the region, but I think we’re headed in a good direction.

Our economy is thriving. Our GDP growth in the Tampa Bay area is almost 6 percent. We don’t have the new numbers. We’ll get them here in about 30 days. But looking at where we are compared to the rest of the country, it has slowed down. It has not slowed down here. And 6 percent is a massive number. GDP is really a broad understanding of economic output and if the population stays flat, and economic output grows, then your per capita available economic distribution, people become wealthier. 

How do you erode that? Through inflation. So if you grow, everything costs more, and the population has to spread out to get to more people.

We are growing here faster than in other places, even accounting for the population growth and inflation. So that means people should be feeling wealthier on a per capita basis.

Unfortunately, there’s not an equal distribution. And it’s a good thing this is happening, because we are way behind. When you look at where we are on a per capita GDP across the country, we are in the bottom. If you think about how we stack up against our other large populated states, California, Texas, New York, we are way behind. 

That’s been a problem for us for a long time. Low wages, low quality of jobs, low-skilled workforce base historically. But those things are starting to change. Household income is outpacing the national average. We are outpacing the areas here locally. Hillsborough is ahead, Pasco is catching up, and we are still way behind the nation. 

When you look about how we’re doing in terms of rates, the U.S. has been steadily declining in its percentage growth on median income year over year. But guess who has not? Locally, we are continuing to see strength in our economy, wealth creation, and the direction that we’re headed. I think we will continue to see that trend. 

There are some headwinds, but as an overall statement, people in Tampa Bay are getting wealthier and we’re able to afford more, and the quality of our economy is very strong. Particularly when you compare it to the U.S., and also particularly when you compare it to concepts that we’re focused on. It’s a very well-spread increase of household income. It’s not centralized into the high ZIP codes. Some of the largest growth of household incomes is in some of the rural areas. That is really a reflection of population growth, people coming in with higher skills.

The cost of housing is a concern. But in Tampa, that’s not the same story. I think that’s positive. You look at the bubble that was created in the run-up prior to the recession and where we are now, if you were to take a long-term average, we’re right in line with what our long-term health average in terms of growth is. Tampa home price index is higher than the national average. So, think about that.

For full story, visit 
https://www.bizjournals.com/tampabay/news/2020/01/17/cautious-optimism-driven-by-population-growth.html

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Eco Outlook epilogue: Presenters Answer Audience Questions Texted in Real-Time

Excerpted from Tampa Bay Business Journal story.

The TBBJ invited the 2020 Economic Outlook audience to send text messages with questions for all three presenters in real time.

The newsroom passed them on to the presenters, requesting, time permitting, they pick and choose a few and offer written responses to continue the conversation this week.

Presenters were Mark Vitner, managing director and senior economist at Wells Fargo Securities LLC; Kathleen M. Fisher, head of wealth and investment strategies at Bernstein Private Wealth Management; and Andrew Wright, CEO and managing partner of Franklin Street, a full-service commercial real estate firm.

For full story, visit https://www.bizjournals.com/tampabay/news/2020/01/17/eco-outlook-epilogue-presenters-answer-audience.html

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Here’s What to Expect Inside Downtown’s First Bouldering Gym

Excerpted from Orlando Business Journal story.

Office, entertainment and residential developments in Parramore will spur more demand for retail in the area, said Terrence Hart, senior director at Franklin Street of Orlando, who handles retail leasing and is not involved with the deal. He said he sees downtown’s western edge eventually growing to John Young Parkway. “Retailers actually are starting to take that part seriously. That used to be a no man’s land for retailers.”

For full story, visit https://www.bizjournals.com/orlando/news/2020/01/17/heres-what-to-expect-inside-downtowns-first.html

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News in Brief: New Restaurants Open at Shops at Pembroke Gardens; Apartments in Opa-locka and Pompano Beach Sold

Excerpted from South Florida Business Journal story.

Franklin Street brokered the $6.2 million sale of Pinecrest Pointe Apartments, a 48-unit rental property at 295-395 S.W. 15th St. in Pompano Beach, and the $8.2 million sale of Ingram Park Apartments, a 118-unit rental property at 14255 N.W. 22nd Ave. in Opa-locka. www.franklinst.com.

For full story, visit https://www.bizjournals.com/southflorida/news/2020/01/15/news-in-brief-01-17-2020.html

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Large Providers Still Dominate CRE Equity

Excerpted form GlobeSt.com story.

Commercial real estate has always had its fair share of capital market providers, especially in recent years. That said, some things are changing, according to Ryan M. Haase, director of capital markets for Franklin Street.

“Lately, we have seen that trend falling off, but we have seen many current providers expanding into alternative products to find yield or increase production,” Haase says. “This is a trend that occurred in the last expansion as well, with many of those non-core product lines terminating in a contraction. For example, several permanent lenders have ventured into bridge or construction lending for a second time in this expansion.”

For full story, visit https://www.globest.com/2020/01/15/large-providers-still-dominate-cre-equity/

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Lake County OKs Incentives for Mystery Manufacturer’s $2.1M Project

Excerpted from Orlando Business Journal story.

Leesburg and Lake County are attractive to businesses because they offer a strong labor pool in a low-cost area, Larry Kahn, senior director of Tampa-based Franklin Street in Orlando, told OBJ. At the same time, underemployment in the area means the jobs are needed, he said. 

For full story, visit https://www.bizjournals.com/orlando/news/2020/01/14/lake-county-oks-incentives-for-mystery.html

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Franklin Street Hires Private Client and Personal Insurance Expert

Franklin Street added personal property and casualty insurance veteran Vanessa E. Schmidt as senior associate of private client services. Schmidt’s focus on managing high-net-worth accounts and designing risk management programs for specialty clients will further expand Franklin Street’s in-house capabilities and competitive advantage in the marketplace.  She will be based in Franklin Street’s Tampa headquarters office and serve clients nationally. 

Schmidt began her career in the insurance and risk management brokerage industry in 1996 and brings expertise in all personal insurance product types, including high-value homes, automobiles, fine arts, inland marine, and personal umbrella policies.  She performs comprehensive reviews of plans, identifies any potential gaps in coverage, and confirms every program is custom-tailored to meet the specific needs of each client.

Franklin Street is one of the rare commercial real estate firms with both personal and commercial property and casualty insurance as part of its service portfolio,” said Andrew Kiernan, president of Franklin Street Insurance Services. “Vanessa brings years of experience with high-net-worth insurance carrier relationships to our insurance services team, and we’re confident our clients will benefit greatly from her industry knowledge.” 

“Over the last 25 years, I have come to understand that every high-net-worth client approaches their personal insurance matters differently,” said Schmidt. “My top priority is to respect each client’s unique needs and to serve as their trusted private insurance and risk management advisor.”

Prior to Franklin Street, Schmidt served as a director of private client practice for Arthur J. Gallagher & Co. in Tampa. She also worked as an insurance officer and commercial business agent at BB&T Insurance Services. Schmidt received a Bachelor of Business Administration from Eckerd College with honors. She is an active member of the Private Risk Management Association.

Franklin Street Insurance Services insures commercial real estate nationwide, by brokering insurance products for private and institutional owners and managers of all commercial property types. The insurance team specializes in supporting the acquisition efforts of active buyers and offers actionable risk management and claims advisory services. 

Franklin Street has brokered insurance on commercial assets with a total insurable value (TIV) of over $10 billion and built an impressive client asset portfolio of more than 275,000 units of multifamily property alone, as well as retail, office, and industrial risks. Franklin Street represents a diverse roster of clients from small operators that own a single asset to major corporations with more than $1 billion in TIV each.

About Franklin Street: Founded in 2006 during one of the toughest real estate climates, Franklin Street focused on delivering value-added solutions to meet the evolving needs of clients. Through a collaborative philosophy of leveraging the resources, expertise and experience of each of its divisions – Investment Sales, Tenant and Landlord Representation, Capital Advisory, Insurance, Property Management and Project Management – Franklin Street offers unmatched value and optimal solutions for clients nationwide. Learn more about Franklin Street at FranklinSt.com.