ORLANDO—Is commercial real estate history really repeating itself in Florida? Greg Matus, regional manager at Franklin Street and one of the panelists at RealShare Central Florida, thinks so—at least in some respect.
Matus joined other industry experts on the Town Hall Meeting: State of the Industry Panel last week in Orlando. Richard Matricaria, regional manager of Marcus & Millichap in Tampa, moderated the panel, which included David Barilla, associate director of the Downtown Development Board/Community Redevelopment Agency, Fred Hames, general manager and executive vice president of Skanska USA, Ryan Kratz, president of Tampa Bay, Central Florida and Southwest Florida for Colliers International, Brooke Myers, president of Emerge Real Estate Ventures, and Larry Richey, senior marketing director and Florida market leader for Cushman & Wakefield.
“We are seeing that history is starting to repeat itself,” Matus declared. “The trend of everyone trying to move their capital north for better returns is coming to Orlando. Retailers are also coming.”
Matus pointed out rental rates in Miami and Fort Lauderdale, FL as one reason some retailers are eyeing Orlando. Rents on Federal Highway in Fort Lauderdale are $60 a foot.
“People were fighting to get out of tertiary markets,” Matus said. “Now people are fighting to get into tertiary markets because they can find better returns there. Brokers, you can sell them better returns. Look at the comps in the market. People are selling in South Florida at a 5 cap and buying in Orlando at a 7 cap.”
Orlando may also make some new commercial real estate history. Kratz says technology is revolutionizing the way people use office space and Orlando is set to capitalize on the trend with new developments.
“In 2016, the Millennial generation will be the number one users of office space and by 2020 most Boomers will have retired,” Kratz said. “Millennials are social. They want to work where they want to work. Millennials like to extend the relationships beyond the office space itself into the evenings and weekends.
“People are using office space 30 to 40% of time, so you are seeing a trend towards hoteling or communal office space,” he continued. “In a service economy, its about attracting and retaining talent.”