Commercial Real Estate, Capital, Insurance, Leasing & Management

Tampa Bay Business Journal: Andrew Wright: ‘Florida has been leading the way in return to office’

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Andrew Wright, founder and chairman of the board, Franklin Street

Founder and board chairman of the full-service commercial real estate firm he founded in 2006, Wright develops and defines strategic goals and major initiatives while overseeing its collaborative dynamic verticals. The company has grown in the Southeast through thousands of transactions totaling billions of dollars. Its strategy is a vertically integrated business encompassing the entire life cycle of investment real estate for investors and occupiers. Among diverse business interests, Wright is the founder and CEO of Ally Capital. He’s also a co-founder of Next Level Brands. Here is an excerpt from his presentation, edited lightly for brevity and clarity.

There are many things in life where the idea of something is better than the reality of it. And I think “work from home” is one of those things.

We are social beings. We are not designed to roll out of our bed, put our shirts on and our shorts and Zoom all day, where every interaction has to be intentional, where everything has to be thought through. That is not the reality of things. We want to be together. Most of my friends come from work or school, and that is what we’re doing.

Just like retail had this perception issue in 2019, the office has that perception issue today and more so in more established markets, New York, Chicago, and L.A., where the commute is seven minutes in the sunshine each way. It’s an hour and a half on a train in misery.

And as an overall trend, we’re seeing Florida has been leading the way in return-to-office.

That doesn’t apply to all businesses. There are innovations. Working from home and Zoom are both efficient. And in a world where business is getting harder, you need AI, you need Zoom. I don’t need to fly in certain places, but that does not replace human interaction.

What does that all mean? 2024 will represent the biggest buying opportunity in commercial real estate since 2009. Yes, if you own something or you’re portfolio managing, you’re not going to like my presentation. But the best defense is a good offense. Historically, we call it the price of blue sky. It evolves. So sometimes the price of blue sky is built into rent growth. Today, you can buy real underwriting, right? Zero rent growth for the next two years. Expenses go up, revenue goes down.

When the market converges and the bid-ask spread accepts the new reality, that is the time to get in.

Do you make money by buying high and selling low? It doesn’t take an economist to tell you that one. This correction is actually going to represent one of the best times to enter the business. I advise you, yes, you have to play defense. Yes, you have to be thoughtful. Expertise is only valuable when it’s needed. It’s needed now more than it ever has been.

All the aspects of real estate are complicated, but it is also a time to get in because of those long-term secular trends that I’ve been talking about; those are not going away.

Read more here from Tampa Bay Business Journal.

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