Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
1
Survey of Emerging Market Conditions
Warrington College of Business Administration
Survey of Emerging Market Conditions
Quarter 1 2015
Published May 2015
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
2
Lead Researcher
Dr. Wayne R. Archer, Executive DirectorUniversity of Florida Bergstrom Center for Real Estate Studies
Professor of Real EstateWarrington College of Business Administration
Researcher and Analyst
Timothy S. Becker, CCIM, DirectorUniversity of Florida Bergstrom Center for Real Estate Studies
Editorial Board
Mr. Lewis Goodkin, PresidentGoodkin Consulting, Miami, FL
Dr. Hank Fishkind, PresidentFishkind & Associates, Inc., Orlando, FL
Mr. Jeff Conn, PrincipalNAI Hallmark, Jacksonville, FL
The Survey of Emerging Market Conditions is provided to all invited survey respondents who completed the survey during
the July 2014 fielding. For more information about the survey or the Bergstrom Center for Real Estate Studies, visit our
website at realestate.ufl.edu
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
3
Table of Contents
Executive Summary & Conclusions ............5Highlights ..................................................................................5The Survey.................................................................................6General Investment Outlook .................................................6Single Family & Condominium Development ...................6Apartments ................................................................................6Industrial ...................................................................................6Office .........................................................................................6Retail ...........................................................................................6Land Investment ......................................................................6Capital Availability ..................................................................6UF Commercial Real Estate Sentiment Index ..................7
Section 1: Investment Outlook ....................8
Section 2: Residential Development ...........8Expected Absorption Rates ..................................................8Expected Price Changes .......................................................9Investment Outlook ...............................................................9
Section 3: Apartments .................................. 9Expected Occupancy .............................................................9Expected Rental Rates ........................................................10Investment Outlook .............................................................10Cap Rates ............................................................................... 11Yields ...................................................................................... 11
Section 4: Industrial .................................... 12Expected Occupancy ...........................................................12Expected Rental Rates .......................................................12Investment Outlook .............................................................. 13Cap Rates ............................................................................... 13Yields ..................................................................................... 13
Section 5: Office ............................................ 14Expected Occupancy ...........................................................14Expected Rental Rates ........................................................14Investment Outlook .............................................................15Cap Rates ................................................................................15Yields .......................................................................................15
Section 6: Retail ............................................16Expected Occupancy ...........................................................16Expected Rental Rates ......................................................... 17Investment Outlook ............................................................. 17Cap Rates ...............................................................................18Yields ........................................................................................18
Section 7: Outlook for Investment in Undeveloped Land .......................................19
Land Without Entitlements or with Residential Entitlements ..........................................................................19Land with Office or Retail Entitlements .........................19Land with Hospitality Entitlements ................................19Land with Entitlements for Warehouse or R&D ........... 20Land for Urban Renewal ..................................................... 20
Section 8: Business and Capital Availability Outlook ................................... 20
Capital Availability ............................................................... 20UF Commercial Real Estate ...............................................21Sentiment Index .....................................................................21
Section 9: Dominant Investors .................22
Section 10: Characteristics of Survey Respondents ..................................................22
Profession of Respondents ................................................. 22Markets of Familiarity ......................................................... 23Property types of Familiarity ............................................. 23
Section 11: Details of Cap Rates, Yields and Expected Changes ............................... 24
Section 12: Local Markets ......................... 26
Regional Market Report for Dade ............27Multi-Family Properties ...................................................... 27Industrial Properties ............................................................ 28Office Properties ................................................................... 29Retail Properties ................................................................... 30
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
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Regional Market Report for Broward .... 31Multi-Family Properties ......................................................31Industrial Properties ........................................................... 32Office Properties .................................................................. 33Retail Properties ..................................................................34
Regional Market Report for Palm Beach .........................................................................35
Multi-Family Properties ..................................................... 35Industrial Properties ........................................................... 36Office Properties .................................................................. 37Retail Properties .................................................................. 38
Regional Market Report for Treasure Coast ............................................................ 39
Multi-Family Properties ..................................................... 39Industrial Properties ...........................................................40Office Properties .................................................................. 41Retail Properties ..................................................................42
Regional Market Report for Southwest Coast ............................................................ 43
Multi-Family Properties .....................................................43Industrial Properties ...........................................................44Office Properties ..................................................................45Retail Properties ..................................................................46
Regional Market Report for Daytona Beach ..............................................................47
Multi-Family Properties .....................................................47Industrial Properties ...........................................................48Office Properties ..................................................................49Retail Properties ..................................................................50
Regional Market Report for Orlando ..... 51Multi-Family Properties ......................................................51Industrial Properties ........................................................... 52Office Properties .................................................................. 53Retail Properties ..................................................................54
Regional Market Report for Lakeland....55Multi-Family Properties ..................................................... 55Industrial Properties ........................................................... 56Office Properties .................................................................. 57Retail Properties .................................................................. 58
Regional Market Report for Tampa ....... 59Multi-Family Properties ..................................................... 59Industrial Properties ...........................................................60Office Properties ...................................................................61Retail Properties ..................................................................62
Regional Market Report for Sarasota ... 63Multi-Family Properties ..................................................... 63Industrial Properties ...........................................................64Office Properties .................................................................. 65Retail Properties ..................................................................66
Regional Market Report for Jacksonville .........................................................................67
Multi-Family Properties ..................................................... 67Industrial Properties ...........................................................68Office Properties ..................................................................69Retail Properties ..................................................................70
Regional Market Report for Gainesville/Ocala .............................................................. 71
Multi-Family Properties ......................................................71Industrial Properties ........................................................... 72Office Properties .................................................................. 73Retail Properties .................................................................. 74
Regional Market Report for Tallahassee/Panhandle .....................................................75
Multi-Family Properties ..................................................... 75Industrial Properties ........................................................... 76Office Properties .................................................................. 77Retail Properties .................................................................. 78
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
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Executive Summary & Conclusions
Optimism for Florida real estate remains strong among practitioners as UF’s Commercial Real Estate Sen-timent Index, an outlook of our respondents’ own businesses, improved to its highest level since the third quarter of 2006.
Florida’s improving economy continues to drive real estate markets. Through the first quarter, Florida added over 57,000 jobs crossing the eight million mark for the first time since June 2007. Unemployment re-mained at its lowest level since June 2008 at 5.5%. The largest increase in employment has occurred in hospi-tality, construction, and education and health services.
The increase in employment for hospitality contin-ues to be driven by record tourism. According to Visit Florida, the state continues to see record setting levels of tourism with total visitation up 5.1% in 2014, reach-ing over 98 million visitors. We expect that trend to continue with Florida visitation surpassing 100 million visitors in 2015.
The continued improvement in the job market along with tremendous growth in the tourism industry has been positive for consumer confidence. The UF Bureau of Economic and Business Research (BEBR) consumer sentiment index has increased dramatically over the first quarter, reaching 96.8, its highest level in over 10 years.
These factors are having a positive impact on the com-mercial market in Florida, driving increasing devel-opment in multifamily and retail properties through-out the state. However, the outlook for single family residential development remains mixed. The NAHB/Wells Fargo Regional Housing Index for the south remains muted at 54 while single family housing starts in Florida remain steady but at almost half the average monthly average over the past 20 years.
While survey respondents are positive about the future, they remained concerned about the prospect of interest rate increases in the near term. The first quarter sluggishness of the U.S. economy may postpone rate increases, providing additional buoyancy to the real estate markets as capital continues to flow into real estate because of these historically low rates. A mea-sured increase by the Federal Reserve would allow real estate markets to absorb the increases through com-pression of the historically high spreads between cap rates and the 10 year yield. Additionally, the increased interest rates may be offset by improving rents and net operating incomes.
Despite the uncertainties, Florida’s economy and therefore the real estate markets continue to improve and that trend should continue.
HIGHLIGHTS
ɀ The UF Commercial Real Estate Sentiment Index increased this quarter to its highest level since the 3rd quarter of 2006.
ɀ The outlook for occupancy and rents remained positive across all property types with expectations that they will remain stable or increase.
ɀ Cap rates remained stable across most property types. Expectations for cap rates were mixed as un-certainty on interest rates had impacts on certain property types.
ɀ Yields have remained relatively stable across most property types.
ɀ The outlook for investment remained positive across all property types.
ɀ Respondents’ outlook for capital availability re-mained stable this quarter with most expecting it to increase in the future.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
6
THE SURVEY
Our quarterly survey, conducted by the Bergstrom Center for Real Estate Studies, Warrington College of Business Administration, University of Florida is in its thirty-seventh fielding. The total number of partici-pants, at 97, is the most extensive survey of Florida pro-fessional real estate analysts and investors conducted on an ongoing basis. It includes respondents represent-ing thirteen urban regions of the state and up to fifteen property types.
GENERAL INVESTMENT OUTLOOK
Our general index of real estate investment outlook, weighted 40 percent for single family and condo de-velopment, 40 percent for apartments and commercial rental property and 20 percent for developable land, improved this quarter to a survey high. Most respon-dents believe it is a good time to invest in Florida real estate. Land continues to improve as an investment alternative as development heats up across the state.
SINGLE FAMILY & CONDOMINIUM DEVELOPMENT
The outlook for new single family development re-mained positive. Florida continues to have positive population growth and employment growth which is driving demand for new homes. Extreme winter conditions prompt more people to consider Florida, particularly retirees or near retirees. However, higher interest rates, declining incomes and higher land prices will dampen optimism slightly in this sector.
APARTMENTS The outlook for multi-family properties continues to be positive. Occupancy has been increasing at a rapid pace over the past few years; however, because of increases to inventory from new construction along with current units near capacity, respondents believe that occupan-cy will level off. Respondents remain optimistic that rents will rise with inflation. Cap rates remained steady this quarter with more respondents believing they will increase in the next year.
INDUSTRIAL The outlook for investment in industrial properties increased dramatically this quarter to its highest level since the beginning of the survey. Rents and occupancy are expected to increase in coming quarters. Cap rates and yields remained relatively stable for both sectors, a trend that is expected to continue in future quarters.
OFFICE The outlook for the office remained positive this quar-ter, with a majority of respondents believing it is a good time to buy. Increasing occupancy and rent expecta-tions are driving the investment outlook. Cap rates and yields have remained relatively stable, and most respondents expect that trend to continue.
RETAIL The outlook for retail properties remained positive this quarter for all four sectors. Growth in rents and occu-pancy are driving the optimism. The positive funda-mentals continue to drive cap rates and yields lower across all sectors. Respondents remained mixed on the future direction of cap rates and yields across the four sectors with decreases expected in large retail centers.
LAND INVESTMENT The outlook for investment in land reached new survey highs across all land sectors. Improving fundamentals, job growth and population growth are driving devel-opment across the state. This is increasing the need for land to attract more development.
CAPITAL AVAILABILITY The low interest rate environment continues to drive capital to real estate. Improving fundamentals is driv-ing the need for more development and capital is fol-lowing the demand. Respondents believe these trends will continue in future quarters despite the threat of interest rate increases this year.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
7
UF COMMERCIAL REAL ESTATE SENTIMENT INDEX The Sentiment index increased this quarter to its high-est level since the 3rd quarter of 2006. Developers con-tinue to drive the index as development activity picks across the state. Appraisers continue to have the least optimistic view as regulation has driven fees lower. Lender expectations dropped this quarter, but remain positive about the next year.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
8
Section 1: Investment Outlook
The investment outlook for Florida improved to a survey high this quarter. Despite uncertainty in the national economic view, Florida’s economy continues to improve. Increased employment, record tourism and international investment have proven a catalyst for the real estate markets. These factors are leading respondents to believe that fundamentals will continue improving in future quarters across all sectors. These improving fundamentals along with a shortage of supply are increasing development activity across the state and therefore the outlook for investment in land, which reached a survey high.
Respondents remain concerned about the uncertainty in Washington D.C. and the effect on interest rates. Con-sensus among the respondents is that interest rates will increase but worry about the rate of increase and the timing.
This investment index is weighted 40 percent on single family and residential condominium development, 40 percent on rental property of all types, and 20 percent on undeveloped land. Thus, it is at least fifty percent driv-en by the residential development outlook.
Section 2: Residential Development
EXPECTED ABSORPTION RATES
The outlook for residential absorption improved this quarter with respondents continuing to believe that ab-sorption will increase. The improved Florida economy will help the housing market as we continue to see net population growth and job growth in the state.
Additionally, a robust winter selling season boosted ex-pectations and drove builders to expand lot inventories to drive growth. Banks are starting to lend more in this market which will help additional potential borrowers take advantage of the current interest rates before they go up again. However, there remains a credit crunch in the housing market that continues to hold down growth opportunities.
-‐2 -‐1.5 -‐1
-‐0.5 0
0.5 1
1.5 2
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Investment Outlook: Florida Real Estate
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
-‐1 -‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8 1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Residen0al Absorp0on Rates
Single Family Development
Condominium Development
Expecting Increase
Expecting Decrease
Expecting No Change
The condo market is primarily driven by South Flori-da. Foreign buyers and all cash transaction continue to dominate the marketplace.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
9
EXPECTED PRICE CHANGES
Expectations for price changes increased this quarter for both single family and condo developments after several quarters of decline. Continued improvement of Florida’s economy will continue to have a positive impact on pricing.
However, there are increasing headwinds as real em-ployee wages remain stagnant and expectations that in-terest rates will again start increasing. Continuation of these trends will have a significant impact on builders’ ability to increase pricing. In the meantime, builders are able to increase pricing to offset the increased cost of materials and labor.
-‐2 -‐1.8 -‐1.6 -‐1.4 -‐1.2 -‐1
-‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8 1
06-‐Q1
06-‐Q3
07-‐Q1
07-‐Q3
08-‐Q1
08-‐Q3
09-‐Q1
09-‐Q3
10-‐Q1
10-‐Q3
11-‐Q1
11-‐Q3
12-‐Q1
12-‐Q3
13-‐Q1
13-‐Q3
14-‐Q1
14-‐Q3
Outlook for Prices of New Residences
Single Family Development Condominium Development
Rising Faster Than Inflation
Declining
Rising at the Rate of Inflation
Rising Slower than the rate of Inflation
-‐2
-‐1.5
-‐1
-‐0.5
0
0.5
1
1.5
2
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Investment: Residential Development
Single Family Development Condominium Development
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
INVESTMENT OUTLOOK
The outlook for investment in residential development increased again this quarter. Better fundamentals for new residential development are having a positive im-pact on the investment outlook. A strong selling season for our part-time winter residents boosted builder confidence. An improving economy continues to drive additional investment in the residential market. Con-tinued job growth and population growth will drive the need for additional housing in key markets which will spur investment. Investors will continue to keep a close eye on the interest rates as they make investment decisions in this sector. An increase in investment in land will drive land prices higher which could have a negative impact on this sector moving forward.
Section 3: Apartments
EXPECTED OCCUPANCY
The outlook for occupancy in market rate apartments improved slightly this quarter, with respondents expecting occupancy to stabilize. Their views reflect the additional inventory being delivered to the market as well as the already high levels of occupancy in the market. Respondents continue to believe that demo-graphics are favorable for this sector in the near future, which will have a positive impact on absorption of additional supply. Additionally, any increase in interest rates will prevent more buyers from purchasing and force them to remain renters.
-‐1
-‐0.8
-‐0.6
-‐0.4
-‐0.2
0
0.2
0.4
0.6
0.8
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Occupancy: Apartments
Apartments -‐ Market Rent
Apartments -‐ Condo Conversion
Expecting Increase
Expecting Decrease
Expecting No Change
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
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If developers remain disciplined and don’t overbuild, the apartment sector will remain a good investment.
EXPECTED RENTAL RATES
Expectations for rental rates improved slightly this quarter for market rent apartments as respondents continue to expect rental rates to increase with infla-tion. Demand continues to outweigh supply which has driven both occupancy and rents higher. This trend will continue as demographic preferences lean to-ward rental living in urban areas. However as the large number of new units under construction are delivered to the market there will be increased pressure on rents to maintain occupancy at older well located properties. This should continue over the near future.
INVESTMENT OUTLOOK
With strong occupancy and rent expectations, the investment outlook remains positive for apartments. Despite rising interest rates that may impact cap rates, investors still like this market. In part, they are buff-ered from rising cap rates because occupancy and rent has grown faster than inflation over the past couple years.
This sector continues to benefit from a tremendous amount of capital availability, however, rising interest rates will make core deals harder to underwrite. An-other potential risk, although more long term, is the ul-timate resolution of Fannie Mae and Freddie Mac. The GSAs provide a lot of the liquidity in the apartment market and winding them down will have a negative impact on the market.
Another factor in the investment outlook is the avail-ability of core deals. Fewer opportunities exist in this market which is driving capital to secondary markets. This movement is keeping cap rates stable as fewer of the very low cap rate deals get completed.
-‐2 -‐1.8 -‐1.6 -‐1.4 -‐1.2 -‐1
-‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8 1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Rental Rates -‐ Apartments
Apartments-‐-‐Market Rent
Apartments-‐For Condo Conversion
Rising Faster Than Inflation
Declining
Rising at the Rate of Inflation
RisingSlower than the Rate of Inflation
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
06-Q
1
06-Q
4
07-Q
3
08-Q
2
09-Q
1
09-Q
4
10-Q
3
11-Q
2
12-Q
1
12-Q
4
13-Q
3
14-Q
2
Outlook for Investment: Apartments
Apartments-Market Rent
Apartments-For Condo Conversion
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
11
CAP RATES
Cap rates remained stable at 6.25% this quarter for market rent apartments. Despite the outlook for higher interest rates, rental growth continues at rates above inflation. Large amounts of capital continue to look for deals in this sector. However, with fewer core deals available capital has started pursuing secondary mar-ket deals or new development. These factors work to maintain cap rates at current levels. Increasing interest rates and the additional supply coming to the market may work together to slightly increase caps rates over the next year.
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Current Cap Rates -‐ Apartments
Apartments -‐ Market Rent
Apartments -‐ Condo Conversion
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Cap Rates -‐ Apartments
Apartments -‐ Market Rent
Apartments -‐ Condo conversion
Expecting Increase
Expecting Decrease
Expecting No Change
REQUIRED YIELDS
Required yields remained stable at 9% this quarter. De-spite the prospect of higher interest rates, apartment fundamentals provide assurance to investors that they are appropriately pricing risk in their yield require-ments. Demographics, population growth and prefer-ences will continue to drive investment in this sector and that competition for deals should insure that yields remain low in the coming quarters.
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 22.0% 24.0% 26.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Required Yields -‐ Apartments
Apartments -‐ Market Rent Apartments -‐ Condo Conversion
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Required Yields -‐ Apartments
Apartments -‐ Market Rent
Apartments -‐ Condo conversion
Expecting Increase
Expecting Decrease
Expecting No Change
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
12
Section 4: Industrial
EXPECTED OCCUPANCY
The outlook for occupancy in the industrial sector declined this quarter but remains strong with most respondents believing that occupancy will increase. Continued improvement in the economy is generating more construction employment and small business starts which traditionally use flex space. Additionally, the continued strong trade with Latin America is hav-ing a positive impact on warehouse space.
Retailers continue to reinvent their business models in a race to provide next day or same day delivery. This is changing the face of industrial real estate as warehouse space is becoming a necessity to get closer to the end consumer. Amazon’s two distribution facilities in the Tampa/Lakeland markets are just the start of what will be a continuous expansion of warehouse space.
EXPECTED RENTAL RATES Industrial rents are expected to rise with inflation over the next year. Continued improvement in occupancy will put upward pressure on rents. New development is coming, especially in the single tenant space, which will also push rental rates higher.
Continued growth in construction employment is expected across Florida which will continue to push occupancy and therefore rents in the near term.
Locations with multimodal connections will continue to command the highest rents and rent growth along with technology parks.
-‐1
-‐0.8
-‐0.6
-‐0.4
-‐0.2
0
0.2
0.4
0.6
0.8
1
06-‐Q
1
06-‐Q
4
07-‐Q
3
08-‐Q
2
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1
09-‐Q
4
10-‐Q
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11-‐Q
2
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12-‐Q
4
13-‐Q
3
14-‐Q
2
Outlook for Occupancy: Industrial
Warehouse and Distribu<on: Class A
Flex Space, R & D, Office-‐Warehouse: Class A
Expecting Increase
Expecting Decrease
Expecting No Change
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
06-Q
1
06-Q
4
07-Q
3
08-Q
2
09-Q
1
09-Q
4
10-Q
3
11-Q
2
12-Q
1
12-Q
4
13-Q
3
14-Q
2 Outlook for Investment:
Industrial
Warehouse and Distribution: Class A
Flex Space, R & D, Office-Warehouse
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
-‐2 -‐1.8 -‐1.6 -‐1.4 -‐1.2
-‐1 -‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8
1
06-‐Q
1
06-‐Q
4
07-‐Q
3
08-‐Q
2
09-‐Q
1
09-‐Q
4
10-‐Q
3
11-‐Q
2
12-‐Q
1
12-‐Q
4
13-‐Q
3
14-‐Q
2
Outlook for Rental Rates -‐ Industrial
Warehouse and Distribu<on: Class A
Flex Space, R & D, Office-‐Warehouse: Class A
Rising Faster Than Inflation
Declining
Rising at the Rate of Inflation
Rising Slower than the Rate of Inflation
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
13
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Current Cap Rates -‐ Industrial
Warehouse and Distribu=on
Flex, R&D, Office-‐Warehouse
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Cap Rates -‐ Industrial
Warehouse and Distribu=on Flex, R&D, Office-‐warehouse
Expecting Increase
Expecting Decrease
Expecting No Change
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Required Yields -‐ Industrial
Warehouse and Distribu=on
Flex, R&D, Office-‐warehouse
Expecting Increase
Expecting Decrease
Expecting No Change
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
06-‐Q
1
06-‐Q
4
07-‐Q
3
08-‐Q
2
09-‐Q
1
09-‐Q
4
10-‐Q
3
11-‐Q
2
12-‐Q
1
12-‐Q
4
13-‐Q
3
14-‐Q
2
Required Yields -‐ Industrial
Warehouse and Distribu=on: Class A Flex Space, R & D, Office-‐Warehouse: Class A
INVESTMENT OUTLOOK
The outlook for investment in industrial real estate rebounded this quarter with Warehouse expectations reaching survey highs. The continued transformation of the retail supply trade and improved exports are influencing investor expectations for Warehouse and distribution space. The completion of the Panama Canal expansion and the increase in imports will also require more distribution space, particularly at multi-modal locations.
CAP RATES
Cap rates have increased slightly for both sectors with flex space at 8.5% and warehouse at 7.5%. Respon-dents expect that rates will remain stable in this sector. Continued fundamental growth appears to offset any uncertainty with interest rate increases this year.
YIELDS
Required yields for warehouse space increased to 9.7% while yields for flex space increased to 10.3%. Respon-dents expect yields to remain stable over the next year as improving fundaments offsets potential interest rate increases.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
14
Section 5: Office
EXPECTED OCCUPANCY
The outlook for occupancy in Class A office dropped significantly this quarter. While the outlook remains strong, fewer respondents believe that occupancy will increase over the coming year. The outlook for Class B increased slightly with almost 60% of respondents be-lieving occupancy will grow in this sector. The contin-ued recovery of jobs in Florida, particularly office space jobs is influencing respondents’ outlook. This segment is also benefitting from little new development which is allowing current buildings time to improve occupan-cies with a slowly improving economy.
Despite the improvement in office jobs, companies continue to be very cautious about the amount of space they need per worker. As these companies bring in new staff, they do so in existing office space. This trend will continue to regulate new development and continue to have a positive impact on occupancy. However, the continued reduction in office space per worker puts tremendous demands on current space that was not designed for the number of people using the space. Demands on plumbing, heating and air systems and parking will provide challenges to landlords and may drive new development that can plan for these trends. Given these competing trends, we should expect that occupancy will continue to improve in the short term but level off as development starts.
-‐1
-‐0.8
-‐0.6
-‐0.4
-‐0.2
0
0.2
0.4
0.6
0.8
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Occupancy: Office
Class A Office
Class B Office
Expecting Increase
Expecting Decrease
Expecting No Change
EXPECTED RENTAL RATES The outlook for rental rates increased for Class A space as more respondents believe that rents will increase slightly more than inflation. Class B space remains stable with stable rents over the next year. An improv-ing job market and little new development in the office sector is helping occupancy grow and allowing owners to raise rates and reduce concessions. Well located office properties in urban environments are benefiting from the shift of young employees to the urban core.
In the face of increasing demand from job growth and more companies moving to Florida, development of new office space should be needed over the next year. However current rents in most markets don’t justify the new development. In the short term this will posi-tively impact existing buildings with better rental rates.
-‐2 -‐1.8 -‐1.6 -‐1.4 -‐1.2 -‐1
-‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8 1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Rental Rates -‐ Office
Class A Office Class B Office
Rising Faster Than Inflation
Declining
Rising at the Rate of Inflation
Rising Slower than the Rate of Inflation
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
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INVESTMENT OUTLOOK
The outlook for investment remains strong for both office sectors. Limited development, improvement in office employment and growing rents are attracting investors to the office sector. Issues will remain with increasing stress on office infrastructure as companies continue to put more people in the same space. Newer buildings that can adapt to the new space per employee ratios and provide operating cost savings will benefit over other buildings.
CAP RATES
Cap rates increased slightly this quarter with Class A cap rates at 7.5% and Class B cap rates at 8.1%. Respon-dents expect the rates to remain stable over the next year. Improving fundamentals should offset any inter-est rate increase. Additionally, as this sector contin-ues to improve additional debt capital will enter the market and improve liquidity which will help maintain current cap rates.
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
06-Q
1
06-Q
4
07-Q
3
08-Q
2
09-Q
1
09-Q
4
10-Q
3
11-Q
2
12-Q
1
12-Q
4
13-Q
3
14-Q
2
Outlook for Investment: Office
Class A Office
Class B Office
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Cap Rates -‐ Office
Class A Office
Class B Office
Expecting Increase
Expecting Decrease
Expecting No Change
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Current Cap Rates -‐ Office
Class A Office Class B Office
YIELDS Required yields increased slightly this quarter with Class A yields at 8.6% while Class B yields increased to 10.1%. Like cap rates, respondents believe that yields will continue to be stable at the current levels over the next year. Improving fundamentals will offset any interest rate increases over that period. Continued growth in office employment and limited development of new office space will limit any increases in the risk adjusted returns for this sector.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
16
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Required Yields -‐ Office
Class A Office Class B Office
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Required Yields -‐ Office
Class A Office Class B Office
Expecting Increase
Expecting Decrease
Expecting No Change
Section 6: Retail
EXPECTED OCCUPANCY
The outlook for occupancy remains strong for retail occupancy across all sectors this quarter. Despite slight declines in free standing retail and strip centers, respondents expect increasing occupancy over the next year. This optimism is being driven by the improving economy, consumer confidence, and growth within Florida. Retailers continue to look for quality locations throughout Florida and have increased their store openings for the coming year. The University of Florida Bureau of Business and Economic Research’s consum-er sentiment index was 96.8 in June, the highest level in over ten years. Additionally, the state continues to set records with the number of visitors coming to Flor-ida which is also helping to boost retail sales. These factors should continue to drive occupancy in retail going forward.
-‐1
-‐0.8
-‐0.6
-‐0.4
-‐0.2
0
0.2
0.4
0.6
0.8
1 06
-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Occupancy: Retail
Large Centers
Neighborhood Centers
Strip Centers
Free Standing
Expecting Increase
Expecting Decrease
Expecting No Change
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
17
EXPECTED RENTAL RATES
The outlook for rental rates remained positive this quarter with most respondents believing that rental rates will rise with inflation. A larger number of re-spondents this quarter think that large centers will drive rents higher than inflation. Given the strong out-look for occupancy, we would expect that rental rates will grow in the absence of new supply and reduction in available space. Continued growth in job production and an improving economy should maintain con-sumers’ confidence which will encourage continued spending. Retailer expansion and competition for the best locations will continue to have a positive effect on rental rates.
INVESTMENT OUTLOOK
The outlook for investment in retail remains positive across all sectors. Improving fundamentals continue to drive investment outlook. Florida’s economy and job growth are having a positive impact on consumers which will benefit retailers. As long as Washington does nothing to negatively impact consumers, this trend will continue. Online retailing continues to exert pressure on retailers particularly in the electronics
-‐2 -‐1.8 -‐1.6 -‐1.4 -‐1.2 -‐1
-‐0.8 -‐0.6 -‐0.4 -‐0.2
0 0.2 0.4 0.6 0.8 1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Rental Rates -‐ Retail
Large Centers Neighborhood Centers Strip Centers Free Standing
Rising Faster Than Inflation
Declining
Rising at the Rate of Inflation
Rising Slower than the Rate of Inflation
-‐2
-‐1.5
-‐1
-‐0.5
0
0.5
1
1.5
2
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Outlook for Investment: Retail
Large Centers Neighborhood Centers Strip Centers Free Standing
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
and book sectors, however, retails have adapted to the online space with multichannel platforms of their own. They’ve also done a great job of integrating the online and in-store shopping experience. Grocery anchored centers continue to be the favored investment option for investors, who prefer best in class grocers in prima-ry locations.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
18
CAP RATES
Cap rates continue a slow decline in the retail sector with rates for large centers, neighborhood centers, strip centers and free standing retail at 6.8%, 6.8%, 8.1% and 6.5% respectively. Respondents currently be-lieve that cap rates will remain stable over the coming year as continued improvement in fundamentals will offset any increase in interest rates.
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Current Cap Rates -‐ Retail
Larger Centers Neighborhood Centers
Strip Centers Free Standing
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Cap Rates -‐ Retail
Larger Centers
Neighborhood Centers
Strip Centers
Free Standing
Expecting Increase
Expecting Decrease
Expecting No Change
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Expected Change in Required Yields -‐ Retail
Larger Centers
Neighborhood Centers
Strip Centers
Free Standing
Expecting Increase
Expecting Decrease
Expecting No Change
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Required Yields -‐ Retail
Large Centers Neighborhood Centers Strip Centers Free Standing
YIELDS
Yields remained relatively stable this quarter. Yields for Large Centers, Neighborhood Centers, Strip Cen-ters and Free Standing retail reached 8.7%, 8.8%, 9.7% and 7.7%. Yields reflected improved fundamentals this quarter along with increased competition for invest-ment capital. Respondents believe that yields will re-main steady as improving fundamentals will offset any increase in interest rates over the next year.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
19
Section 7: Outlook for Investment in Undeveloped Land
LAND WITHOUT ENTITLEMENTS OR WITH RESIDENTIAL ENTITLEMENTS The outlook for investment in land continues to be positive in both sectors with both reaching survey highs. The improving housing sector is driving land pricing higher as they continue to buy entitled prop-erty to help maintain the current growth levels. This is driving investment in non-entitled land as investors look to entitle the land and capture the home builders’ attention. Additionally, land for apartment investment is in high demand and driving pricing significantly higher. Investors will continue to keep an eye on in-terest rates as that could have a negative impact on the housing market.
-2
-1.5
-1
-0.5
0
0.5
1
1.5
2
06-Q
1
06-Q
4
07-Q
3
08-Q
2
09-Q
1
09-Q
4
10-Q
3
11-Q
2
12-Q
1
12-Q
4
13-Q
3
14-Q
2
Outlook for Investment in Land:
No Entitlements, Residential, Commercial
Land Without Entitlements
With Residential Entitlements
With Office/Retail Entitlements
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
LAND WITH OFFICE OR RETAIL ENTITLEMENTS
The outlook for investment in land with office or retail entitlements increased this quarter reaching a new survey high. Respondents believe that office and retail fundamentals are improving to the point that new development is warranted. The retail sector is still the favored of the two sectors and new retail entitled land will be purchased for investment and development. However, with an improving office market and office job growth, investors will start buying land for future office development.
LAND WITH HOSPITALITY ENTITLEMENTS
The investment outlook for land with hospitality en-titlements declined slightly this quarter but remains positive. Tourism in Florida continues to set records and is driving resurgence in the hotel sector. This trend is having the most impact in Orlando and Miami which will see the bulk of the new hotel development. This trend should continue with a higher percentage of visi-tors from foreign markets.
-‐2
-‐1.5
-‐1
-‐0.5
0
0.5
1
1.5
2
06-‐Q
1
06-‐Q
4
07-‐Q
3
08-‐Q
2
09-‐Q
1
09-‐Q
4
10-‐Q
3
11-‐Q
2
12-‐Q
1
12-‐Q
4
13-‐Q
3
14-‐Q
2
Outlook for Investment in Land: Hospitality, Industrial,
Urban Renewal
Land With Hospitality En>tlements With Warehouse/R & D En>tlements For Urban Renewal
Bad Time To Buy
Good Time To Buy
Mixed Time To Buy
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
20
LAND WITH ENTITLEMENTS FOR WAREHOUSE OR R&D
The investment outlook for land with warehouse or R&D entitlements declined slightly this quarter but remains positive. Investment in warehouse projects is picking up in port areas, particularly Miami, where exports to South America are up and require additional warehouse space. Ports throughout Florida continue to focus on expansion in preparation for the expansion of the Panama Canal. Retail companies continue to refine their business models to compete with online shopping which is driving additional demand for warehouse space closer to the consumer. This trend will have a positive impact on areas connected with major roads and multi-modal sites.
LAND FOR URBAN RENEWAL
The outlook for investment in urban renewal improved this quarter. As more people move toward urban areas investment in land for urban renewal will continue to increase. This trend is not limited to the major markets as secondary and even tertiary markets like Gainesville are focused on urban design and development. The real question is how long the trend will continue as Gen-eration Y ages and starts having kids. Will urban areas continue to see a renaissance or will Gen. Y move to the burbs with better schools and more room for the kids to play?
Section 8: Business and Capital Availability Outlook
CAPITAL AVAILABILITY
The outlook for capital availability increased slightly this quarter for both acquisition and development cap-ital. Respondents continue to believe that capital will increase over the coming year. An increase in interest rates will not impact the capital flowing to real estate unless the risk adjusted returns decline in relation to other asset classes. Additionally, in an inflationary economy, more investors will look for hard assets to invest in, which will keep real estate in a favorable position.
-‐1
-‐0.5
0
0.5
1
06-‐Q1
06-‐Q4
07-‐Q3
08-‐Q2
09-‐Q1
09-‐Q4
10-‐Q3
11-‐Q2
12-‐Q1
12-‐Q4
13-‐Q3
14-‐Q2
Capital Availability
Capital for Development Capital for AcquisiBons
Expecting Increase
Expecting Decrease
Expecting No Change
Debt capital is continuing to increase for all asset class-es as more banks get back into the lending business. Improving asset prices are improving bank balance sheets and allowing them to loan more. This should continue, albeit with higher rates as interest rates rise.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
21
UF COMMERCIAL REAL ESTATE SENTIMENT INDEX
The UF Commercial Real Estate Sentiment Index increased this quarter to its highest level since the 3rd quarter of 2006. Florida’s improved economy along with improved job growth and record tourism are hav-ing a positive impact on our respondents’ outlook.
The increase in the index was driven by growing optimism from developers, owners and brokers. Im-proved fundamentals are generating the need for new development across several sectors, which is boosting the outlook for developers and other service providers who generally focus on the development side of the business.
The least optimistic of the respondents are the apprais-ers, who continue to face tremendous pressure from the Dodd-Frank legislation which is pushing fees and quality lower. Our respondents believe there could be a growing crisis in the appraisal industry as the industry grows older with fewer young professionals entering the business.
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
06-‐
06-‐
07-‐
08-‐
09-‐
09-‐
10-‐
11-‐
12-‐
12-‐
13-‐
14-‐
UF Commercial Real Estate Sen3ment Index
2.5
3.5
4.5
5.5
6.5
7.5
8.5
06-‐Q4 07-‐Q3 08-‐Q2 09-‐Q1 09-‐Q4 10-‐Q3 11-‐Q2 12-‐Q1 12-‐Q4 13-‐Q3 14-‐Q2
UF Commercial Real Estate Sen3ment Index
(by profession)
Owner/investor/manager Lender
Broker Developer
Appraiser Other service provider, (consultant, legal other)
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
22
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
SF Development Condominiums
Apartments -‐ Low Inc. Apartments -‐ Mkt Rent
Condo Conversions Warehouse and Dist.
Flex Space, R&D Office -‐ Class A Office -‐ Class B
Large Retail Neighborhood Centers
Strip Retail Hospitality -‐ Business Hospitality -‐ Economy
Free-‐standing-‐net leased
Investors Q1-‐15
Private RE Co.s REITs InsYtuYon Foreign
Section 9: Dominant Investors
Respondents were asked to indicate which of five investor groups they perceived to be the most active for each type of property they analyze. Private owners
have returned as the dominant buyer across most prop-erty types. However, real estate companies and REITS remain strong buyers.
Section 10: Characteristics of Survey Respondents
PROFESSION OF RESPONDENTS Survey responses increased this quarter to 97 respon-dents. Approximately 57 % of the respondents reported being an appraiser; 78% with designations of MAI,
6
6
8
4
0
0
3
3
2
8
6
11
6
2
7
8
27
38
33
43
4
6
4
12
3
3
0
3
24
10
12
13
0 20 40 60 80 100 120
14-‐Q1
14-‐Q2
14-‐Q3
15-‐Q1
Owner/ Investor Lender Broker
Developer Appraiser: MAI, SREA, SRPA Appraiser: Other DesignaKon
Other Appraiser/ Consultant Other Service Provider
SREA or SRPA. The next largest groups were other ser-vice providers and brokers.
Survey of Emerging Market Conditions
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May 2015
23
MARKETS OF FAMILIARITY
Each respondent was asked to select up to four regional markets with which they are familiar. In the latest survey, these choices accumulated to 137 observations. The highest number of responses was for
PROPERTY TYPES OF FAMILIARITY
Each respondent was asked to select up to three property types with which they were familiar. Altogether, 206 selections were made in the latest survey round. Single family development was selected by 20 respondents while condominium
the Tampa-St. Pete and Orlando markets, which had 19 observations. The lowest respondent support came from the Treasure Coast with 2.
development was selected by 9. The largest response for commercial property was in Class B Office with 36 responses. The lowest response was for Low Income Apartments with 2.
9
9
10
17
8
8
9
15
7
9
12
12
4
3
4
2
4
6
5
10
2
8
3
5
9
15
10
19
2
5
1
6
10
18
14
19
5
10
5
7
7
9
9
8
9
2
7
9
5
5
4
8
14-‐Q1
14-‐Q2
14-‐Q3
15-‐Q1
Dade Broward Palm Beach Treasure Coast
Southwest coast Daytona Beach Orlando Lakeland -‐Winter Haven
Tampa -‐St Petersburg Sarasota -‐Bradenton Jacksonville Gainesville -‐ Ocala
Pensacola -‐ Tallahassee
14
15
16
20
9
8
9
9
1
3
5
2
10
11
18
31
0
0
2
3
8
13
9
8
7
7
7
4
11
10
8
14
16
20
19
36
7
7
6
9
11
10
6
14
14
21
18
19
0
6
3
9
2
5
3
6
8
9
7
14
4
7
8
8
0 50 100 150 200 250
14-‐Q1
14-‐Q2
14-‐Q3
15-‐Q1
Single Family Development
Condominium Development
Apartments -‐ Low Income
Apartments -‐ Market Rent
Condo Conversion
Warehouse & Dist.
Flex Space, R & D
Office: Class A
Office: Class B
Retail -‐ Large
Neighborhood Centers
Strip Centers
Hospitality-‐ Business
Hospitality -‐ Economy
Free Standing
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
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Section 11: Details of Cap Rates, Yields and Expected Changes
Table 1 summarizes estimates of cap rates and yields for twelve property types over the last four quarters of the survey. In addition, this table shows the distri-bution of expectations for changes in each reported cap rate and yield. In particular, the table reports the percent of respondents expecting each cap rate and yield to either rise or fall in the future. Excluded from
this table is the percentage of respondents whom are expecting no change. This third percentage can be computed as 100 less the two percentages reported. Since prior sections discuss the content of Table 1, further comment is not given here. The table is simply provided as a reference to facilitate application of the survey results.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
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Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
26
Section 12: Local MarketsStarting with the 3rd quarter of 2011, we have changed the presentation of the local market data to a more graphical format. This makes it easier, at a glance, to get a sense of what is happening in each market. As part of the transition you will notice that each report is broken up into property types. Additionally, you will see a table with indicating the direction of our respon-dents’ expectations for the various indicators. Please use the following legend to interpret the results.
For future expectations you will see the following sym-bols. Please refer to their definition for interpretation:
increasing trend. An upward but diagonal pointing arrow indicates a slightly positive or increasing trend. A side pointing arrow indicates a neutral trend. A downward but diagonal pointing arrow indicates a slightly negative or slightly declining trend. A downward pointing arrow indicates a decreasing or negative trend.
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
27
Regional Market Report for Dade
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Dade
Mul
ti-F
amily
Pro
pert
ies
5.725.27
5.545.01
4.35
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.43
7.82 7.84
11.50
8.98
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Private Buyers, 100%
Investor Profile ‐ Condo Conversion
Private Buyers25%
R.E. Companies
25%REITs17%
Institutions25%
Foreign Buyers8%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
28
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Dade
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
6.58
6.38
7.15
5.80
6.00
6.20
6.40
6.60
6.80
7.00
7.20
7.40
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.12
7.81
8.60
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex Space
Private Buyers67%
Institutions33%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
29
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Dade
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
6.53
5.70
6.67
6.837.33
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.32
7.237.55
8.419.06
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class B
R.E. Companies100%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
30
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Dade
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 5.85 5.94 6.38Neighborhood Retail 5.87 6.33Strip Centers 7.60 7.64 7.52Free Standing 5.87 5.88 5.93
5.00
5.50
6.00
6.50
7.00
7.50
8.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 7.68 7.38 8.00Neighborhood Retail 8.98 8.12Strip Centers 9.67 8.87 8.41Free Standing 7.92 6.92 6.67
5.005.506.006.507.007.508.008.509.009.5010.00
Yield Trend
Private Buyers, 100%
REITs, 25%
Institutions, 50%
Investor Profile ‐Neighborhood Center
Private Buyers34%
R.E. Companies33%
REITs33%
Investor Profile ‐ Retail‐Large
Private Buyers50%
Foreign Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
31
Regional Market Report for Broward
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Broward
Mul
ti-F
amily
Pro
pert
ies
5.735.13
5.54
4.864.34
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.118.59 8.09
12.28
9.24
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Private Buyers, 100%
Investor Profile ‐ Condo Conversion
Private Buyers12%
R.E. Companies
25%
REITs25%
Institutions38%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
32
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Broward
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
6.59
6.24
7.14
5.60
5.80
6.00
6.20
6.40
6.60
6.80
7.00
7.20
7.40
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
7.80
8.59
8.86
7.20
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
9.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex Space
Private Buyers100%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
33
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Broward
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
6.54
5.56
6.66
7.72
6.69
7.32
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.00 8.00
7.80
9.13 9.199.31
7.00
7.50
8.00
8.50
9.00
9.50
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class B
R.E. Companies100%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
34
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Broward
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 5.85 5.79 6.38Neighborhood Retail 5.88 5.68 6.32Strip Centers 7.61 7.50 7.51Free Standing 5.88 5.93
5.00
5.50
6.00
6.50
7.00
7.50
8.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 7.36 8.16 8.26Neighborhood Retail 8.66 8.32 8.38Strip Centers 9.35 9.65 8.66Free Standing 7.61 6.92
5.005.506.006.507.007.508.008.509.009.5010.00
Yield Trend
Private Buyers, 100%
REITs, 33%
Institutions, 33%
Investor Profile ‐Neighborhood Center
Private Buyers50%
REITs50%
Investor Profile ‐ Retail‐Large
Private Buyers67%
Foreign Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
35
Regional Market Report for Palm Beach
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Palm Beach
Mul
ti-F
amily
Pro
pert
ies
6.085.52 5.685.26
4.48
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.71
8.328.83
12.00
9.98
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Private Buyers, 50%
R.E. Companies,
50%
Investor Profile ‐ Condo Conversion
Private Buyers20%
R.E. Companies
40%
Institutions40%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
36
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Palm Beach
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
6.94
7.28
8.29
7.72
8.21
6.00
6.50
7.00
7.50
8.00
8.50
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.40
9.60
9.99
9.47
9.98
7.50
8.00
8.50
9.00
9.50
10.00
10.50
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
R.E. Companies, 100%
Investor Profile ‐ Flex Space
Private Buyers100%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
37
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Palm Beach
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
6.89
5.95
6.80
8.08
7.087.46
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.60
7.73
8.55
9.728.91
10.06
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class B
R.E. Companies100%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
38
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Palm Beach
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.21 6.52Neighborhood Retail 6.23 6.46Strip Centers 7.96 7.89 7.65Free Standing 6.23 6.13 6.07
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 7.96 9.00Neighborhood Retail 9.26 9.12Strip Centers 9.95 9.37 9.40Free Standing 8.20 7.42 7.66
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
Private Buyers, 100%
Investor Profile ‐Neighborhood Center
Private Buyers100%
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
39
Regional Market Report for Treasure Coast
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Treasure Coast
Mul
ti-F
amily
Pro
pert
ies
6.13
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
8.06
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Investor Profile ‐ Condo Conversion
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
40
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Treasure Coast
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.977.35
9.32
8.33 8.28
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.08
8.59
9.67
9.21
8.97
7.00
7.50
8.00
8.50
9.00
9.50
10.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
R.E. Companies, 100%
Investor Profile ‐ Flex Space
Private Buyers100%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
41
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Treasure Coast
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
erties
9.11
7.70 7.53
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
9.40
8.66
9.04
8.20
8.40
8.60
8.80
9.00
9.20
9.40
9.60
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class BInvestor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
42
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Treasure Coast
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood RetailStrip Centers 8.51 7.72Free Standing 7.26 6.74 6.14
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood RetailStrip Centers 9.12 8.39Free Standing 7.88 7.16 6.65
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Yield Trend
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
43
Regional Market Report for Southwest Coast
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Southwest Coast
Mul
ti-F
amily
Pro
pert
ies
5.13
6.02
4.87 4.83
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
8.54 8.74
12.22
9.89
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Private Buyers, 100%
Investor Profile ‐ Condo Conversion
Private Buyers33%
REITs50%
Institutions17%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
44
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Southwest Coast
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.04
8.39
7.33
8.55
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.26
9.859.69
9.89
7.00
7.50
8.00
8.50
9.00
9.50
10.00
10.50
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Private Buyers, 100%
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
45
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Southwest Coast
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
6.99
5.56
7.156.70
7.81
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.457.95
8.45
9.13
9.96
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class B
REITs50%
Institutions50%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
46
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Southwest Coast
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.30 5.80 6.86Neighborhood Retail 6.33 5.68 6.81Strip Centers 8.06 7.51 8.00Free Standing 6.41
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 7.82 8.10 8.91Neighborhood Retail 9.12 8.27 9.03Strip Centers 9.81 9.60 9.31Free Standing 7.57
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
R.E. Companies,
100%
Investor Profile ‐Neighborhood Center
Institutions100%
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
R.E. Companies
50%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
47
Regional Market Report for Daytona Beach
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Daytona Beach
Mul
ti-F
amily
Pro
pert
ies
6.47
6.11
5.90
6.00
6.10
6.20
6.30
6.40
6.50
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
13.79
7.95
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Investor Profile ‐ Condo Conversion
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
48
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Daytona Beach
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.33
8.68
6.50
7.00
7.50
8.00
8.50
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
12.48
14.08
11.50
12.00
12.50
13.00
13.50
14.00
14.50
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
49
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Daytona Beach
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
8.47
7.67
8.43
7.20
7.40
7.60
7.80
8.00
8.20
8.40
8.60
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
13.81
8.55
11.80
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 80%
R.E. Companies, 20%
Investor Profile ‐ Office: Class BInvestor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
50
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Daytona Beach
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.60Neighborhood Retail 6.62 6.66 7.44Strip Centers 8.35 8.48 8.63Free Standing 6.62 6.71
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 12.04Neighborhood Retail 13.34 7.68 10.87Strip Centers 14.03 9.01 11.15Free Standing 12.29 7.05
5.006.007.008.009.0010.0011.0012.0013.0014.0015.00
Yield Trend
Private Buyers, 100%
R.E. Companies,
50%
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
51
Regional Market Report for Orlando
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Orlando
Mul
ti-F
amily
Pro
pert
ies
6.18 6.05 5.925.79
4.73
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
11.18
9.07 9.43
12.75
10.58
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
R.E. Companies,
100%
Investor Profile ‐ Condo Conversion
R.E. Companies
29%
REITs43%
Institutions14%
Foreign Buyers14%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
52
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Orlando
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.04 7.167.52
8.39 8.24 8.45
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
9.879.06
10.20
11.46
10.22 10.58
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Private Buyers, 100%
Investor Profile ‐ Flex Space
REITs50%
Institutions50%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
53
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Orlando
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
6.996.48
7.05
8.187.70
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
10.07
8.489.14
11.1910.65
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
R.E. Companies, 100%
Investor Profile ‐ Office: Class B
R.E. Companies34%
REITs33%
Institutions33%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
54
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Orlando
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.31 6.71 6.76Neighborhood Retail 6.33 6.60 6.71Strip Centers 8.06 8.42 7.90Free Standing 6.66 6.31
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 9.43 8.63 9.60Neighborhood Retail 10.73 8.79 9.72Strip Centers 11.42 10.12 10.00Free Standing 8.16 8.26
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
Yield Trend
Private Buyers, 100%
REITs, 33%
Foreign Buyers, 33%
Investor Profile ‐Neighborhood Center
Private Buyers25%
REITs25%
Institutions50%
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
55
Regional Market Report for Lakeland
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Lakeland
Mul
ti-F
amily
Pro
pert
ies
6.37
6.09
5.90
5.95
6.00
6.05
6.10
6.15
6.20
6.25
6.30
6.35
6.40
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.84
8.89
8.40
8.60
8.80
9.00
9.20
9.40
9.60
9.80
10.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Investor Profile ‐ Condo Conversion
REITs100%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
56
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Lakeland
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.23
6.38
8.58
7.47
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.537.81
10.13
8.97
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
57
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Lakeland
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
8.37
7.87
7.60
7.70
7.80
7.90
8.00
8.10
8.20
8.30
8.40
8.50
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
9.86
10.11
9.70
9.75
9.80
9.85
9.90
9.95
10.00
10.05
10.10
10.15
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 33%
R.E. Companies, 33%
REITs, 33%
Investor Profile ‐ Office: Class BInvestor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
58
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Lakeland
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.50Neighborhood Retail 6.52 6.87Strip Centers 8.26Free Standing 6.53 6.48
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 8.09Neighborhood Retail 9.39 9.18Strip Centers 10.08Free Standing 8.34 7.72
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
R.E. Companies,
100%
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
59
Regional Market Report for Tampa
MULTI-FAMILY PROPERTIES
Survey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Tampa
Mul
ti-F
amily
Pro
pert
ies
6.34 6.26 6.226.00
5.02
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
10.43
8.73 8.63
12.41
9.77
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
R.E. Companies,
100%
Investor Profile ‐ Condo Conversion
Private Buyers18%
R.E. Companies
18%
REITs46%
Institutions9%
Foreign Buyers9%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
60
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tampa
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.20
7.37
7.10
7.15
7.20
7.25
7.30
7.35
7.40
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
9.13
8.72
8.50
8.60
8.70
8.80
8.90
9.00
9.10
9.20
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
61
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tampa
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
7.156.69
7.34
8.347.83 8.00
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
9.32
8.14 8.34
10.45
9.339.85
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 83%
R.E. Companies, 17%
Investor Profile ‐ Office: Class B
R.E. Companies25%
REITs25%
Institutions50%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
62
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tampa
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.47 6.93 7.06Neighborhood Retail 6.49 6.82 7.00Strip Centers 8.22 8.64 8.19Free Standing 6.49 6.87 6.61
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 8.68 8.29 8.79Neighborhood Retail 9.98 8.46 8.91Strip Centers 10.68 9.79 9.20Free Standing 8.93 7.83 7.45
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
R.E. Companies,
67%
REITs, 33%
Investor Profile ‐Neighborhood Center
R.E. Companies34%
REITs33%
Institutions33%
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
63
Regional Market Report for Sarasota
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Sarasota
Mul
ti-F
amily
Pro
pert
ies
6.69
6.90
6.46
6.20
6.30
6.40
6.50
6.60
6.70
6.80
6.90
7.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
10.13
8.698.03
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Investor Profile ‐ Condo Conversion
R.E. Companies
34%
REITs33%
Foreign Buyers33%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
64
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Sarasota
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.55
8.90 9.10
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.83
10.42
9.84
8.00
8.50
9.00
9.50
10.00
10.50
11.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
65
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Sarasota
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
7.51
8.69
8.46
8.24
6.80
7.00
7.20
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
9.02
10.15
9.29 9.25
8.40
8.60
8.80
9.00
9.20
9.40
9.60
9.80
10.00
10.20
10.40
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class BInvestor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
66
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Sarasota
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 6.82 7.56Neighborhood Retail 6.84 7.45 7.24Strip Centers 8.57 9.27 8.43Free Standing 6.85
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 8.39 8.25Neighborhood Retail 9.69 8.42 8.32Strip Centers 10.38 9.75 8.60Free Standing 6.86
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
R.E. Companies,
100%
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
R.E. Companies
50%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
67
Regional Market Report for Jacksonville
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Jacksonville
Mul
ti-F
amily
Pro
pert
ies
6.53
5.99
6.23
5.70
5.80
5.90
6.00
6.10
6.20
6.30
6.40
6.50
6.60
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.51
9.42
9.44
9.36
9.38
9.40
9.42
9.44
9.46
9.48
9.50
9.52
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
Investor Profile ‐ Condo Conversion
R.E. Companies
75%
REITs25%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
68
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Jacksonville
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
7.397.10
8.748.19
8.76
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
8.20
9.41
9.8010.57 10.58
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Private Buyers, 100%
Investor Profile ‐ Flex SpaceInvestor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
69
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Jacksonville
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
7.34 7.35
8.52
7.56
8.01
6.60
6.80
7.00
7.20
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.409.15
9.5310.01
10.66
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 80%
R.E. Companies, 20%
Investor Profile ‐ Office: Class B
REITs50%
Institutions50%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
70
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Jacksonville
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood Retail 6.68 6.55 7.01Strip Centers 8.41 8.37 8.20Free Standing 6.68 6.60 6.62
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood Retail 9.06 9.14 9.72Strip Centers 9.75 10.47 10.01Free Standing 8.01 8.51 8.26
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
Private Buyers, 100%
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Private Buyers100%
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
71
Regional Market Report for Gainesville/Ocala
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Gainesville/Ocala
Mul
ti-F
amily
Pro
pert
ies
6.376.91
6.105.72
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
9.258.54
12.93
9.69
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
R.E. Companies,
100%
Investor Profile ‐ Condo Conversion
Private Buyers33%
R.E. Companies
33%
REITs17%
Institutions17%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
72
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Gainesville/Ocala
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
8.52
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
9.31
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex Space
Private Buyers100%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
73
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Gainesville/Ocala
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
7.92
6.79
8.04
9.10
7.93
8.70
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
8.32
8.66
8.25
9.44
9.849.76
7.00
7.50
8.00
8.50
9.00
9.50
10.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Private Buyers, 100%
Investor Profile ‐ Office: Class B
Private Buyers50%
R.E. Companies50%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
74
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Gainesville/Ocala
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐Large 7.03 7.76Neighborhood Retail 6.92Strip Centers 8.98 8.74 8.89Free Standing
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐Large 8.81 8.71Neighborhood Retail 8.98Strip Centers 9.67 10.30 9.11Free Standing
5.00
6.00
7.00
8.00
9.00
10.00
11.00
Yield Trend
Investor Profile ‐Neighborhood Center
R.E. Companies100%
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
75
Regional Market Report for Tallahassee/Panhandle
MULTI-FAMILY PROPERTIESSurvey of Emerging Market Conditions May 2015
Future ExpectationsApartments Condo Conversion
Cap RatesYieldsInvestment OutlookOccupancyRents
Regional Market Report for Tallahassee/Panhandle
Mul
ti-F
amily
Pro
pert
ies
6.696.25
7.11
5.99 5.91
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Apartments ‐Market Condo Conversions
12.59
8.939.93
12.61
11.08
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Apartments ‐Market Condo Conversions
R.E. Companies,
100%
Investor Profile ‐ Condo Conversion
Institutions100%
Investor Profile ‐Apartments
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
76
INDUSTRIAL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tallahassee/Panhandle
Future ExpectationsWarehouse Flex Space
Cap RatesYieldsInvestment OutlookOccupancyRents
Indu
stria
l Prope
rties
8.71
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Warehouse Flex Space
10.70
0.00
2.00
4.00
6.00
8.00
10.00
12.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Warehouse Flex Space
Investor Profile ‐ Flex Space
Private Buyers100%
Investor Profile ‐Warehouse
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
77
OFFICE PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tallahassee/Panhandle
Future ExpectationsOffice: Class A Office: Class B
Cap RatesYieldsInvestment OutlookOccupancyRents
Office Prop
ertie
s
8.23
8.68
7.81
7.20
7.40
7.60
7.80
8.00
8.20
8.40
8.60
8.80
Q3‐14 Q4‐14 Q1‐15
Cap Rate Trend
Office:Class A Office:Class B
9.64
12.61
9.52
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
Q3‐14 Q4‐14 Q1‐15
Yield Trend
Office:Class A Office:Class B
Investor Profile ‐ Office: Class B
Private Buyers100%
Investor Profile ‐ Office: Class A
© 2015 University of Florida Bergstrom Center for Real Estate Studies
Survey of Emerging Market Conditions
© 2012-15 University of Florida Bergstrom Center for Real Estate Studies
May 2015
78
RETAIL PROPERTIES
Survey of Emerging Market Conditions May 2015
Regional Market Report for Tallahassee/Panhandle
Future Expectations
Retail‐Large Neighborhood Centers Strip Centers Free StandingCap RatesYieldsInvestment OutlookOccupancyRents
Retail Prop
ertie
s
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood Retail 6.83 7.89Strip Centers 8.57 8.62 9.08Free Standing 6.84
5.00
5.50
6.00
6.50
7.00
7.50
8.00
8.50
9.00
9.50
Cap Rate Trend
Q3‐14 Q4‐14 Q1‐15Retail‐LargeNeighborhood Retail 12.15 10.22Strip Centers 12.84 9.98 10.50Free Standing 11.09
5.00
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
Yield Trend
Foreign Buyers, 100%
Investor Profile ‐Neighborhood Center
Investor Profile ‐ Retail‐Large
Private Buyers100%
Investor Profile ‐Strip Centers
Investor Profile ‐Free Standing
© 2015 University of Florida Bergstrom Center for Real Estate Studies