NAIOP South Florida Hosts Roundtable Discussion on Market Behavior Post-Phase One of Reopening
Leading CRE experts examine emerging data on pandemic’s impact and implications for industry
NAIOP South Florida’s most recent “Navigating the Market” virtual series focused on the state of the commercial real estate industry three months into the COVID-19 pandemic, as South Florida immerges from strict social-distancing restrictions. The discussion, “Drilling Down: How is the Market Behaving Post-Phase One of Reopening?,” attracted more than 140 viewers with panelists shedding light on real-time leasing, lending, institutional investing and development trends.
Andrew Ansin, vice president of Sunbeam Properties who oversees development, management, marketing and leasing at the Miramar Park of Commerce, moderated the panel that included Lloyd Berger of Berger Commercial Realty, Tom Cornish of BankUnited and Kenneth Krasnow of Colliers International.
Here are some key takeaways from the discussion:
- Moderator Andrew Ansin noted that while people are feeling more comfortable navigating the realities of COVID, uncertainty about the economy remains high and will continue to remain so until businesses exhaust their PPP funding. “We have seen some fall-off on deals at the Miramar Park of Commerce, prompting us to offer 10 percent discounts and delayed rents on new leases,” he noted.
- Tom Cornish emphasized that those investors with good lender relationships likely will not see deals restricted. “Two kinds of capital are sitting on the sidelines. One is looking for distressed or severally impacted property that will come out of this without the need for enhancements,” he said. “We are also seeing some interest from patient, long-term investors seeking strategic asset opportunities.” Cornish added that, “From a lending perspective, the economy and real estate markets have moved in alignment and what has been good for the economy has been good for real estate regardless of asset class. South Florida’s economy will continue to remain healthy. This is a temporary shock and Florida retains what has made it attractive to outside investors.”
- Lloyd Berger: “The “northeast migration” is real. I am getting resumes and contracts from New Yorkers and others coming to Florida to escape the COVID crisis. This will play a significant role in helping the South Florida commercial real estate market make it through the crisis.” He added that contrary to some speculation about the diminishing need for office space, many tenants are asking for more space to help in social distancing. “Asset class will factor heavily into whether that commercial real estate property survives,” he said.
- Kenneth Krasnow: “Only a handful of traditional shopping malls will survive this pandemic and up to 35 percent of restaurants across our region will likely fail, while offices, industrial and multi-family real estate are holding up fairly well.” Krasnow ended the conversation on a positive note, stating that overall expectations of long-term market performance three to five years out remain optimistic.