Waiting for the Right Time to Sell? It’s Now
As commercial real estate experts, we’re often asked to predict the future. That’s impossible of course, but here at Marcus & Millichap, we get pretty close to clairvoyance. For example, we can say with confidence that in 2014, CRE investments in the Orlando and Central Florida markets will continue to grow stronger and will enjoy high demand. With continued job growth and capital market growth, CRE continues to be positioned well among all asset classes as a safer, more predictable place to invest. In addition, inventory is low, so if you are considering a sell in the next two to three years, now is the time to act on this market.
What makes us so confident?
Orlando and Central Florida are seen as very lucrative markets for investors who are bringing out-of-market capital into the state. For example, if someone from the Northeast looks at the Florida marketplace, they see that properties in larger cities such as Fort Lauderdale and Miami are similar to their home markets in competition and price.
Central Florida is different because we still have very decent values with high returns. Out-of-market investors tend to see the market differently than their respective markets, therefore they will tend to pay a premium compared to the local investors.
Why is this?
First, we’re a youthful market. Our buildings have a shorter life history, and many assets here may be newer, requiring less mitigation up front to yield a good return. When we begin to market a property, we typically have multiple buyers within a short period of time competing for the asset. Even though development is happening, it’s not going to reduce that high demand for the next three to five years.
Second, we’re a destination location. People from all over the world know our hospitality marketplace, but we’re about more than Walt Disney World. The Orlando International airport is one of the busiest in the country, and the University of Central Florida is the second largest university in the United States. We have numerous high-quality industries including simulation and defense contracting, medical devices, and growing financial and legal sectors. It’s simply a great place to live, work, and play, with excellent recreation and a high standard of living.
While buyers are getting decent deals, sellers can also command an excellent price. If you’re a property owner considering a sale within the next two years, we’d love to talk to you. The market is ripe for sellers. Our approach is to spend time with you and really understand your needs and goals.
If it’s the right opportunity, we’ll take the property to market and create an auction-like environment in which multiple buyers bid. We do this with precision and rigor to provide multiple opportunities for our seller to choose from and obtain the highest price possible.