Florida commercial real estate developers are likely aware of an impending financing crunch. 2015 was a year of slow growth for the real estate lending industry, but 2016 promises to result in even fewer risky real estate loans. The head of commercial real estate at Wells Fargo has stated that the industry is approaching 2016 with far more caution as it enters the latter portion of a six-year recovery cycle.
Commercial real estate has traditionally been an area that could be difficult for the average Florida investor to become involved in. However, as crowdfunding has opened interesting doors for entrepreneurs, it has also begun to create opportunities for investors who previously lacked the resources needed to add commercial properties to their portfolios. Whereas it might have been necessary to have $50,000 or more to invest in this area in the past, some crowdfunding opportunities make this area accessible with as little as $5,000 in available capital.
Florida commercial real estate developers and investors have benefited from a general positive trend in both prices and occupancy rates. However, there have been some issues that create cause for concern. Specifically, investor expectations have become somewhat outsized, and rates on commercial mortgage bonds have not kept pace. This is causing investors to seek other ventures and leave a sizable gap in the possibilities for commercial financing.
Florida developers and commercial property owners seeking to expand may soon face competition from new international investors and private entities. In the wake of numerous real estate investment trusts becoming more discerning about their portfolio holdings, some are selling lower grade shopping malls to non-traditional owners. Observers say these market factors persist regardless of the fact that many such properties are in need of substantial improvements.
More Florida home sellers could soon take advantage of cutting-edge technology to show potential buyers the benefits of their properties. With some tech companies forecasting they will soon be able to build three-dimensional computer simulations of apartments and homes in about a day, more real estate agents and private sellers may adopt virtual reality to facilitate digital tours of their spaces.
Back in May, our blog discussed how Texas-based energy giant Kinder Morgan ran into a considerable setback in its attempts to build the Palmetto Pipeline, a proposed 200-plus mile petroleum pipeline, which would travel across Georgia and into northern Florida.