Real estate investment trusts have enjoyed a good run of high yields over the past year. The possibility that interest rates might be hiked may slow the yields produced by REITs, leading investors in Florida and around the country to be more hesitant about purchasing shares in 2017.
It used to take many years for Florida real estate developers to build a network of financing contacts. Before the Internet and the passing of the JOBS Act, they had to have face-to-face meetings in order to find potential partners. Now, they are able to find accredited investors with the click of a mouse.
Commercial real estate developers in Florida may have to get creative while looking for financing as banks are shying away from commercial real estate lending. Both small and large banks have been selling off the loans that they already have and issuing fewer new loans. Now, there are more opportunities for private equity funds to take on commercial real estate loans.
Economic and political trends around the world may hold clues for Florida commercial real estate investors and developers as to where the sector is headed. For example, an oversupply of oil means a volatile energy market. This is likely to affect commercial real estate pricing and property market fundamentals. While it has been difficult for economies in places that are reliant on the oil industry, such as North Dakota and Houston, in most of the country, lower gas prices may mean more disposable income.