TAMPA-A business that started in a two-bedroom Tampa apartmentin December 2006 with two partners and a couple of assistants ismaking a name for itself in a distressed market. Indeed,Tampa-based Franklin Street is one of the fastest-growingcommercial real estate firms in the Southeast.

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Last week, Franklin Street moved 35 employees from itsheadquarters at Bay Center Drive in Tampa to a new, larger locationat 500 N Westshore Blvd. The new 6,580-square-foot office, leasedby Eola Capital, can house up to approximately 45 employees. Withadditional offices in Fort Lauderdale, Jacksonville and Atlanta,Franklin Street has more than 50 corporate employees and continuesto hunt more full-time staff.

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GlobeSt.com caught up with Andrew Wright, CEO and managingpartner of Franklin Street, a full-service commercial real statecompany headquartered in Tampa, to discuss his take on the marketand where he’s taking his fast-growth company.

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LeClaire: How has 2010 panned out for FranklinStreet so far? Has it lived up to yourexpectations?

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Wright: I wish I could tell you I hada great long-term plan. Really, we were just focusing on thefundamentals and doing what we do right. Fortunately for us, theresult has been a lot of success stories with our clients in eachone of our divisions and also a lot of industry notoriety.Competitors take notice. Colleagues take notice. It’s really helpedour recruiting effort. As we’ve gone out and talked to differentpeople in different areas, we’ve been very warmly received. To thatextent, we’ve exceeded our expectations.

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LeClaire: Having to expand your headquarters is agood sign.

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Wright: We are already filled up. Weare probably going to have to expand again in the middle of nextyear.

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LeClaire: What commercial real estate sectors ormarkets do you expect to heat up through the remainder of thisyear, and why?

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Wright: Clearly, it’s in themultifamily sector. Housing as a whole is what led us into thisrecession in every sense. That’s going to be the first sector torecover. In fact, I’ve already seen signs of recovery. It’s been a12-month evaporation of new construction. There’s nothing beingbuilt and you’ve seen absorption. Fundamentals have strengthened.Concessions have come down. Vacancy rates come down. We haven’tseen any growth in market rents, but certainly we have in neteffective rents.

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On top of that the capital markets, specifically for stabilizedmultifamily, are attractive. You can get agency financing at orbelow 4%. The catch is the value has to be there and the cash flowshave to be there, and those deals are few and far between, but ifyou have those things it’s got a leg up on alternative producttypes.

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LeClaire: What about other commercial real estatesectors? When will a recovery begin?

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Wright: Land is the hardest hit andwill be for the longest period of time. Retail and office tenantsare just in the first third of renegotiations of street rents. It’sa cycle that you see in each one of these product types…it’s goingto take some time to work through.

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No one was prepared for the housing market crash. They didn’tknow what was coming or how to prepare for it or how to deal withit because it was so systemic. A lot of the how-tos have beenironed out now, so while we are at the beginning of the workthrough of commercial property—specifically retail and office—itwon’t take as long to work through or manage these sectors as itdid housing because the staffing is now in place.

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LeClaire: Was the meltdown as bad as it was billedto be two years ago?

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Wright: I think it was certainly asbad as it was billed to be. Despite my general feelings about howthe financial crisis was dealt with, inaction was simplyunacceptable. The government stepping in and keeping some liquidityin the debt market and capital markets was essential to keepingthings afloat. Without it, we would have had total chaos, which wasevidenced by the Lehman Brothers fiasco.

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LeClaire: When will we see the bottom in office andretail?

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Wright: 2011 and 2012 is really what Iam calling the bottom, if you will, where you start to seerecovery. That’s a far cry from even being back to a normalizedmarket of 2004 or 2005. Certainly a far cry from the 2007 peak.It’s hard to believe, but we’ve been in this downward for threeyears.

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The good news is that people’s expectations have been realigned.No one expects to get back to 2007, at least not in short order.People are happier with less, so that softens the feel of whatperceived bad is. I do think the worst of it is behind us.Uncertainty is always the most difficult thing. The fact that wehave stopped the bleeding and there are no more large surprisescoming at us is good. I don’t believe in the double dip recessionin terms of jobs. In that respect, it is all up from here. It’sjust going to take a little time.

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LeClaire: What do you see as your biggestopportunity as a company in today’s environment?

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Wright: I think it’s just the marketin general is going to help us. Our strategy is to pick quality,talented people. I would stand behind everybody in our organizationas far as their ability to help manage clients.

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Every piece of property—unless it has traded in the last 12months—is in some form of distress. Our positioning in this tryingenvironment is what we’ve done right. When people started coming tous and needing leadership on how do deal with their lender, whattheir property is worth, what capital is available to them—whetherit be debt, equity or bridge financing, we had answers. When youare in the battle of your life, you want to be in a place where youhave the best information available so you can navigate it mosteffectively.

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We believe if we continue to build our client-first philosophy,and help them navigate through this environment and live to fightanother day, when the market heats back up people are going toremember who helped when times were bad.

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