MIAMI—What challenges remain for commercial real estate ownersand developers? What about creative financing? What should weexpect in 2015?


Those are among the questions we asked TimO'Connor, senior executive vice president and regionalmanager for NorthMarq Capital, will be sharing hisinsights at RealShare CentralFlorida in less than two weeks, in part two of this exclusiveinterview. You can still read part one: Is Multifamily Really Orlando's Darling?

| What challenges remain for commercialreal estate owners and developers looking for capital for assets inthat region?


O'Connor: There is some concern over the amountof absorption the region can handle. This is especially true forapartments downtown as we have seen so many newprojects go up with rents at the higher end of the market. At somepoint, new projects may be temporarily delayed to see how well themarket absorbs the new supply.


We are seeing a mixed bag with regard to office assets. Whilethe professional labor force data seems to be improving, there aredefinitely challenges as it relates to the continual structuralchanges taking place in that sector. Finally, with all asset types,investors are more closely examining their exit strategies in lightof possible rate increases and cap rate movements that are likelyin years ahead.

| Are you seeing much in terms of creativefinancing in the region?


O'Connor: Mirroring what is happeningthroughout the nation, more and more bridge lenders have enteredthe market driving down the cost of capital in that sector.Construction loans have become easier to come by at higher leveragepoints, and lenders are more willing to consider construction-mezzfinancing.

| What do you expect in 2015 from acapital markets perspective?


O'Connor: Next year will be a major test on howmarkets will react to the Federal Reserve's likely raising ofshort-term rates. Next year we will also see a large wave ofmaturing CMBS debt that was originated in the last market peak.

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