Why Deal Flow is So Strong in Orlando

ORLANDO—There's plenty of deal flow in Orlando. So much so that RealShare Central Florida dedicated a panel to discuss it.

Gary Ralston, managing partner at Coldwell Banker Commercial Saunders Ralston Dantzler Realty, moderated the second panel—Deal-Flow Discussion: Transaction Outlook for 2015 and Beyond. The panelists were Kyle Burd, vice president and managing director of Parkway Properties, Russell Frahm, vice president of originations at Mesa West Capital, Tim Hart, partner at Property Tax Alliance Group, Doug Kinson, director of Calkain Companies, David Murphy, senior vice president of Industrial Properties at CBRE, and Marc Suarez, senior vice president of Hunt Mortgage Group.

“We're still bullish on multifamily,” Hunt said. “We also have equity through Hunt Investment Management and we are a strategic partner with Moss Construction and Pinnacle, which manages 100,000 units. We have made investments that allow us to play that nine inning game. We believe there are markets like Orlando that are going to survive.”

Kinson outlined three key reasons why investors are attracted to Central Florida: tourism, the climate, and the fact that it's only one of seven states in the nation with no income tax. But from a deal perspective, he says drug stores are the jewel in the net lease crown. Then there's Wawa.

“A few years ago Wawa decided to get into Florida and open 100 stores,” Kinson said. “Currently, they have about 77 stories around the state, but mostly in Central Florida. They have more pumps than anyone else. They sell sandwiches. Their concept has been so successful they've been rumored that some of their stores are averaging $5 million sales.”

Frahm, who works for a private lender based in Los Angeles, has been pushing to expand his business in Florida. He told the audience Florida is on its radar in a “huge way” and he's already closed a few deals in South Florida.

“We have $3.4 billion in assets under management and we're currently investing out of two funds right now,” Frahm said. “Last year we did $2.1 billion in mortgage originations. It's a crowded space. Everyone and their mother has launched a debt fund in the last couple of years months. In general, I'm optimistic. We have a lot of capital to put to work.”

Ralston pointed to the increasing volume of transactions in Central Florida, including high-profile deals like The Loop and Colonial Landing. But he also sees as shift in the retail world.

“Walmart has discovered small is the new big,” Ralston said. “They are planning thousands of neighborhood stores. We think it's a great opportunity. It's going to change things a little bit. The Internet and retail is not exactly the story most people think. About 25% of retail space today is occupied by non-retail tenants.”