Florida Commercial Real Estate: Where Is the Recovery for South Florida Commercial Land Development?

by Rosa Eckstein Schechter

Recovery in the real estate industry in recent years has been craved like water in the desert by many developers, brokers, investors, agents, and the like: particularly here in South Florida, we've been hit hard in this economic downturn.

So reading and learning and hearing rumors of new deals being made and reading reports of the housing industry on the upswing is very, very good news to everyone involved in any aspect of the Florida real estate industry.

However, most of what we are reading about involves residential properties.  Homes, condos, townhouses, time-shares, apartments: these are the kinds of deals that are being made more and more according to most of the sources out there.

So, what about the Florida commercial real estate market?  What's happening in the development of commercial properties here in South Florida?

Expert opinions are out there regarding Florida commercial development.  For example, the president and CEO of Atlanta's Jones Lang LaSalle Retail, Tim Maloney, was recently quoted as finding that retailers are not coming to real estate developers to discuss their upcoming needs and get things moving toward new retail real estate projects.  From his perspective, this means that commercial real estate is still in the valley and Maloney is predicting that across the country, we won't see a recovery in retail commercial land development for another couple of years -- Maloney thinks that new deals aren't going to start getting planned, created, and built until the current plethora of existing vacant storefronts and closed retail properties are resolved.

Should we listen to Tim Maloney?  Maybe, yes.  After all, he's the head honcho of an international real estate financing company that bills itself as managing "the third largest retail portfolio in the United States."

From their latest report, there is the following analysis:

Multifamily, in particular, has shown increasingly solid growth, with sales of an estimated $20.7 billion*** during the first half of 2011 more than double that during the same period in 2010,. Investors have been eager to participate in this drastic shift of capital and the sector continues to have one of the strongest performances on record.

“We’ve seen a massive uptick in purchases from REITs and other institutional investors in the multifamily sector,” said Jubeen Vaghefi, Managing Director and leader of the firm’s Multifamily Investment Sales practice. “Much of this stems from the fact that financing for apartments is available through not only traditional portfolio and CMBS lenders, but also through Fannie Mae and Freddie Mac.”

To read the Jones Lang Lasalles Mid Year 2012 Report, go here.  You may find other online reports provided by JLL of interest as well, such as their Mid Year Report for Panama

Meanwhile, things are happening here in Florida that bode well for a prosperous commercial development future.  Along with projects like All Aboard Florida, there are regional plans like those over in Orlando, where the airport is being expanded, and the Lee County (Naples area) plans surrounding the Southwest Florida International Airport, where various business incentives and infrastructure projects are already underway.

And then there is St. Joe -- a company that may provide the biggest clue to what is happening in Florida commercial land development.  From its website: "The St. Joe Company is one of Florida's largest real estate development companies and Northwest Florida's largest private landowner with approximately 571,000 acres of land, concentrated primarily between Tallahassee and Destin." 

St. Joe reported a net loss in the first quarter of 2012, which is big news since this company is considered a power player in Florida real estate.  Its second quarter results weren't great, either.  However, St. Joe is moving forward - from their press release accompanying the release of the Second Quarter results, Park Brady, St. Joe's Chief Executive Officer, explained:

"Our second quarter results reflect our efforts to stabilize the company. I'm encouraged by the trends in our residential, timber and resorts businesses. With $170 million in cash we're in a position to either hold or opportunistically reposition our assets to create additional shareholder value. We plan to continue to invest in those projects that we believe meet our risk-adjusted return criteria such as our holdings in Venture Crossings at the Airport, the Port of St. Joe, Breakfast Point, our primary home community in Northwest Florida, and Rivertown, our primary home community in Northeast Florida. We're continuing to study our other real estate assets and markets for growth opportunities."

Result?  Yesterday, Zacks slapped St. Joe down from a rating of "outperform" to "neutral" because, according to latest report from the stock analyst firm, "... St. Joe is currently in a defensive mode and continues to reduce capital expenditures through stringent cost-cutting measures and reduction in operating expenses. St. Joe is one of the largest real estate developers in Florida. The company is presently focusing on developing the adjacent area of the Panama-City Bay County Airport, which was opened in late 2010, to increase the future value of its holdings. However, St. Joe’s business is primarily concentrated in Florida, which was one of the hardest hit states in the recession and had adversely affected its bottom line in the recent past, thereby undermining the future growth potential to some extent. “  (Read the Zacks take on things here.)

So, St. Joe is getting dissed in part simply because of location, location, location:  apparently, Florida is a somewhat scary word to some analysts these days.  Still. 

In sum, there is a spark here in South Florida Commercial Land Development.  There's still something there, smoldering deep in the ashes of the Great Rescession and for this we are all both excited and grateful.  However, the commercial projects aren't burning as bright as the residential ones right now and 2012 will not be the year of Florida's big recovery in commercial land development.  2013?  Next year may be a different story.


Written by:

Rosa Eckstein Schechter

Eckstein Schechter Law on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at info@jdsupra.com. In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at: info@jdsupra.com.

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.