Panelists Discussions Capital Market Participants

The trailing 18-month volatility in the lending environment has significantly reduced the volume of transactions across both Central Florida and the greater Southeast. The lack of data to draw conclusions from is making it ever more challenging to underwrite an opportunity. Referenced an article she read earlier in the week that referenced 2023 being on track to have fewer transactions (across all asset types) than 2009.

While there is a consensus of rents homogenizing across Central Florida, relative to product type and size, Florida does not price homogeneously and cap rates are still very dependent on the individual markets and their respective market drivers. That said, the limited data points result in a tricky valuation process and a challenge for active Buyers. Dogwood Industrials Chief Investment Officer, Emily Cannon, referenced their recent experience in selling a four-building Tampa Bay portfolio which yielded almost 50 bidders with a 230-bps spread between the highest and lowest offer.

Some of the geopolitical influences that are believed to potential impact the industrial sector include: continued development resulting in oversupply, on shoring of manufacturing, inflation at record levels, and the banks overexposure to the office asset class.