Investors High on Florida’s Business Climate

Florida is open for business, and this time it’s not just politicians making promises. According to a survey of U.S. corporate executives released recently at the International Economic Development Council (IEDC) Annual Conference, Texas, Florida, Georgia and North Carolina are viewed as having the best business climates in the United States. The Development Counselors International (DCI) has conducted the survey of corporate executives and site selection consultants every three years since 1996.
The Sunshine State ranked second with 18.1 percent of survey respondents praising the state’s pro-business climate. Georgia and North Carolina tied for third with 17.6 percent of the votes, followed by South Carolina and Tennessee.
Texas has consistently held the No. 1 spot since 1999, and it was the clear-cut favorite among the respondents to the survey: 49.7 percent said the Lone Star state has one of the most favorable business climates in the nation.
When asked why they selected Florida and the other top five states as best for business, the corporate executives frequently cited tax climate, “pro-business environment,” incentives/financial assistance and workforce quality/availability.
NBI Properties co-founder Craig Barrett said he has nothing against Texas, but obviously thinks Florida and the Emerald Coast should be ranked number one.
“Things might be bigger in Texas, but that doesn’t necessarily mean they are better!” Barrett joked. “I can’t remember the last time we had an investor trying to decide whether to acquire properties in Texas or Florida. If we did, I’m sure they picked Florida!”
All kidding aside, Barrett said that commercial real estate investors frequently mention they are pleased with Florida’s friendly business environment, tax breaks, and workforce, not to mention the beautiful weather.
“It’s hard to beat what we have to offer in northwest Florida, although we admit we are biased since we’ve lived here for four generations,” Barrett added.
The survey also found that 44 percent of corporate executives said that their firm would make a location decision in the next 24 months – whether it is a move, expansion or consolidation of a manufacturing plant, office, distribution center or other facilities. Forty percent said they would outsource a portion of the site selection process to a real estate broker or site selection consultant.

CRE Investor Sentiment Remains High for Emerald Coast Properties

Although the stock market has been topsy turvy and difficult to predict the last few months, investors are confident about the outlook for commercial real estate and are proving it by investing more capital. Results from a recent survey of investor sentiment by Marcus & Millichap revealed that a whopping 70 percent of respondents said they are planning to increase their commercial real estate investments during the next year. Only 24 percent said they would keep their holdings about the same while 4 percent said they expected their portfolio would decline over the next year.
Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, said interest from investors remains high due to fluctuations in the stock market and many desirable locations and listings on the Emerald Coast. He said the firm has been busy fielding inquiries and offers on a number of prime waterfront properties, raw land, and multi-use buildings.
“There are plenty of opportunities here for investors and we regularly work with them from all over the country and overseas,” Barrett said. “We have been much busier than we were last year at this time with commercial real estate listings, closings and property management.”
The Investor Sentiment Index measured views on fundamentals such as rising property values and plans to increase real estate holdings. Survey findings showed that commercial real estate properties will continue to command higher rents, occupancies, and property values. The conclusion is that sentiment remains high due to attractive yields commercial real estate is delivering compared to other investments. Nearly three-fourths of the respondents said they strongly agreed that commercial real estate offers favorable returns compared to other investment opportunities. Twenty-four percent disagreed with the statement while 2 percent had no comment.
Barrett said that another reason commercial real estate has been on the upswing in Destin, Fort Walton Beach, Crestview and other areas of the Emerald Coast is because investors have capital ready to invest. He said in previous years during the recession, this was definitely not the case.
“Investors are having an easier time getting the capital and the financing they need,” he said. “Because of the steady economic recovery, they are no longer waiting months to get alternative financing or approval on loans. This has resulted in more investors interested in everything from apartment buildings to luxury resorts.”
For more information on commercial real estate offerings on the Emerald Coast, contact NBI Properties at 850-243-0007.

Dustin Parkman Joins NBI as Luxury Marketing Specialist

NBI Properties announced that Dustin Parkman has recently joined its team of commercial and residential realtors as a luxury marketing specialist. With demand for luxury residences and vacation homes increasing on the Emerald Coast, Parkman will focus on expanding NBI’s growing portfolio of lifestyle properties

A resident of Santa Rosa Beach for more than a decade, Parkman studied finance at Troy University and was previously a managing partner of CPV Hospitality. In his new role with NBI he will utilize his expertise in marketing to high net worth individuals and investors interested in luxury properties. His responsibilities will include working with clientele on new developments, luxury residential, and lead opportunistic/investment commercial properties.

“We are excited to have Dustin join our team,” said Craig Barrett, co-founder of NBI Properties. “He will be focusing primarily on properties on the 30A corridor, including Destin, Santa Rosa Beach, and Panama City, and providing a high level of personalized customer service for our clients.”

Founded in 2005 by Jayme Nabors and Craig Barrett, NBI is the fastest growing commercial real estate firm in the Southeast and manages more than 2,500 properties on the Emerald Coast. For more information about the company and its services, visit www.nbiproperties.com.

World’s Luckiest Fishing Village Hosts Annual Rodeo

Whether you’re an angler or not, chances are you’ve heard about the Destin Fishing Rodeo. This popular event draws thousands of participants and spectators from the Emerald Coast and all over the country and lasts the entire month of October. Our friend and co-founder Jayme Nabors has been hooked on sport fishing for years and has had some great catches all over the world, but he’s the first to admit that you can’t beat Destin when it comes to fishing!

As longtime residents of this area, we enjoy watching these “lucky” and skilled anglers show off their catches when they return to the docks for weigh-ins every afternoon. It’s also fun to enjoy the Destin Seafood Festival, which kicks off the Rodeo with three, fun-filled days of music, activities, seafood and exhibits. One of our favorite spots is The World Famous AJ’s Seafood and Oyster Bar at 116 Harbor Blvd. Make sure to try the Wild Buffalo Oysters, Seafood Gumbo or Shrimp N’ Grits for a real treat – although everything there is delicious!

Whether you live nearby or own a vacation home in Destin, now is the time to enjoy the Emerald Coast. We think the weather is better than anywhere else in the country, as it’s still warm enough now to feel like summer, but it’s cooling down at night and gradually ushering in fall. If you’ve been thinking about investing in property here, give us a call and we will show you the best the area has to offer. We’ll even meet you at the Rodeo!

NBI Leads Emerald Coast’s Property Management Surge

NBI Properties reports that its property management division is booming, due in part to stable job growth and increased interest from investors in the area. The company’s co-founder, Craig Barrett, said he has hired several new employees to keep up with the demand.

“NBI is known throughout the Emerald Coast for our expertise in commercial real estate,” he said. “But we’ve also been building up our reputation for awhile as leaders in property management, and now we’ve reached the point where it is a significant portion of our business.”

With job growth reported to be steady on the Emerald Coast and much of it attributed to the leisure and hospitality sector, investors are taking advantage of the demand from renters for affordable housing as well as luxury properties in Destin, Fort Walton Beach, and 30A. Barrett said that occupancy rates are typically highest during the summer, but job growth is responsible for keeping properties occupied all year.

“Investors are happy because we’ve been able to get max rents for them during the summer season and also keep properties occupied all year due to the demand from working class families,” he said. “In addition to investors, we work with families who buy vacation condos or homes and hire us to manage the property while they live up north. Military families also buy homes here and rely on us when they are suddenly stationed in another state or country.”

Barrett said that NBI’s property management services offer peace of mind to owners who do not have the time or experience to carry out the extensive responsibilities of a landlord. He said there are endless stories from owners who signed up renters and thought the process would be as easy as collecting a check every month. In reality, numerous problems can arise and cause nightmares for owners.

“Savvy investors and owners don’t have time to collect rent and late fees, assess property damage, do background checks on renters, refund security deposits, or fix a broken air conditioner in the middle of the night,” he said. “But we handle all of these things and more at NBI, and our clients know we are going to make sure their property is protected as if it’s our own.”

For more information on NBI’s property management services, call the office at 850-243-0007.

Area Counties Qualify for HUD’s $1Billion Resilience Competition

The U.S. Department of Housing and Urban Development (HUD) Secretary Julián Castro and Dr. Judith Rodin, president of the Rockefeller Foundation, announced a $1 billion National Disaster Resilience Competition. The competition will make $1 billion available to communities struck by recent natural disasters to promote risk assessment and planning. It will also fund innovative projects to prepare communities for future storms and other extreme events.

“This competition will help spur innovation, creatively distribute limited federal resources, and help communities across the country cope with the reality of severe weather that is being made worse by climate change,” said Castro.

Funding for the competition comes from the Community Development Block Grant disaster recovery appropriation under the Disaster Relief Appropriations Act in 2013. It’s a response to requests from state, local and tribal leaders for help, according to HUD. Prior to the competition, representatives from eligible communities will have an opportunity to attend Rockefeller-supported Resilience Academies to strengthen their funding proposals submitted to the competition. Applicants must tie their proposals to their area’s eligible disaster. For example, a community that suffered a flood might want to offer flood buyouts in distressed areas and then create wetlands that limit future flooding, while simultaneously creating a nature preserve or recreation area.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, said that storms responsible to millions of dollars in property damage that swept through the area last March would definitely qualify for the resilience program.

“In our area, Okaloosa, Walton, Santa Rosa, and Escambia counties all suffered major damage,” he said. “Any funds awarded from the resilience program could greatly benefit communities here in the future.”

The $1 billion National Disaster Resilience Competition has 67 eligible applicants, including Florida. To qualify, a state must have a major disaster declared in 2011, 2012 or 2013. HUD says Florida had three major declared disasters in that time that impacted 45 counties.

The Rockefeller Foundation will provide technical assistance to eligible communities. More information on the National Disaster Resilience Competition can be found on HUD’s website.

 

 

 

E-Commerce Challenges Retail Sector

The rise of e-commerce has challenged retailers for several years, and coupled with the recession it’s spelled gloomy sales for bricks-and-mortar businesses. With online sales rising every year, consumers are making it clear they love the convenience of shopping online, leaving franchises and mom and pop stores scrambling to attract customers.

“There’s no doubt that e-commerce is impacting bricks-and-mortar businesses,” said Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, Florida. “New devices and apps make it easier for consumers to shop online all the time, and many choose to do so despite the fact that the risk of having their credit card information hacked is at an all-time high. There are also plenty of folks who believe it’s cheaper to order products online instead of driving to stores when the price of gasoline increases.”

With stores such as Blockbuster Video and Borders going out of business, retailers have had to adapt to e-commerce threats by working harder to win customers with savvy marketing, exclusive in-store offers, and loyalty programs. Many retailers are reconfiguring stores so they won’t need as much space for inventory. According to Barrett, banks in particular seem to be implementing new strategies to use space more efficiently.

“The days of big banks with numerous offices, spacious foyers, and waiting areas are over,” he said. “The trend now is for banks to build or lease smaller branches of 600-700 square feet with tellers greeting customers with iPads. Banks are betting on getting more exposure with two smaller banks than larger buildings at a single location.”
Aside from banks staying ahead of the curve, the industrial real estate sector is also  using space more efficiently in order to compete with e-commerce. Many are choosing to establish new distribution centers instead of changing the footprint of their retail space.

Barrett added that retail businesses have a rosier outlook on the Emerald Coast due to the throngs of tourists who visit the area year-around.

“When tourists are on vacation, they love to shop at all the area’s brick-and-mortar stores, outlet malls, and boutiques,” he said. “I believe this is why we still have a lot of investors interested in retail space as well as industrial space and raw land in our area.”

Banks Lower Military Mortgages

A new government agreement with five of the nation’s largest banks is helping active-duty military service members save hundreds of dollars or more each year on their mortgages. Banks also pledged to make enrollment easier, notify service members who qualify for lower rates, and simplify the entire process to help more military families own homes without overwhelming debt. Research from the Government Accountability Office (GAO) found that many military service members fail to take advantage of the benefits available under the Service Members Civil Relief Act because they’re unaware of them or they don’t want to complete the paperwork.

Craig Barrett, co-founder of NBI Properties in Fort Walton Beach, said that under the previous law in 2003, active-duty service members could have mortgage rates and other debt fees capped at 6 percent.

“With so many military families residing here on the Emerald Coast, we learned that many were simply not taking advantage of benefits that could lower their mortgage payments,” he said. “In most cases, families were unaware they qualified for these benefits.”

Five of the country’s largest mortgage lenders – Wells Fargo, Bank of America, Ocwen Loan Servicing, CitiMortgage and Quicken Loans – all agreed to make the application process easier and take a more proactive approach to notifying those who are eligible. The lenders have pledged to make frequent checks of the Defense Department database to see if their customers qualify for any unclaimed benefits.

“This is great news for military families in this area,” stated Barrett. “Reducing mortgage interest rates can result in saving thousands of dollars.”

 

CRE CLOs Offer Investors More Options

Investors searching for higher yields have been flocking to CRE collateralized loan obligations (CLOs) for the past two years. Driven by target yields in the mid-teens for equity investors, real estate insiders say momentum continues to grow due to favorable stock market performances over the last several years.

“The market is on a roll, despite all kinds of predictions that the bull market will collapse any day now,” said Craig Barrett, co-owner of NBI Properties in Fort Walton Beach. “The investors we are working with are taking advantage of reduced borrowing rates and more loan options from lenders.”

Barrett added that commercial real estate CDOs were the financial vehicle of choice prior to the recession, but disappeared during the recovery. He said the new CLOs have an improved, simplified structure that is preferred because they are secured loan transactions.

Moody’s reported that 2013 closed with an estimated $2 billion in CRE CLOs issued, with an even bigger volume anticipated for 2014. However, CRE brokers say one of the biggest hindrances for the growing CLO market is the need to educate investors and discourage familiarity with CDOs, which are largely blamed for contributing to the 2008 financial crisis.

Barrett said there are there are important differences between the CDO structure and CLOs pertaining to commercial real estate.

“Before the recession, CDOs offered B-piece buyers a way to get leverage off of their double B and lower unrated portfolios,” he said. “People should know the new CLOs only include loans, and interim financing suitable for three, five and seven-year loans. What we’ve noticed is that
CLOs are not dominating commercial mortgage interim financing, but they still play an important role in the market.”

Recently issued CLOs have typically targeted loans on properties in transition. For instance, a typical loan could be structured for a class-C apartment building with an upfront reserve or future funding for renovation. The property would likely have a high occupancy level and be located in a tight market, but could possibly be in need of an upgrade in order to maintain and improve cash flow.

“Overall, CLOs are a good option for borrowers,” said Barrett. “We’re happy to help investors with the rules and regulations involved in order to take advantage of CLOs.”

 

 

Florida Property Owners Benefit from Credit Score Leniency

While many people are aware that lower credit scores make it difficult to qualify for loans, homeowners in most states are discovering that bad credit increases the cost of homeowners insurance. However, a recent study by CNBC revealed that Florida is one of only four states that do not penalize borrowers with low credit scores by raising property insurance rates.

According to the study’s findings, only Florida, Maryland, California and Massachusetts quote low credit score homeowners the same rates as those with high credit ratings. Nationally, homeowners who have poor credit pay an average of 91 percent more for homeowners insurance than those who have pristine credit reports, according to a new report by insuranceQuotes.com. According to Craig Barrett, co-owner of NBI Properties, insurance rates are just another reason why more people are relocating to the Sunshine State and to the Emerald Coast.

“When we speak with prospective buyers, they will say it’s not their mortgage or their commercial lease that is killing them, but it’s the insurance,” said Barrett. “On top of that, so many people are dealing with less-than-perfect credit scores since the recession a few years ago, so paying 91 percent more for insurance doesn’t help these folks one bit. We love to be able to tell them that in 46 other states they would have to pay more based on their credit rating.”

The report also concluded that homeowners with credit scores in the fair or “median” range may pay 29 percent more for their insurance than someone with an unblemished credit record. Findings also revealed that how insurance companies weigh the significance of a person’s credit score can vary greatly from company to company and even state to state. Insurers started using credit-based insurance scoring in the early 1990s when FICO studies discovered a correlation between a person’s credit and his or her likelihood of filing a claim.

“There’s no denying that credit scores still have an enormous impact on an individual’s overall finances,” said Barrett. “Everyone knows that maintaining a good credit history is very important. But for those who are just starting out with no established credit or for those who went through some rough times and saw their scores drop, it’s good to know that Florida is one of the few states where they might be able to get a break.”