About Bartow
Bartow McDonald IV serves as managing director for Sperry Van Ness/ Skye Commercial Real Estate, specializing in the sale and leasing of land, retail, office, industrial and multifamily assets in North Central Florida.
Prior to joining Sperry Van Ness, McDonald served as the vice president of acquisitions and development for Cope Properties, Inc. in Ocala, Florida where he was responsible for acquisitions, entitlement, and marketing of portfolio and client properties.
Previously, McDonald served as the founder and chief executive officer of two start-up companies; Bluewire, a service based electrical solutions company and StoreParts, a web-based software company that supplied supply chain management technology to the supermarket and food retail industries.
Before starting two companies, McDonald spent six years working for a fast-growing international manufacturing firm, where he gained in depth industrial experience through his leadership positions in manufacturing operations, distribution, logistics and marketing.
McDonald serves on the board of directors for the Ocala/Marion Chamber of Commerce and the Central Florida Commercial Association of Realtors. He previously served as chairman of the regional advisory board of directors for RBC Bank and as a director on the advisory board for Wachovia Bank. McDonald is an active member of the Ocala/Marion County Economic Development Council where he serves on the Business Park Advisory Group, the Florida Association of Realtors, the UF Friends and Alumni of Real Estate Association and the Leadership Team at Christ Community Church. In addition, he has participated as a conference speaker for the Florida Venture Capital Forum and the Food Marketing Institute.
McDonald earned his MBA and Bachelor of Science from the University of Florida in Gainesville, Florida.
Ocala, FL, July 7, 2008 –Bartow McDonald, managing director of Sperry Van Ness/Skye Commercial Real Estate, Inc. has been appointed to the board of directors for Wachovia Bank’s Regional Advisory Board.
June 29, 2009 at 11:29 pm
August 12, 2008 at 11:42 a.m.
TRANSACTIONS
Sperry Van Ness has completed the sale of a medical office building at 1054 S.W. First Street in Ocala to Dilworth and Rives, Inc. of Louisville, Ky., for $1.6 million.
Bartow McDonald of Sperry Van Ness in Ocala represented the seller Barhoush Trust
of Ocala. Jim Carmichael of Sperry Van Ness in Florence, Ky., represented the buyer.
The 7,000-square-foot medical building property is 100 percent occupied and was purchased with cash in a 30-day close. Sperry Van Ness/Skye Commercial Real Estate, Inc. is donating a portion of the commission fees to Interfaith Emergency Services.
June 29, 2009 at 11:31 pm
Ocala Business Journal
December 28, 2007
Bartow McDonald, managing director of Sperry Van Ness in Ocala, has been appointed to the board of directors of the Central Florida Commercial Association of Realtors. McDonald was recently named Top Producer of Land Sales in Marion County by CFCAR.
June 29, 2009 at 11:32 pm
STAR-BANNER
Jan 25, 2008
City cautious in advancing development of airport site
Council leaning toward hiring a broker
OCALA — If City Council members had to chose a motto for their airport development efforts, it might be “once bitten, twice shy.”
At Tuesday’s meeting, after listening to a sales pitch speech made by a local brokerage firm representative, council members postponed a decision on how to proceed with development of the 800-acre airport complex.
Members can’t decide whether they should ask brokers, developers or both to bid on the property and will hold a workshop Feb. 26 to again discuss the issue.
Issuing a request for bids would set development of the airport complex in motion. But reluctance to deal directly with developers in the aftermath of Jorge Gutman’s halted downtown Walk & Shops project – combined with conflicting advice and a lack of expertise with regard to airport development – has made council members hesitant over how to proceed.
In all, council members have redirected the airport development advisory committee three times since it began drafting bid requests. At the beginning of January, fees for the services provided by aviation consulting company Reynolds, Smith & Hill totaled roughly $20,000, said Matt Grow, airport director for the city of Ocala.
The committee originally presented the council with a bid request aimed at attracting both brokers and developers to the project in October. But members decided it was too broad. So, in November, they directed the committee to create a request to seek bids solely from brokers. They switched again earlier this month, advising the committee to draft a request for bids from developers. Now, they are leaning toward working with a broker.
“We just want to make sure we get a good return on our asset,” said Councilman Kyle Kay.
At Tuesday’s meeting, Bartow McDonald, a managing director for Sperry Van Ness, a local commercial real estate firm, encouraged members to hire a real estate broker with worldwide marketing experience.
A broker should act as an advisor and create “a line of developers vying for the airport property,” he said.
“I feel extremely confident going the broker route,” said Councilman Daniel Owen.
But at a Jan. 8 meeting, after William Sandifer, aviation consultant for Reynolds, Smith & Hill, advised that working solely with a broker would be an “absolute mistake,” council members instructed the committee to draft a request for bids from developers.
At Tuesday’s meeting, however, the council reverted to previous reasoning that their broker of choice would provide airport development expertise and would create the highest market value for the property by producing the greatest amount of competition.
Terri Keogh, president of Castro Properties, was disappointed with the council’s flip-flop on Tuesday night. Castro Properties operates as both a broker and a developer, but submitted a proposal to the city in February to become the property’s master developer.
Keogh previously cautioned the council about working with a broker at the Jan. 8 meeting and reiterated those concerns on Tuesday.
“There are a lot of ways to market a property. In a commission-driven business broker’s way of looking at it may be very different than the city,” she said.
June 29, 2009 at 11:33 pm
Residential real estate: Market watchers point to a possible stabilization
June 13, 2008
By KEVIN CARTER
SPECIAL TO THE OCALA BUSINESS JOURNAL
Published: Friday, June 13, 2008 at 2:55 p.m.
OCALA – Forget the bubble and the bust.
It’s time to embrace a new word for Marion County residential real estate. The word is equilibrium.
The housing market has a steadiness that homebuyers expecting to live in Marion County for some years can take comfort in, according to University of Florida Professor Grant Thrall.
“This is a good time to buy,” he said.
Surveying a once chaotic market landscape, Thrall sees stability. The specialist in real estate market analysis teaches students to read growth patterns for homes and businesses.
“I don’t expect in the Ocala area a dramatic increase or decrease in prices,” said Thrall. “Housing prices have already adjusted to current market conditions.”
Key to figuring out if a market has stabilized is the pace of home sales. The rise and fall of inventory of unsold homes on the market tells the story.
“It looks like residential inventory peaked out Nov. 30 last year, and it has been declining ever since,” said Bartow McDonald, Ocala’s managing director for Sperry Van Ness/Skye Commercial Real Estate.
McDonald’s data shows the residential market in Marion County has a two and a half year supply of unsold inventory. But that’s with a six-month trailing average that will shrink as the market moves closer to normal.
June 29, 2009 at 11:35 pm
Impact fee break’s influence yet to be determined
By CHRISTOPHER CURRY
OCALA BUSINESS JOURNAL
Published: Monday, June 16, 2008 at 10:55 a.m.
OCALA — About three months back, Local builder Brian Ehlers’ company started pulling permits for an east Ocala retail complex called Old Town Village.
The plan is a five-building project, including a new Horse & Hounds restaurant, next to Lowe’s on East Silver Springs Boulevard. But after paying $96,000 in transportation impact fees on the first two buildings, which totaled about 11,000 square feet, Ehlers decided not to pull permits on the rest of the project until the county dropped transportation impact fees on commercial construction, a move consultant MuniFinancial recommended in 2007.
Ehlers said Old Town Village was not the only project his firm delayed because of road impact fees. There was a retail and office complex planned near the front of the Cobblestone subdivision in Belleview and an office park in Cala Hills.
With several projects sitting in limbo, Ehlers fired off a letter to the Marion County Commission in mid-January saying high road impact fees “are not only deterring local businesses from expanding but also keeping new projects from getting off the drawing board.”
It apparently resonated with commissioners, who brought the MuniFinancial study back for a vote on May 20, after voting it down last summer. The consultant’s study recommended major reductions- sometimes between 63 percent and 82 percent- for new retail, medical office and restaurant construction. But it also would have hiked road impact fees on single family homes from $6,107 to more than $10,000, at a time when the residential construction market remains slow.
The reasoning was residential development comes first and brings more traffic with it. Commercial then follows the rooftops.
So on May 20, commissioners attempted to appease both the commercial and the residential developers. For 90 days, they set road impact fees at 33 percent of the current rates.
Starting Sept. 1, the fees for residential and construction will go to 57.6 percent of those recommended in the consultant’s study. That means the break for commercial properties will be more significant than the consultant’s plan and, after dropping to less than $2,100 for 90 days, road impact fees on residential development will stay around $6,100.
During the May 20 meeting, Commissioner Jim Payton said the county had a rare opportunity to make its own economic stimulus package. Since then, there’s been no big rush on permits — residential or commercial. But there’s been some activity.
Ehlers said his company pulled the permit on the Horses & Hounds restaurant on June 4. By then the road impact fee on a restaurant had gone from $31,088 per 1,000 square feet to about $10,250 per 1,000 square feet.
“We’d been waiting on the outcome of the impact fee thing to move forward,” he said, standing in front of construction at the Old Town Village project. “It’s absolutely helped.”
Local commercial brokers said it would be months before you see the true results of the reduction but they believe it will help get more projects built.
“I think it will create some interest and some activity,” said Kenneth Kirkpatrick with Heritage Management Corp. “People that were sitting on their hands will get off of their hands, but it won’t just turn the faucet on.”
Bartow McDonald IV, managing director of Sperry Van Ness Commercial Real Estate in Ocala, said the fee structure scuttled deals involving industrial, medical office professional office construction.
“The impact fees were basically eating up the capital the lenders required for downpayments,” McDonald said. “We saw example after example of investment capital wanting to come to Marion.
McDonald said the old fees for medical office parks were particularly onerous. For a medical office park between 400,000 and 600,000 square feet, the old rate was $19,953 per 1,000 square feet. After Sept. 1, that rate will be less than $2,000 per 1,000 square feet.
The new impact fee schedule has one category for all retail, office, medical office and business park construction.
June 29, 2009 at 11:36 pm
Local brokers say there’s no need to panic
By Harriet Daniels
Star-Banner
Published: Tuesday, September 16, 2008 at 6:30 a.m.
OCALA — While the news from Wall Street in recent days is cause for concern for investors, local investment brokers and real estate brokers say it’s not cause for panic.
As Jim Hilty, a broker with Edward Jones, fielded calls from customers Monday, he said most were concerned but were not in panic mode to sell off stocks.
“For many, if they have the money and courage, this is the time to buy,” Hilty said.
He said things will be challenging for a little while, but it’s not time to panic.
“This is huge, monumental,” Hilty said. “In my opinion, this is the final sacrificial lamb so that we can now start the healing process.”
He pointed to the collapse of investment bank Bear Stearns and the bailouts of Fannie Mae and Freddie Mac, along with rising oil prices and the housing crunch, as making things more difficult.
Hilty said Monday’s close of the markets in Asia, because of a holiday, may have softened the blow globally.
“I think if they had been open before us it would have been a heavier hit,” he said. “Now they will open after us, and they will see how we reacted so it may be smoother.”
John Crossman, president of Crossman & Company, a local commercial real estate firm with offices in The Villages, said that while the news on Wall Street is not good, “it does create opportunities to make money.”
He said it’s a time to be both concerned and optimistic.
“Those who made good, disciplined decisions will be OK; it won’t rock your world,” Crossman said. “Those businesses and individuals who made aggressive decisions that were not really sound will feel some pain.”
As markets tighten, a credit squeeze may hurt deals like those to purchase shopping centers or other commercial real estate.
“It’s better to be a buyer right now,” Crossman said. “If you are a tenant right now and thinking of expanding your business, now is the time to do it. Landlords are willing to make deals.”
Crossman added that perhaps there has not been a better time in the past 10 years than now to expand a business or purchase a home.
For those who borrowed heavily to buy speculative properties, Bartow McDonald, managing director of Sperry Van Ness/Skye Commercial Real Estate, suspects they are not sleeping too well right now.
“All eyes are laser focused on property fundamentals in the real estate market,” he said. “We have sold real estate to investors from all over the world who find Marion County an attractive place to do business.”
McDonald added that real estate is cyclical and that while the current situation may be painful, it is a normal part of the real estate cycle.
“The data we are looking at shows us that we are bouncing at the bottom of this cycle,” he said. “We look closely at residential inventory in the market …it has to move to normal levels.”
McDonald said while it is good news that the residential inventory has stopped growing, there are still more sellers than buyers, “and the residential market drives a lot of our local economy.”
June 29, 2009 at 11:36 pm
Transportation: Is Ocala International Airport ready for takeoff?
BY MARIAN RIZZO
Special to Ocala Business Journal
Published: Monday, September 8, 2008 at 10:24 a.m.
BRUCE ACKERMAN/OCALA BUSINESS JOURNAL
Matthew Grow, director of Ocala International Airport, says non-aviation business development is the key to the airport’s future.
OCALA — If things go as planned at Ocala International Airport, a few hundred acres of scrub grass will soon turn into landscaped lawns, access roads and a complex of commercial and retail buildings.
A large portion of the 1,500 acres of airport land already has begun sprouting T-hangars and business facilities. With the addition two more T-hangars the airport will have a total of 101 hangar spaces for lease at $225 to $375 a month.
The resurfacing of the airport’s longer runway is aimed at making it able to handle the occasional use of heavier aircraft, such as 727s and 737s, and the building of a 95-foot control tower is expected to increase safety and efficiency for the growing mix of small and large airplanes.
“My goal is to make this a highly successful, self-sufficient general aviation airport,” said Matthew Grow, who became Ocala airport director three years ago.
“We’ve got everything in place to make this one heck of a successful airport,” Grow said. “It’s extremely rare for an airport like this to be self-sufficient. That’s what we’re trying to do.”
The airport’s budget is estimated at $800,000 for this year. Right now, only one non-aviation business, Sunair Electronics, is on the field. About 600 acres have the potential for more non-aviation businesses to settle in what could be a new industrial park. Sewer pipe is already being laid with funds the city of Ocala provided for infrastructure. The potential revenue could total $2 million, Grow said.
“We’re trying to find a master developer or broker to come in and bring some revenue to the airport,” said Grow. “If we get the right tenant to come in as an anchor, the others will follow. An industrial park with manufacturing and commercial businesses — that’ll bring jobs in.”
Bartow McDonald, managing director for Sperry Van Ness/Skye Commercial Real Estate, said he would like to see a combination of high-tech manufacturing and distribution-related services.
“I’d love to see a research park for some specialized technology in it, as well,” McDonald wrote in an e-mail.
“We have an amazing asset in our airport property that needs to be converted fromdirt to jobs,” McDonald wrote. “Our current county and city leadership needs to make this happen on their watch … » I really applaud the team that worked so hard to get the control tower funded. It increases the types of aviation and other businesses that might find our airport an attractive location.”
June 29, 2009 at 11:37 pm
Transportation: Is Ocala International Airport ready for takeoff?
BY MARIAN RIZZO
Special to Ocala Business Journal
September 8, 2008 at 10:24 a.m.
Matthew Grow, director of Ocala International Airport, says non-aviation business development is the key to the airport’s future.
OCALA — If things go as planned at Ocala International Airport, a few hundred acres of scrub grass will soon turn into landscaped lawns, access roads and a complex of commercial and retail buildings.
A large portion of the 1,500 acres of airport land already has begun sprouting T-hangars and business facilities. With the addition two more T-hangars the airport will have a total of 101 hangar spaces for lease at $225 to $375 a month.
The resurfacing of the airport’s longer runway is aimed at making it able to handle the occasional use of heavier aircraft, such as 727s and 737s, and the building of a 95-foot control tower is expected to increase safety and efficiency for the growing mix of small and large airplanes.
“My goal is to make this a highly successful, self-sufficient general aviation airport,” said Matthew Grow, who became Ocala airport director three years ago.
“We’ve got everything in place to make this one heck of a successful airport,” Grow said. “It’s extremely rare for an airport like this to be self-sufficient. That’s what we’re trying to do.”
The airport’s budget is estimated at $800,000 for this year. Right now, only one non-aviation business, Sunair Electronics, is on the field. About 600 acres have the potential for more non-aviation businesses to settle in what could be a new industrial park. Sewer pipe is already being laid with funds the city of Ocala provided for infrastructure. The potential revenue could total $2 million, Grow said.
“We’re trying to find a master developer or broker to come in and bring some revenue to the airport,” said Grow. “If we get the right tenant to come in as an anchor, the others will follow. An industrial park with manufacturing and commercial businesses — that’ll bring jobs in.”
Bartow McDonald, managing director for Sperry Van Ness/Skye Commercial Real Estate, said he would like to see a combination of high-tech manufacturing and distribution-related services.
“I’d love to see a research park for some specialized technology in it, as well,” McDonald wrote in an e-mail.
“We have an amazing asset in our airport property that needs to be converted fromdirt to jobs,” McDonald wrote. “Our current county and city leadership needs to make this happen on their watch … » I really applaud the team that worked so hard to get the control tower funded. It increases the types of aviation and other businesses that might find our airport an attractive location.”
June 29, 2009 at 11:38 pm
OFFICE BUILDING SELLS FOR $650,000
IN OCALA, FL
OCALA, FL, March 10, 2009 – Sperry Van Ness, one of the nation’s largest commercial real estate brokerage firms, has completed the sale of a medical office building to Jayanti Professional Corporation from Ocala, FL for $650,000. The 5,800-square-foot building is located in the Florida Professional Park at 2654 SW 32nd Place in Ocala, FL.
Bartow McDonald of Sperry Van Ness/Skye Commercial Real Estate, Inc. in Ocala, FLrepresented the buyer Jayanti Professional Corportaion from Ocala, FL. Pam Russell of (Coldwell Banker/All Village Realty. Inc. in Fruitland Park, FL represented the seller, The Expo Group, LLC from Miami, FL.
June 29, 2009 at 11:40 pm
Chamber work groups talk trade, tech, greening
By Richard Anguiano
Ocala Business Journal
Published: Sunday, May 31, 2009 at 11:31 p.m.
OCALA — Creating an international business council, recognizing local businesses that have gone “green,” and providing Ocala/Marion County Chamber of Commerce members with technological training were among recommendations the chamber’s board of directors unanimously approved recently.
Board members heard from the chairs and representatives of three work groups at its May 21 meeting.
Bartow McDonald lV, of Sperry Van Ness/Skye Commercial Real Estate, and Ron Ewers of Ewers Consulting are co-chairs of the World Trade Work Group. They cited data indicating international trade is the fastest growing business sector in Florida since 2007, with $47 billion in exports in 2008.
McDonald also told board members of a survey of 127 chamber members by e-mail indicating 35 percent buy from international vendors, 22 percent sell to international customers and 34 percent plan to. The group recommended the formation of an international business council as a joint initiative between the chamber at the Ocala/Marion Countymn Economic Development Corp, along with a two-phase strategy that includes: an awareness campaign; an annual international trade forum; “reverse trade missions” to consulates in Miami to introduce their nations to Ocala; internationl trade missions; and an annual survey.
June 29, 2009 at 11:41 pm
OCALA BUSINESS JOURNAL SPECIAL REPORT: REAL ESTATE
Signs of stabilization?
Market watchers: Residential inventory drop spurs hope
By Jeff Brooks
Ocala Business Journal
Published: Friday, June 26, 2009 at 4:55 p.m.
OCALA — Talk to anyone involved in residential real estate and chances are you’ll hear some s-words: slow, stagnant, short sales, stabilizing, showings, stirring and maybe a couple not fit for publication.
Expand the vocabulary a little and a guarded optimism begins to emerge from the rubble of the residential housing market. Though still reeling, there are faint signs the market may be turning.
“The number of showings is up,” said Carolyn Roberts, owner of Roberts Real Estate. “The enthusiasm and potential buyers have increased. Actually, pendings are up. Many of them are short sales and that’s where it becomes tedious because it takes a long time to get that approved.”
Compared to a year ago, Roberts said she wouldn’t call the market vibrant, but it has improved.
“What you’re seeing is sales are up, but prices have not stabilized yet. Overall in Marion County, the real estate market is stabilizing and moving in the right direction.”
According to the Ocala/Marion County Association of Realtors, the average sales price for residential homes fell from $173,883 to $121,280 from May 2008 to May 2009, a decrease of 30 percent. During the same period the average list price declined from $187,525 to $131,541.
Marla Martin, communications manager for the Florida Association of Realtors, said Florida home sales are up 18 percent compared to last April and home sales have been rising for eight consecutive months.
“It’s definitely a trend,” Martin said. “It looks like we’re finally seeing some movement.”
However, sales are down 8 percent compared to a year ago, bucking the statewide trend.
OMCAR president Bert Meadows said those numbers may be starting to turn.
“The investors are starting to come back,” Meadows said. “The siren may have gone off a little bit. They’re starting to hear a little siren that says, ‘Hey, it’s starting to turn.’ The last three, four months there’s definitely an increase in home sales. We’re getting positive information for the first time in the last few months.”
One bright spot is existing home inventory in Marion County. Statistics from Sperry Van Ness show the monthly housing inventory in the Ocala market in May dipped below 6,000 units for the first time since November 2006. Over the previous three years, inventory had peaked at just under 8,000 units in November and December of 2007.
“The inventory is absolutely decreasing,” said Judy Ray, a broker with Keller Williams Cornerstone Realty. “It’s continuing to go down. One, we’re selling them. Two, some of the listings are expiring. The good news is we’re selling them. The biggest thing that stops people from buying a home is their job. With the job market the way it is, our home market is driven by jobs.”
June 29, 2009 at 11:43 pm
OCALA BUSINESS JOURNAL SPECIAL REPORT: REAL ESTATE
Signs of stabilization?
Market watchers: Residential inventory drop spurs hope
By Jeff Brooks
Published: Friday, June 26, 2009 at 4:55 p.m.
OCALA — Talk to anyone involved in residential real estate and chances are you’ll hear some s-words: slow, stagnant, short sales, stabilizing, showings, stirring and maybe a couple not fit for publication.
Expand the vocabulary a little and a guarded optimism begins to emerge from the rubble of the residential housing market. Though still reeling, there are faint signs the market may be turning.
“The number of showings is up,” said Carolyn Roberts, owner of Roberts Real Estate. “The enthusiasm and potential buyers have increased. Actually, pendings are up. Many of them are short sales and that’s where it becomes tedious because it takes a long time to get that approved.”
Compared to a year ago, Roberts said she wouldn’t call the market vibrant, but it has improved.
“What you’re seeing is sales are up, but prices have not stabilized yet. Overall in Marion County, the real estate market is stabilizing and moving in the right direction.”
According to the Ocala/Marion County Association of Realtors, the average sales price for residential homes fell from $173,883 to $121,280 from May 2008 to May 2009, a decrease of 30 percent. During the same period the average list price declined from $187,525 to $131,541.
Marla Martin, communications manager for the Florida Association of Realtors, said Florida home sales are up 18 percent compared to last April and home sales have been rising for eight consecutive months.
“It’s definitely a trend,” Martin said. “It looks like we’re finally seeing some movement.”
However, sales are down 8 percent compared to a year ago, bucking the statewide trend.
OMCAR president Bert Meadows said those numbers may be starting to turn.
“The investors are starting to come back,” Meadows said. “The siren may have gone off a little bit. They’re starting to hear a little siren that says, ‘Hey, it’s starting to turn.’ The last three, four months there’s definitely an increase in home sales. We’re getting positive information for the first time in the last few months.”
One bright spot is existing home inventory in Marion County. Statistics from Sperry Van Ness show the monthly housing inventory in the Ocala market in May dipped below 6,000 units for the first time since November 2006. Over the previous three years, inventory had peaked at just under 8,000 units in November and December of 2007.
“The inventory is absolutely decreasing,” said Judy Ray, a broker with Keller Williams Cornerstone Realty. “It’s continuing to go down. One, we’re selling them. Two, some of the listings are expiring. The good news is we’re selling them. The biggest thing that stops people from buying a home is their job. With the job market the way it is, our home market is driven by jobs.”
June 29, 2009 at 11:44 pm
Column: Is international business in your future?
Published: Friday, June 26, 2009 at 7:32 p.m.
Create an International Business Council. Make it a joint venture with the Economic Development Corp.
In a nutshell, that’s what the international strategic committee recommended to the Board of the Ocala/Marion County Chamber of Commerce. The message was conveyed to the Board in late May by co-chairs Ron Ewers, of Ewers Consulting Inc. and Bartow McDonald IV, of Sperry Van Ness/Skye Commercial Real Estate.
Ocala and Marion County have much to gain from increasing international trade (import/export) and encouraging direct foreign investment, the committee’s report noted, citing a December 2008 Enterprise Florida press release that called export sales “a notable bright spot.”
Based on statistics from the U.S. Department of Commerce, Enterprise Florida reported that Florida is the fourth largest exporting state. In the first 10 months of 2008, Florida exported $46.8 billion in goods, and another estimated $30 billion in services. More than 44,000 Florida companies export, and at least 1.1 million Florida jobs depend on international business.
An e-mail survey by the Ocala Chamber found that 35 percent of the 127 respondents had purchased products, goods or services from entities outside the United States, and 40 percent intended to do so in the future. Moreover, 22 percent had sold to entities outside the USA and 34 percent planned to do so.
The purpose of the International Business Council would be to increase international trade and foreign direct investment in Marion County. Members would be companies that want to grow their revenues through collaborating with each other and international partners.
Phase 1 would be twofold. First, to form the Council, identify leadership and recruit members. Second, to understand the current situation in Marion County by identifying current international trade and foreign investment as well as existing resources such as Enterprise Florida and the U.S. Department of Commerce.
In Phase 2, the Council would host the first annual International Trade Forum; develop an international trade curriculum; identify trade missions and co-op marketing opportunities with state and federal agencies, and organize a “reverse trade mission” with consulates in Miami to bring foreign business people to Ocala and Marion County.
Benchmarks to measure the effectiveness of the Council could include: the delivery and distribution of the inaugural Annual Marion County Trade and Foreign Direct Investment Report; the number of Council members; the number of participants at its trade forum; the number of participants in the trade mission, and the increase in international trade (imports/exports) of products and services and direct foreign investment.
As the world shrinks, international trade will become a reality for many Ocala/Marion County businesses. It’s an opportunity both to grow revenues and expand one’s personal horizon.
June 29, 2009 at 11:44 pm
Real Estate: Space available
Defaults, delinquencies seen as commercial market threats
By Jeff Brooks
Ocala Business Journal
Published: Friday, June 26, 2009 at 4:44 p.m.
OCALA — As the old adage goes, commercial follows residential when it comes to real estate.
Today, commercial brokers and investors are bracing for many of the same problems that crippled the residential housing market, including a glut of available properties, tougher loan requirements and soaring vacancies coupled with falling rents.
Perhaps the biggest concern is the growing number of delinquencies and defaults. According to data from RBS Securities Inc., commercial loan delinquencies are at the highest levels ever, with a late-payment rate of 2.77 percent, up from 0.47 at the end of 2007.
“There’s a growing number of defaults, delinquencies,” said Gus Galloway, owner/president of Gus Galloway Realty. “It hasn’t hit the streets as bad, but we would expect that to happen. In Ocala, so many industrial properties were related to home construction, automobile construction. When those sales dry up, people go out of business.”
Harry Champ, president of the Central Florida Commercial Association of Realtors and national chair for Coldwell Banker’s commercial market group, said delinquencies and defaults are “about to impact commercial markets, creating real issues.”
A March 26 Wall Street Journal report indicated maturity defaults are playing a big role in commercial real estate loan problems. For example, a typical commercial mortgage has a five-year term. Five years after the commercial mortgage originates, the loan must be repaid and a new loan found. If someone purchased a property five years ago with 20 percent down for an 80 percent loan-to-value ratio and there were no missed payments, the building’s value has been stable and the loan balance has been paid down 4 percent, a new loan would have a 76 percent loan-to-value ratio.
In today’s market, however, nobody will make a commercial loan with those numbers because credit standards tightened faster than the loan was paid. The property owner must then pay some additional cash to bring the loan-to-value ratio down to what the lender finds acceptable, possible 70 percent or lower. No cash to do that leads to a maturity default.
Pat Moses, executive vice president for First Avenue National Bank, said maturity defaults shed light on a current situation that may not be as good as in the past.
“It’s a stop sign that says, ‘Hey let’s take another look because they’re not what they once were.’ They can restructure and deal with the issues,” Moses said. “Properties where the borrower doesn’t have outside income, relying on tenants to pay their freight, that’s where they’re running into problems. It seems to be escalating in rental properties where properties are empty. If there’s a loan attached to those properties, there’s a problem that exists. It’s not rampant, but it’s visible in the market. It’s an issue that’s worse than it was a few months ago.”
Ken Ausley is co-owner of Ausley Construction and chair of the board of directors for First Avenue National Bank, giving him a unique perspective on both sides of the market. From the bank perspective, Ausley says, he’s not yet aware of a strong trend toward delinquencies or defaults, yet many businesses are “living on the edge.”
“Whether those folks make it or not, who knows?” he said. “A lot of small businesses depend on what the market does. Businesses are still failing at a pretty good clip. I don’t foresee a quick recovery. It’s going to be a slow, gradual climb with a lot of grind to get out of it. A lot of money flowing two years ago had no business being lent.”
Karen Hatch, business banker vice president at Wachovia, said customer relationships are key when it comes to mature loan requests.
“We’ve got a process at Wachovia where we have a lot of auto-renewals,” Hatch said. “We may require financials, going back and underwriting the entire loan request based on the ability to pay. Things may have changed. Relationships are the key. We’ll work with that client to help any way we can.”
Bartow McDonald, managing director of Sperry Van Ness in Ocala, said there will be more defaults and delinquencies in the coming months.
“That’s just part of the stabilization process,” McDonald said. “Admittedly, it’s a painful part, but we will see more of those in the next few months.”
While those involved in commercial real estate are preparing for rough waters, many have already grabbed a life preserver for today’s market.
“My perspective is it’s pretty slow,” Ausley said. “From the new construction side of things, it’s very, very slow. Outside of the public sector, there’s not a lot of private-sector money flowing right now. From the banking side, it slowed up more significantly from the end of the first quarter than any other time.”
Galloway said the market is going through a transition period.
“There’s a lot happening that doesn’t appear to be happening,” Galloway said. “What I mean by that is there’s a lot of dynamics taking place that don’t translate into sales. The industry is re-pricing itself because of the glut of available properties and lack of demand.”
Galloway said some deals are happening and the sky hasn’t fallen, but compared to a year ago, things are probably worse.
“We’ve leased some properties, we’ve sold some properties,” Galloway said. “It’s about 50 percent of what it would have sold for a year-and-a-half ago.”
Though not as substantial as the residential market, Galloway said overbuilding is the primary reason for current conditions.
“We have more vacancies in every product type than we’ve ever had,” Galloway said. “Three, four years ago pretty much all these big projects got funded. Look west of I-75 at the Dillard’s shopping center complex. Just drive through there. It’s a nightmare. Probably 70 percent vacant.”
Sandon Wiechens, president/broker of Wiechens Realty, is seeing similar conditions.
“It seems like it’s getting pretty tough,” Wiechens said. “Rent rates have gone down, vacancies have gone up, sales prices have gone down. It’s spreading from the residential market. It’s definitely worse than last year.”
McDonald said some market sectors are doing well.
“With activity we’ve seen in the first quarter of the year, we’re seeing the velocity of deals picking up, specifically in the office sector,” he said. “We’re doing a lot of deals in the medical field.”
McDonald said business at his office is up about 35 percent from last year primarily because of the strength of the medical office market.
While there are deals to be had, obtaining financing can present another challenge to closing a sale.
“Financing is still readily available, particularly on properties that are owner occupied or have a positive cash flow if they are investment-property types,” Moses said. “Community banks are still active and anxious to lend money to properties and borrowers who have the capacity to repay. It’s all about income and cash flow. It’s the more speculative type loans and properties that are the drag on the market.”
Hatch said there’s business out there but Wachovia is just taking a closer look at the bottom line.
“Regulators like to see owner-occupied, income-producing properties,” Hatch said. “What we’re experiencing in the market in qualifying our clients is their ability to generate cash flow. With the economy the way it is, it’s decreased sales revenues. On the commercial side, they have to show the ability to repay, that’s what we look at. The 1980s taught us we’re not in the business to make loans based on the repayment of the real estate selling.”
Hatch added nobody is lending on land-only sites.
Moses admits loan standards have tightened, but that’s for the best.
“Rules and standards ignored or put on the shelf in years past, they’re back and we’re adhering to them,” Moses said. “Playing by the right set of rules is a good thing. Compared to last year it’s about the same except for speculation loans, which are gone from the marketplace. There’s probably not as many construction starts, but there’s plenty of viable borrowers. There’s good loans out there. I don’t think it’s a funding issue in the market.”
McDonald said there’s no question banks have a limited appetite for speculative real estate deals, but they still have a hunger for owner-occupants.
“People are laser focused on the fundaments of the deal, banks jump all over projects where the fundaments make sense,” McDonald said.
Everyone agrees commercial real estate has hit bottom, but as Galloway says that’s no reason to feel good.
“I think it’s going to take two, three years before much of a difference is felt,” Galloway said. “It’s going to be a slow process.”
Ausley agrees.
“We may have reached the bottom of the market, but I don’t think there’s going to be any upward trends for a while,” Ausley said. “2009 is just going to look like it does right now toward the end of the year.”
Moses said there are still many positive aspects of the local market.
“The quality properties will thrive, survive and prosper,” Moses said. “The same with owners and borrowers. It’s all about the cream rising to the top.
“All of us have lost sight of the positives about Ocala and Marion County. Those positives are going to resurface and one day we’ll all wake up and say things are truly better. I don’t think that time is too far off, but we’ve still got to work through some issues.”
June 29, 2009 at 11:45 pm