Drone Commercial Real Estate Use In Florida

The FAA has granted a total of 45 exemptions to real estate drones, according to a report by the Association for Unmanned Vehicle Systems. So Florida is now the leading state with federal approvals for use of drones in real estate photography.

The Federal Aviation Administration (FAA) granted 45 exemptions to real estate drone pilot applications in Florida, more than in any other state.

The exemptions introduced last year, allow for qualified uses of photography of skylines and events, surveys of farmland and crop conditions and inspections by law enforcement authorities. Under a Section 333 exemption from the FAA, those real estate brokers and agents who choose to use drones for real estate photography can provide photos to sellers that only drones can photograph. In such a scenario, using outside vendors is expensive and unnecessary.

Florida drone pilots have the most exemptions, with California as second to granted to applicants. The FAA has granted a total of more than 1,200 petitions for exemption, a growing number with nearly 350 additional petitions being filed each week.

In order to obtain and retain an exemption from the FAA, real estate applicants must possess a drone pilot’s certificate. The operation of commercial real estate drones is to be conducted in daylight only and in within line of sight. The rule also addresses height restrictions,  optional use of a visual observer, operator certification, operational limits and aircraft registration and marking. Real estate drones must also have a weight limit of up to 55 pounds and only fly to an altitude of up to 400 feet. The FAA rules for commercial drones have still yet to be finalized.

As real estate drones become more accepted, the technology can deliver even more opportunity for commercial real estate. Orlando Aerial Videos in Central Florida uses drones for real estate to operate a camera-equipped drone over construction sites. Carlos Pando, Manager, told the Orlando Sentinel that their company obtained an FAA exemption about five months ago. Drones have the ability to allow investors to view real estate assets from a completely new perspective. Both an owner and an investor can benefit from its real-time property views while the technology is in flight.

Transwestern brokers are leveraging real estate drones to showcase walkability through aerial photos of their projects and nearby amenities. Drones are also being used to photograph traffic patterns of major intersections which may be located nearby a project. Such photos are being taken at various times during the day. The technology also allows for views of floors and video.

Commercial real estate companies see drones as a promising ROI platform for properties and have been investing in the new technology. FAA Transportation Secretary Anthony Foxx stated that technology is advancing at an unprecedented pace and this milestone allows federal regulations and the use of our national airspace to evolve to safely accommodate innovation.

South Florida’s Best Places For Real Estate Investing

A short list of top places for commercial real estate in South Florida.

Many real estate investors seem to have got a major envy-on for South Florida right now, whether that’s commercial real estate investments or from international buyers. Florida is the land of beaches, sunshine and real estate speculation. To me, South Florida has always been a rising star among the world’s best places for real estate investing. International investments in South Florida alone reached $913 million during the first quarter of 2015. The region has recently been included in CBRE’s top 10 metropolitan areas for commercial investments. Here is more information on South Florida’s best places for real estate investing.

Pine Hills, A Census-Designated Place

Pine Hills is located just west of Orlando. The Pine Hills area was once a subprime lending practices target during the housing boom which had led to 4,000 foreclosure filings between 2008 and 2010. It is one of Orange County’s largest and oldest neighborhoods. The Pine Hills area has witnessed a substantial 62.5% growth from 2009 to 2012 in its population. The board of county commissioners created the Pine Hills Neighborhood Improvement District in December 2011, to redevelop new business and entrepreneurial opportunities. Today, there are major commercial real estate developments such as Silver Star and North Pine Hills crossroads converting into a vibrant new town center.

Booming Market For Retail In Palm Beach County

The retail real estate market is booming with new construction in Palm Beach County. Russell Bornstein, senior vice president at CBRE in Boca Raton stated that the market is strong and getting stronger. In the second quarter of 2015, 149,413 SF of new inventory was delivered in the Palm Beach County Retail Market. Collier’s 2015 Retail Market Snapshot Report indicates that a healthy mix between new deliveries and leasing activity should be established by the end of the year. The report listed notable deals in the area including Clarion Partners purchase of the Palm Beach Outlets, located at 1801 Palm Beach Lakes Blvd, for $278,437,646 ($605 PSF). Weingarten Realty Investors purchased the Wellington Green Commons (2605-2665 State Road 7), located adjacent to the Mall at Wellington Green, for $53,549,167 ($466 PSF) and Best Buy entered into a new 10-year, 59,500-SF lease at 20540 US Highway 441 in Boca Raton.

Wawa Finds A Home In Parkland

Parkland is an affluent city in Broward County, boasting nine parks and recreation facilities. The city experienced a 9.4% growth in population with a 9.7% increase in employment compared the rest of Florida. This year, a commercial development group in Miami purchased a vacant property in the city out of foreclosure for $8.5 million. Banif Finance (USA) Corporation plans to develop a Wawa convenience store and senior housing. Wawa has been seeking out properties in the South Florida are to develop dozens of its gas stations which have freshly prepared food stores. The Parkland development is Wawa’s fourth confirmed location in Broward County.

South Florida Ranks 7th For Global Investments

You wouldn’t be surprised that South Florida ranks 7th for global real estate investments. South Florida made it into the list for the first time since the global financial crisis. The region’s housing prices, which peaked in December 2006, are beginning to recover after the Great Recession. This indication is a positive trend, sparking renewed interest in investing in the state’s real estate. According to CBRE’s report, the first half of 2015 generated close to $407 billion in worldwide commercial real estate investments, of which $7.7 billion was from South Florida.

The United States, United Kingdom and Germany are the largest commercial real estate investment markets globally. The report indicated that a combined total of $301 billion USD was transacted in these three countries in the first half of 2015. This leaves the region already in among top places worldwide. And yet Miami/South Florida was followed by Tokyo, Boston, Atlanta and Dallas. Orlando, Florida ranked 19th on CBRE’s list. New York was ranked first, followed by London, Los Angeles, San Francisco, Chicago and Washington.

I still believe South Florida and the United States commercial real estate market has always been lucrative for real estate investors because it is substantial and a good bet for long-term investments. Foreign investors seem to get it, most have been strategically investing in United States commercial real estate, to which I have witnessed in the past years that they are now becoming a major player in this space. When I read that, for example, gateway regions like South Florida, New York and Southern California global investments have increased to $41 billion in 2014, which accounts for almost 11 percent of all investment in United States real estate land assets, I feel that much like their American real estate investors, global-based investors will continue to be searching for commercial investment opportunities in the South Florida region that have strong risk-adjusted returns. These are my insights on South Florida and some of its best real estate investment spots for this year.

South Florida is indeed one of the best places to uncover these opportunities. enjoy!

 

The Value-Add Real Estate Investment

Why Orlando’s value-add opportunities continue to attract top real estate investors.

The thriving market in Orlando continues to draw in real estate investors as developers continue to break ground on retail property projects. According to commercial real estate investment firm Marcus & Millichap, accelerating job growth has lifted retail spending in Orlando metro, supporting occupancy in shopping centers to levels not seen in nearly a decade.

Value-add opportunities within the Orlando shopping center environment have been providing the right under performing real estate assets for gathering investor interest throughout 2015. Viking Partners, LLC., a real estate investment firm, recently had taken over ownership of a 25-year-old shopping center which features an Aldi and a Bealls Outlet in southwest Orlando.

Southchase

Southwest Orlando’s Southchase Village

The Cincinnati-based firm purchased the center for $21 million on September 28 from Southchase Investors LLC., an entity related to Equus Capital Partners Ltd., Orange County. The 229,410-square-foot shopping center is located at 12381 South Orange Blossom Trail.

Developers in Orlando are poised to deliver 900,000 square feet of retail space this year, compared with 480,000 square feet in 2014. The Orlando Airport, Kissimmee and South Outlier submarkets will receive nearly 600,000 square feet of the total in 2015. The Crosslands Shopping Center in Kissimmee is one of the largest regional retail projects to be completed in recent years.

Developers are in the final stages of the Crosslands in Kissimmee. The complex will consist of more than 400,000 square feet once completed. Some of the signed tenants include PetSmart and Marshalls. Another retail development in the area is the Lake Nona Town Center. The Lake Nona Town Center is part of a 7,000-acre community of Lake Nona. The center is currently under construction and is expected to include medical tenants, hospitality and office buildings.

What Is A Value-Add Real Estate Opportunity?

A value-add real estate opportunity is a type of strategy in which a real estate investor can solve problems. For example, many issues with a shopping center could be present in a value-add real estate opportunity that may demand attention to a new owner. Further renovations and placing new tenants into a shopping center center to revitalize and update it may also be required.

Value-add real estate acquisitions ultimately aim to improve their value and increase its cash flow. For those real estate investors who target these type of acquisitions, they expect to earn higher returns versus more stabilized, normal properties. Expert knowledge is required for this type of investment. The investor should be able to identify the areas of the property where value can be added. Some of these value-add components of a property deal may include repairs, renovations, subdivisions, vacancy lease ups and more. The analysis is critical.

The Orlando metro continues to remain a primary area of focus for real estate investors. Marcus & Millichap states that strong operations and relatively high first-year yields are increasing investor interest in Orlando metro, and a high portion of 1031-exchanges are occurring. There is a rich inventory in Orange County which is attractive for investors who are in search of value-add real estate opportunities and properties that offer a steady growth in cash flows.

If you are interested in executing a value-add real estate investment strategy, Retail Solutions Advisors specializes in commercial real estate leasing and management throughout Florida. With over 100 years of experience, our team is equipped with unparalleled knowledge of value-add opportunities in Orlando. If you’d like more information, feel free to call us at 863.646.4567.