The document summarizes indicators pointing to continued recovery in real estate markets, with moderate growth expected over the near term. Transaction volumes and lending are growing, and investment is expanding beyond major cities to secondary markets with strong job and population growth. Overall, 2015 is forecast to be one of the strongest years for commercial real estate since the financial crisis, driven by improving fundamentals across property sectors and low interest rates.

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1. MARKET INDICATORS POINT TO CONTINUED RECOVERY.
2. OPPORTUNITIES ARE BEING CREATED FOR ALL OF US.
3. FORECAST FOR MODERATE GROWTH OVER NEAR TERM.
TODAY’S THEMES

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MARKET BAROMETERS

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ALL THE KEY DRIVERS FOR PROPERTY DEMAND ARE TRENDING IN
THE RIGHT DIRECTION:
• PROPERTY INVESTMENT CONTINUES ITS SLOW CLIMB.
• HOUSING MARKETS RECOVERING NICELY.
• JOBS ARE BACK PAST PRIOR PEAK LEVELS.
• INTEREST RATES STILL EXTREMELY LOW.
• MORE NEW CONSTRUCTION/DEVELOPMENT.
• NEW ACTIVITY IN A NUMBER OF SECONDARY MARKETS.
THOUGHTS ON REAL ESTATE IN 2015

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Small cap property sales:
+22% in 2014: 7-year
high
Large property sales:
+45% in 1Q2015 (YonY)
PROPERTY TRANSACTIONS GROWTH

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• MAJOR BUYING CLASSES
• Real estate investment trusts (REITs)
• Foreign investors**
• Private equity funds
• Hedge funds
• Traditional developer/owner/operators
DEAL MAKING: WHO’S INVESTING?
2014 TOP BUYERS
ARCP
Blackstone
JP Morgan
Norges Bank Investment Mgt
Hines
OMERS
Starwood Capital Group
MetLife
Essex Property Trust
David Werner Real Estate

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EXPANDING UNIVERSE OF U.S. BUYERS
• NUMBER OF ACTIVE BUYERS IS 24% HIGHER THAN PRE-CRISIS.
• 3-FOLD INCREASE SINCE 2009
• 2014: 18,574 UNIQUE BUYERS IN COMMERCIAL REAL ESTATE

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• SMALLER SECONDARY MARKETS WITH STRONG GROWTH
PROFILES ARE SEEING INVESTOR INTEREST:
• Portland, Seattle, Denver, Austin, Nashville, Atlanta, Las Vegas, etc.
• COMMON DENOMINATORS:
• Strong job growth
• Growing technology sectors, healthcare and financial services
industries
BEYOND NYC AND SAN FRAN:
NEW MARKETS ARE GETTING HOT

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• FINANCING MARKET IS INCREASINGLY COMPETITIVE.
• BANKS HAVE $ TO LEND, STILL VERY CAUTIOUS.
• REGIONAL/MID-SIZED BANKS ARE GAINING MARKET SHARE.
• UPTICKS IN LENDING VOLUMES SUPPORT POSITIVE
INVESTMENT TRENDS…
LENDING TRENDS IN 2015

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• A POSITIVE TRAJECTORY IN LENDING
• 2014:
• 6.5% ANNUAL GROWTH (FDIC)
• STILL 25% BELOW 2007 PEAK
• WIDE VARIABILITY IN GROWTH BY BANK SIZE…
LENDING: SLOW PACE OF GROWTH IN
ORIGINATIONS

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• AVERAGE GROWTH IN LOAN PORTFOLIOS: 6.5%
• STRONGEST GROWTH AT THE LARGEST REGIONAL BANKS AND
MID-SIZED BANKS
• SOME PULLBACK BY COMMUNITY BANKS.
• GROWTH ESPECIALLY STRONG IN
CONSTRUCTION/DEVELOPMENT AND MULTIFAMILY
CATEGORIES.
GROWTH BY BANK SIZE
Growth in CRE
Loan Portfolios
(2014 vs. 2013)
All banks 6.5%
Assets >$50B 4.1%
$10B-$50B 16.8%
$1B-$10B 10.5%
<$1B -1%

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• HEADING INTO NEW ROUND OF REFINANCING, PEAKING IN 2017
• LENDERS VIEW THIS WAVE OF MATURITIES AS OPPORTUNITY TO
INCREASE VOLUMES.
• EXCESS CAPITAL LOOKING TO FINANCE SOLID REAL ESTATE
DEALS.
• EXPECTED TO FUEL A SURGE IN REFINANCING ACTIVITY FROM
NOW THROUGH 2017.
NEW ROUND OF REFI’S

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• TOTAL CONSTRUCTION SPENDING
ENDED 2014 AT ITS HIGHEST LEVEL
SINCE DOWNTURN.
• CONSTRUCTION AND DEVELOPMENT
LENDING WAS THE FASTEST
GROWING CATEGORY OF CRE
LOANS ACROSS BANKS OF ALL
ASSET SIZES.
• BEYOND PRIMARY METROS
• POINTS TO MARKED INCREASE IN
U.S. DEVELOPMENT IN 2015
2015: THE YEAR FOR NEW DEVELOPMENT
MOST ACTIVE GROUPS
ACQUIRING SITES FOR
DEVELOPMENT
HFZ Capital Group
Greenland Group
Tishman Speyer
Carmel Partners
Oceanwide Real Estate Group
Crown Resorts
Oaktree
Mitsui Fudosan
Fortis Property Group

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SCOREKEEPER BENCHMARKS:
TAMPA

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Region 1Q Growth YonY
Northeast 2%
West 14%
MidAtlantic -4%
South 1%
Midwest 1%
California 6%
North Atlantic 8%
South Atlantic -1%
U.S. Average 4%
SCOREKEEPER: REGIONAL GROWTH 1Q2015

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SCOREKEEPER: SOUTH ATLANTIC, 1Q2015

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SCOREKEEPER: TOP 10 METROS-1Q2015
TOP 10 HIGH-GROWTH
METROS, 1Q2015
Las Vegas, NV 52%
Columbia, SC 42%
San Antonio, TX 38%
Charleston, SC 26%
Milwaukee, WI 22%
San Francisco, CA 19%
Sacramento, CA 19%
Stamford, CT 16%
Portland, OR 14%
Raleigh, NC 13%

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FLORIDA: PHASE I ESA TREND LINE
Up 4%
vs. 4Q

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SCOREKEEPER’S METRO FOCUS
FLORIDA IN THE CONTEXT OF U.S. TOP 50 METROS:

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OUTLOOK: SOUTH ATLANTIC REGION
Source: ULI/PwC, Emerging Trends in Real Estate 2015.

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TAMPA’S CURRENT INVESTMENT CLIMATE

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THE 2015 FORECAST

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• THERE'S STILL A LOT OF ROAD TO RUN IN THIS RECOVERY.
• TRANSACTION VOLUME REMAINS ON THE MEND.
• MODERATE GROWTH IN NEW ORIGINATIONS.
• CONTINUED MIGRATION TO SECONDARY AND TERTIARY METROS.
• FAVORABLE LOW INTEREST RATE ENVIRONMENT (HIGH
PROBABILITY OF INCREASE IN EARLY 2016).
• PHASE I ESA FORECAST: 4-8% RANGE NEXT 2 YEARS
“2015 WILL BE ONE OF THE STRONGEST YEARS WE’VE SEEN IN
COMMERCIAL REAL ESTATE SINCE THE CREDIT CRISIS AND IT’S FOR
ALL THE RIGHT REASONS.” KEN RIGGS, RERC
“OPTIMISM IS HIGHEST IT’S BEEN SINCE THE DOWNTURN.” RYAN
SEVERINO, REIS
2015 FORECAST

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