The one word that could neatly sum up what Gulf Coast business owners and entrepreneurs would like to see in the economy in 2017 is a soothing one: balance.
Real estate, property management
President | Dean & Dewitt Property Management
Company: Dean predicts moderate growth for St. Petersburg-based Dean & Dewitt Property Management in 2017. “We've been in pretty fast growth mode over the past two years,” he says. “I still expect to grow, but the speed of growth is not going to be as fast.”
That's in part due to the fact that Dean isn't seeing as many real estate investors in the market these days, which causes everything to slow down some. But he expects demand for rentals to stay high. “As property values continue to rise, it makes it harder to buy property,” he says. “So even though some renters might make the decision to buy, just as many people will say 'I can't buy so I need to rent.'”
Industry: Dean doesn't anticipate another real estate bubble, because there's been more responsible lending and more cash purchases than in 2006.
“But you can't just continue to have rapid growth,” he says. “We started out with a very depressed market, so tons of investors entered the market. A lot have pulled out because they can't get the returns they were getting. More owner-occupied types of buyers will soften the market. Prices will be negotiated more, and maybe in two to three years we'll be seeing property values only increase commensurate with inflation.”
He also expects rental rates to go up around 4% in 2017. That's a bit of a slowdown from the 5% to 6% average increases he'd been seeing.
Region: For Dean, a healthy real estate sector in both the state and nation leads to a healthy local economy. “Florida really lives and dies by the real estate market,” he says. “When the real estate market stinks, people don't have money, they don't travel. It seems like everything is going well now, and I don't see anything that's going to affect it overnight.”
He's watching the potential for large, national property-management firms to enter the Florida market. That could lead to more competition for rental-management accounts but also more state and local regulations. “Property managers have always fallen under the umbrella of the Florida Real Estate Commission,” he says. “There's talk about having separate licensing for property management, which would be a good thing.”
— Beth Luberecki
Company: Parks says that Tampa-based Links Financial, which helps businesses find capital and restructure debt, had a strong 2016. “I feel that we're coming into 2017 with a lot of momentum,” she says. “Our expectation is that 2017 will be a continuation of a lot of the positive things we saw happen in 2016.”
That's because she thinks it's going to be even more challenging for businesses to raise capital in 2017 than it was in 2016. “Fortunately for us — but unfortunately for the business community — it will take assistance to get deals done,” she says.
Industry: Parks sees regulatory issues stemming from measures like the Dodd-Frank Act continuing to impact banks and the commercial mortgage backed securities market in 2017, which will affect the availability of financing for real estate and construction projects. She expects interest rates to rise and cause capitalization rates — the rate of return on a real estate investment property based on the income that the property is expected to generate — to increase and project values to decrease.
“Interest rates rising have a broader impact than a lot of people think about,” she says.
She thinks the Small Business Administration will keep playing a big role in borrowing. “A lot of small businesses have been able to get capital by obtaining SBA guarantees for their loans, and that dependence on government guarantees will continue,” she says.
Region: Parks says that continued consolidation among the small banks in the area will cause financing woes for many local businesses. “There will be pressure on smaller companies to obtain financing that have gone [in the past] to local community banks to get the capital needed to grow,” she says. “Fewer small community banks in our market is going to have an impact.”
Some of the large projects in the works locally — like the Tampa International Airport expansion and plans for Channelside — will cause “a fight for talent,” says Parks. “I don't think we've got enough people, and that's going to impact companies' ability to grow. All of us regionally need to continue to do everything we can to attract talent to this area.”
— Beth Luberecki
President and CEO |
Company: While the annual revenue growth rate has slowed a bit at Ideal Image in recent years, sales remain on the rise and should surpass $200 million in 2017, projects Ellinger. “This year has been great,” says Ellinger, “and I think next year will be, too.”
The private equity firm that owns Ideal Image, Greenwich, Conn.-based L Catterton, named Ellinger president and CEO in June, and a big part of her strategy includes opening new locations. The goal is to open new centers in markets where Ideal Image already has a presence, mostly to benefit from marketing and advertising that already exists in that area. Opening a new location, including equipment and labor, is a $1 million investment, so the strategy is a combination of opportunistic and caution. “We will open a bunch next year,” she says. “We will do a lot of market infill.”
Industry: While the health care industry is in flux, Ideal Image's niche elective services, such as laser hair removal and CoolSculpting, an FDA-cleared nonsurgical fat reduction procedure, are in much better position, Ellinger says. For one, the industry hasn't matured yet, and new technologies, like CoolSculpting, leave room for new and improved services. That widens the landscape of potential customers. “We are in an industry that's growing,” she says. “The tailwinds are strong behind us.”
Region: Ellinger moved to the Tampa area from Boston for this position, and she's been impressed by how well Tampa has done in the recovery, particularly in comparison to large Northeast cities. There's a strong optimism and sense of hope the economy in the area will only get better, says Ellinger. That stems from projects like Tampa Bay Lightning owner Jeff Vinik's multibillion-dollar redevelopment of Channelside and a large swath of downtown Tampa. “I think Tampa is doing really well,” Ellinger says. “It feels like a growth town.”
— Mark Gordon
General manager | Legoland Florida Resort
Company: The past year, says Jones, wasn't bad, but it also wasn't great in terms of traffic at the Polk County-based park, which celebrated its five-year anniversary in October. He projects 2017 will be a sizable improvement, due both to a new ride and a new movie. Lego Ninjago The Ride, says Jones, is a 4-D experience where guests will ride in cars while fighting evil forces by waving their hands over state-of-the-art sensors. “It's a unique offering to Central Florida,” says Jones. “It's a brilliant new ride.”
“The Lego Batman Movie,” scheduled for release in February, will be a boon for marketing, Jones says. That's what happened in 2014, when “The Lego Movie” opened.
“There is a groundswell of noise when a new Lego movie comes out,” he says, “and that always generates great results at the park.”
Industry: While the tourism sector has been on a solid five-year growth tract, the past year has been littered with challenges Jones hopes it will avoid in 2017. Two that standout to Jones: The tragedy with a young boy attacked by an alligator in June and the Zika virus. “It's been an unusual year for the industry with all things that have been thrown at us,” he says. Jones, like many others in the industry, believes Florida has all the pieces to have strong 2017, given the state's diverse array of beaches and attractions.
Region: Jones says the economy in the surrounding area in Winter Haven and the rest of Polk County has generated some solid momentum, and he expects that to continue in 2017. One theme is success breeds success, and in area not known traditionally for national brands, several restaurant chains have expanded to Polk County. Another sign of growth appears in increase in roadwork. Says Jones: “There doesn't seem to be any stop in demand for business around us in Polk County.”
— Mark Gordon
Managing partner | Burr & Forman | Tampa office
Company: Schifino, a commercial and corporate litigator, says the firm, now with a few hundred employees across Florida, intends to stay in growth mode in 2017. It intends to hire several attorneys in a variety of disciplines. It also plans to expand its presence in Jacksonville. One of the biggest areas of growth for the firm, he adds, is in intellectual property, to provide services for all the new businesses coming to the Tampa region. “We see a lot of growth ahead,” says Schifino.
Industry: Schifino has a double view of the legal profession. One comes from his perch at the helm of the firm, another as president of the Florida Bar for the 2016-2017 term. On the law firm level, the big trend is mergers and combinations. It's happening at the big law firm level in major cities and has begun to trickle down to smaller markets. Schifino projects more mergers will take place in 2017. From the perspective of the Florida Bar, one issue that will be front and center in 2017 is more diversity among judges and attorneys. Another hot topic is the ongoing push to provide more civil-based legal services for people who can't afford an attorney.
Region: The Tampa region is the place to be for 2017, says Schifino. That stems from the momentum city leaders have in wooing companies to the region. The most recent example is the corporate services headquarters medical giant Johnson & Johnson opened in Tampa earlier this year. “The hope is that more companies like that will follow,” says Schifino.
Schifino says while new jobs are an obvious economic boost, he would like to see more new companies, and current ones, do a better job pushing up wages. And like other Tampa area leaders, Schifino says the transportation issues have to be fixed for the city to maintain its lofty national status.
— Mark Gordon