Remember: Deals require sellers

There's no question that opportunities abound for commercial real estate investment along the Gulf Coast lately.

What remains to be answered is how much a buyer is willing to pay, what condition the property is in at the time of closing and how much lower prices could go.

A seminar earlier this month by Clearwater-based Sunbelt Real Estate Acquisitions LLC offered various viewpoints to interested investors from a range of experts. Commercial properties are available at prices as low as they have ever been, but there's a chance they could get cheaper still.

“Bankruptcy and real estate are one and the same right now,” Christopher Boss, co-owner and managing member of St. Petersburg-based law firm Yesner & Boss, told the small but interested audience at the Best Western Bay Harbor Hotel in Tampa.

But while regional banks are looking to unload excess foreclosures from their books, they aren't willing to let them go for pennies on the dollar, he said.

They may not have a choice in some cases. Jeramie Concklin, CEO of Guardian Solutions in Clearwater, said a 20% decline in commercial real estate value is expected this year on top of the 43% lost since 2007.

Del GoForth, executive vice president of Florida Bank and Mortgage in St. Petersburg, added that some banks can't afford to sit on properties much longer, and if one bank fails or is bought, the next owner may be more willing to sell. “The best thing that can happen to you if you're negotiating with the bank,” he said, “is for the bank to go under.”

GoForth also said commercial mortgage-backed securities, a key component in the property value run-up of the last decade, are making a comeback but only on deals above $10 million. Those deals aren't as likely around Tampa Bay, he said.

Buying a property at a dirt price doesn't necessarily make it a good deal, noted George Hurst, a broker with Coldwell Banker Commercial NRT in Clearwater. Besides taxes and other liabilities, there's the consideration of whether it can support itself, he said: “What are you willing to pay for a dead-income property?”