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CoStar News: How would you describe the state of the commercial real estate market in South Florida?

 Alex Zylberglait: » I think, at this point, the market is still moving up. The deal volume is a little slower than last year and the year before, but nevertheless, it’s still at a healthy level. The only area that has some relative weakness is secondary assets in secondary markets. Investors there are looking for bigger discounts. They’re saying, ‘With potential choppy waters ahead, I believe I have to buy it right.’

So you anticipate a slowdown heading into 2018?

»Some investors are feeling a little jittery because of the run-up in the stock market. We’ve been on an eight-year run and people expect that to slow down at some point. But some think it’s going to be a soft landing.

What countries are investors coming from and what types of properties are they buying at this point in the cycle?

»They’re coming from Latin America, primarily. We’re also seeing capital come from the Middle East – Turkey and Israel.

It’s all asset types. But if we were ranking them, single-tenant net-lease is the easiest to get into. After that, you have retail, industrial, office and some hotels that are in the better locations.

Also, I’m noticing that a lot of foreign buyers are starting to take advantage of strong market conditions and selling some of their assets. They bought well as the market was recovering and now they want to cash in some of their chips and access their equity.

I have a client – a group from Argentina – that bought a shopping center in Doral, with a Starbucks as an outparcel. They’re selling just the outparcel, and it’s the kind of property that should get a lot of attention from buyers. I have another client – a group from Colombia – that purchased a class A office building from the bank out of foreclosure. They put some money into it and renovated it and sold it for just under $8 million. They were able to make a nice profit, let’s just say.

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