The Tampa Bay area needs more small businesses and entrepreneurs if it wants to escape the economic doldrums, real estate heavyweight Lee Arnold says.
The chief executive officer of Clearwater-based Colliers International Tampa Bay knows something about starting and growing a business. In 1974, he founded Arnold Associates, a commercial real estate firm, and turned it into one of the region's biggest commercial brokerages.
Twenty-two years later, the company became part of Colliers International, one of the globe's largest real estate firms. Asked to identify one thing needed to trigger future growth, Arnold said: "A government that supports startup businesses and the entrepreneurial spirit."
While working his way to the top, Arnold, 60, said he has focused on improving life in the bay area. Arnold has served civic groups including the board of trustees for the University of South Florida. He once headed the Tampa Bay Partnership.
No other region, he said, is better than the Tampa Bay area.
"This is a great place to live, work and do business," Arnold said. "If you believe in Tampa Bay, you believe in commercial real estate."
Although the Great Recession clobbered Florida and its multibillion-dollar real estate market, Arnold said the Sunshine State is rebounding as investors are coming back, adding: "Florida is for sale. Now is the time to invest."
Arnold shared his outlook for the local economy.
Where is the biggest growth area for commercial real estate in Tampa Bay?
A number of sectors are showing good upside potential. The multifamily market has been red hot for months, while there's also strength in transaction volume in the health care and distribution industries. And in terms of distribution, I mean both the old-fashioned way, in distributing products, and in the new way to distribute information, technology.
What are the biggest challenges?
The stalled and difficult Florida foreclosure market is perhaps the biggest factor that's hurting the real estate recovery. Until distressed properties work their way through the system, the market won't return to anything resembling normal. Meanwhile, macroeconomic factors involving the world markets, like the challenges in the euro zone, are also delaying businesses from making decisions.
You've seen several boom-and-bust periods. What was the biggest lesson you learned in this cycle?
Never give up, maintain significant working capital reserves, don't carry any debt, communicate often both internally and to your clients, focus on helping clients solve difficult problems with customized solutions, and hire the best. And understand that the fear and angst that many people in the market have is not personal.
Many associates at your firm are having career years. How can that be in a down economy?
Associates that have focused on their specialty and are true subject-matter experts are in high demand and are solving client problems. The Colliers International organization gives us world-class tools and contacts while allowing us the flexibility to be nimble and make decisions quickly on a local level.
We are also doing a lot to foster cooperation and teamwork in our group, teaming folks internally to address complex real estate challenges, and incentivizing people to work together. Combined with our use of technology, like the iPad, we know innovation will set us apart in what is certainly the most remarkable market of my 37-year career.
How has the housing crisis reshaped strategies in commercial real estate?
Any commercial development based on significant new housing construction is not happening any time soon. Values of residential real estate are resetting to a new normal. As the consumer continues to deleverage, absorption of vacant residential units and retail spending will both increase.
That, combined with the continued trend of population moving toward urban centers, will decrease the excess space in retail, office and industrial properties over time.
What is the Tampa Bay area's biggest asset when competing to lure employers?
We have a very talented work force that enjoys a wonderful work environment, supported by affordable housing and great universities.
Predict the future. Where is Tampa Bay at in five years?
We will continue to be a region of superior opportunity. People will learn to adapt to a new world not driven by excesses in lending and spending. Development will pick up, but won't be the all-consuming driver of our growth. Excellent education will be the focus as we retrain our work force for the new world.
We will be more competitive with the world outside of Florida in key areas driven by our research, lower cost of living and lifestyle. We will see the "onshoring" of jobs. China and many emerging markets will become too expensive. Game on. I love Florida. This is a great place to live, work and do business.
Mark Puente can be reached at firstname.lastname@example.org or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.