Tyler Saldutti, CEO, Prime Realty
Prime Realty’s CEO Tyler Saldutti sat down with Invest: to describe the advantages honed by his firm to increase growth within Jacksonville’s commercial real estate market. Cultivating their business model as a boutique, full-service provider offers their clients a personalized, innovative approach that distinguishes Prime Realty from their competitors.
Could you describe a few of Prime Realty’s highlights over the last 12 months?
Over the last year Prime Realty has had several successful leasebacks where business owners have been able to access capital that was frozen in their real estate, and they have done a lease agreement to sell their properties as investment properties. We’ve accomplished this in the medical office space and industrial cold storage space. We have also seen success in retail and office leasing with ground-up construction as well as existing property. The last year in the industrial sector has been reflective of the last five years, with everything continuing to sell quickly.
Could you provide an overview of Jacksonville’s commercial real estate market?
We handle office, industrial, retail and multi-family, and the first three industries are all trending successfully, with a caveat for the office sector being large blocks of downtown or suburban offices. Outside of a few key large spaces, absorption is good. Rental rates are currently stable. On the retail side we see rental rates increase due to supply being limited, but we expect them to level off. In the industrial side, we see supply starting to catch up to demand, but we still see an extremely healthy supply and demand balance.
For multi-family housing, some of the new apartment properties are starting to become more competitive with their leasing. We aren’t seeing lease rates go down, but we are observing increased incentives, such as free rent for new tenants. This is not taking place as often in the B and C-class apartments, but the class A and newer units are all coming on the market at the same time, which is pushing property managers to compete for new tenants. This is not unique to Jacksonville, but values have been hurt by increased interest rates, so for expiring loans, we are seeing some sticker shock when refinancing apartments.
Which of your services have recently performed as the main drivers of growth?
The volume of investment sales has gone down. Leasing and managing properties accounts for a higher percentage of our work because of that. I do expect investment sales and owner-occupied sales to trend upward over the next 12 months, and I expect our sales volume to increase.
Is Prime Realty looking to expand into any new markets or service areas?
Our business is boutique, and our approach is bespoke. Our growth is often tied to the needs and ambitions of our clients. The vast majority of that is in Northeast Florida, but we do have regional and national relationships that will take us into other markets. This growth is often more client or need-driven than it is an ambition of ours to open an office in St. Augustine, Savannah or Orlando. We are licensed in Florida and Georgia, so the vast majority of our work is performed in those two states.
How does Prime Realty differentiate itself from other competitors in the commercial real estate market?
In our market we fill a need that is boutique, project-oriented and full-service. There is not another option in Northeast Florida for customers to receive the level of service we provide, which includes our full suite of technology resources, vendor resources, developer relationships, property management, leasing and investment sales all under one roof. To receive all of these services, you typically have to deal with a more national platform.
How does Prime Realty benefit from international and domestic interest presently taking place in Jacksonville and Northeast Florida?
A rising tide lifts all ships. We are benefitting from more companies and people hearing about Jacksonville and moving here. Lease rates and all property types are increasing, along with the sheer volume of transactions as the population grows. The sliver of the pie we enjoy just by the size of the pie growing means we enjoy a larger sliver. As more people come to Jacksonville, more people are interested in our boutique, full-service firm rather than the national platform.
How does Prime Real Estate leverage technology to provide the best property management, brokerage, and consulting services to your clients?
We live by our commitment to being nimble and adjusting fire when needed. The benefit to being a small boutique firm is that we can make changes and adapt more quickly than other organizations. This has greatly benefited our agents as they service our clients, along with directly helping our clients as well. When there is a new marketing platform or tool, we are able to swiftly onboard these implementations.
What are the primary challenges for the commercial real estate industry at the moment, and how is Prime Realty working to address those challenges?
In the state of Florida, it is hard to talk about commercial real estate without talking about property insurance challenges. In the real estate industry, you can’t talk about interest rates without also discussing the cost of capital and the confidence people have in the capital market. We are not always coming up with solutions to solve the property insurance premium dilemma in Florida, but being more proactive in anticipating those challenges is a healthy approach. If solutions are coming down the pipeline, they are typically more political in nature and less about building and maintaining our properties and facilities differently than they are now. We are having conversations about how to build a hurricane-proof office, retail facility, apartment or warehouse.
What are Prime Realty’s main priorities moving forward in the next two to three years?
We will continue to expand by growing our market share in Jacksonville, which means having more agents and performing more transactions. Geographically we grow by the success and expansion of our clients. Prime Realty continues to become a more well-rounded full-service real estate provider via property management, as well as through consulting and capital market resources. Over the next five years we will see additional investment and development growth. Having ownership in our projects and being more active in the developer and investor role will be integral for our continued success.
