Real Estate Reality Check

By:style='mso-tab-count:2'> S. Alison Chabonais

Ross McIntosh calls it as he sees it. And he reserves the

right to change his mind at any time. McIntosh's take on Southwest Florida's

real estate market is so candid that movers and shakers in commercial and

residential real estate annually pay to see what he has to say at his Naples

forum informally captioned "Ross at the Ritz."

McIntosh's snapshot of land

development ticks and trends in Collier County -- expanded in 1994 to include

Bonita Springs and Estero -- was the sole source of a market-wide picture of

Collier when he launched his analysis in 1989. With today's exploding

development and instant data access, information still requires context, and

McIntosh delivers it in straightforward spades.

This broker's newsworthiness

springs from a combination of experience and chutzpah. He's not afraid to tell

us what he thinks is going on. Even if it's not what we want to hear.

Integrated analysis has become the cornerstone of his development land

brokerage business. It helped him ride the wave of development north of the

Imperial River. Simply stated, his niche is, "If is has keys, I don't sell

it."

Five years into his real estate

brokerage career, McIntosh began collecting market stats to assimilate

"what I needed to know, the vocabulary of my business." Each

succeeding effort to improve his annual presentation has yielded insights and

introductions, referrals and a reason to call on prospects. Over the years,

this communal contribution has significantly boosted personal name recognition.

He vastly appreciates the value of the adage, "Don't spend time getting to

know your customer until your customer knows you."

normal'>Interpreting Trends

"Each year, business people come to my program better

informed, so I must reach deep to make an impression," says McIntosh. He

calls on a wealth of sources, resources and market savvy to interpret data

correctly, dismiss anomalies and provide a context for information that we

don't get anywhere else. Here's his latest attempt to hold a churning market

still for a brief space long enough to describe it.

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Where the stock market goes, so goes the Southwest

Florida housing industry. If we see a national flight from speculative

investment into safer cash, we can expect a similar move here. If we perceive

an overvaluing of stocks and cooling of exuberance in financial markets, we can

expect to see similar effect here. Few people continue to be burdened by the

misconception that Naples is somehow insulated from the world's economic

vagaries. Global interconnection constitutes reality.

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The number of those who discern a loss of velocity in

the Southwest Florida development market now exceeds the group that doesn't

anticipate a slowdown. Declining optimism is resulting in greater prudence.

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Generally, in Southwest Florida's residential market we

are experiencing a balance of supply and demand. Past exponential growth in

supply, matched by demand, is tapering. Little information exists on units

built, but not yet sold. Some recent projects failed because demand fell short,

and they couldn't meet their debt. These will be repositioned and emerge in a

different form.

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Generally, the current level of commercial development

is okay. We may see spots of vacant retail and office space. More likely, we'll

see developed land inventory. Two grocery stores in a hot spot in the market

just closed and half a shopping center lies unbuilt. Why? Because the

competitive urge to participate in a boom regardless of market saturation kicks

out projects that are ill conceived from the outset. Developers are chasing

tenants for proposed projects on land that is already bought and paid for.

Owners holding vacant land will carry less of a negative cash flow than those

sitting on improved property who don't have sufficient tenants to achieve

critical mass. Some projects will get built. Others won't. Development cycles

extend as the economy slows and competitors vie for smaller pieces of the pie.

Southwest Florida is reaching for balance.

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Any economic slowdown will give us a chance to catch

our breath and catch up on infrastructure. In 1989, recession, foreign war and

higher impact fees cut the area's residential absorption rate in half. Two-year

housing projects turned into three and four-year projects. We kept on building

roads and relieved traffic congestion enough to carry us into the late 1990s.

Are we experiencing deja vu?

How we manage development in the

near-term will determine Southwest Florida's future. McIntosh expects the

nature of development to change as larger tracts become unavailable. He thinks

we might see expanded demolition and redevelopment. Overall, this long-time

market observer foresees real estate prices continuing to rise, delivering good

return on wise local investment.

S. Alison Chabonais is

a freelance business writer and public relations consultant.