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Canadian investor eyes Greater Orlando with up to $20M for 1031 fulfillment

UPDATED: JANUARY 16, 2016 9:16 AM — A Canadian real estate investor and manager has honed in on Greater Orlando for reinvestment of up to $20 million to fulfill a 1031 exchange opportunity, after selling his lone Orlando restaurant parcel in early December and going under contract for sale of a Miami property.

Jay Basian, principal of Marland Management Services Inc. in Toronto, told GrowthSpotter that after testing a handful of Florida markets with acquisitions of single-tenant properties in recent years, the Orlando region has become his focus going forward.

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"I like (Greater Orlando) because it's a growing community filled with young families, and the quality of life is really good. Those to me are fundamentals for good investment," he said. "Pricing in Miami where we had also owned has gotten out of hand, and in Key Biscayne, where we still own a property, the market has gotten extremely hot."

Marland Management Services
Marland Management Services

Basian had bought a 1.64-acre Logan's Road House restaurant parcel in September 2013 for $2.6 million, which is located on the southeast corner of W. Sand Lake Road and S. John Young Parkway, a main out-parcel in the South Park Shopping Center that's anchored by a Super Walmart. He sold that property for $3.8 million on Dec. 11.

"We bought that two years ago when the Canadian dollar was nearly even with the U.S. dollar, but today it's at about (US$0.69) to the Canadian," he said. "So this sale was really about the stars aligning for us to nearly double our money in two years."

That Orlando restaurant parcel was bought at a Cap rate of roughly 9 percent in 2013, and had increased in value to 7 percent as of mid-2015, offering clear incentive to sell.

Marland Management Services is largely a developer of industrial properties in Ontario, Canada, with a focus on renovating and re-purposing abandoned manufacturing sites.

Basian and his wife were drawn to the Florida market for investment three years ago to have a good excuse to travel south during the cold winter. Single-tenant assets they bought in Miami (a retail outparcel) and Orlando (the Logan's Road House) were easy ways to dip their toe in the market without needing to hire a local property manager.

After closing the Orlando sale in early December (aided by Marcus & Millichap), Basian still has most of his 180-day window to commit the proceeds to fulfill a 1031 exchange. His Miami property is currently under contract for sale, he said.

Basian is eying Orlando and Kissimmee in Florida for that reinvestment. With U.S. dollar savings available, he's prepared to invest anywhere from $3 million to $20 million in his next property here, with preference for restaurants, retail strip centers or similar single-tenant assets.

"In Canada we've consistently redeveloped properties, so our skill set is to come in and make sense of something that isn't working," he said. "I have the freedom to work with (contractors) now on a new property, and spend long winter months there."

Have a tip about Central Florida development? Contact me at bmoser@growthspotter.com, (407) 420-5685 or @bobmoser333. Follow GrowthSpotter on Facebook, Twitter and LinkedIn.

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