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Five Questions with Edward Easton
The Miami-based company also recently linked its property management division with a Texas concern specializing in apartment rentals.
BY ROCHELLE BRODER-SINGER
ROCHELLEBRODER@MAC.COM
Real estate firm The Easton Group has been developing, buying and managing property -- mostly industrial -- in South Florida since 1974. In February, after six months of talks, the Miami-based firm sold a 50 percent stake in its property management division to San Antonio-based Lynd Co. to form Easton Lynd Management.
Both companies are family owned, but while Easton specializes in industrial property in Florida, Lynd has focused on buying, refurbishing and managing apartment rentals and operates in 41 markets across 13 states.
"Combined, we can look for industrial opportunities in all our states, and we can look at multifamily opportunities in Florida and the East Coast," said Lynd Chief Operating Officer David Lynd, who was born in West Palm Beach.
Easton Group Chairman Edward W. Easton, for his part, sees an opportunity to expand outside Florida and to beef up a division that had mainly managed assets the company owned. Even as the two companies work to combine their operations, he hopes to increase the 7 million square feet of property currently under management. "We'd like to be at 12 million a year from now," he said. Here are some additional comments from Easton:
Q: Where are the biggest opportunities for Easton Lynd during the next couple of years?
A: I think we'll do a lot of outside services for banks and for FDIC -- which we would not have found under the Easton banner. [Bank-owned properties] is clearly a market that we are going after. And we're hopeful that Easton Lynd will give us a look at a lot more properties to acquire.
Q: Easton Group has been known as a development company. Are you still doing development?
A: We haven't actually developed anything for the last three years. We did anticipate that the market was going to be in disarray, and also there were very few development opportunities. . . . Of the product that we own, we've built about a third of it, and we've bought about two-thirds of it. I would think in the next three years, our growth will be by acquisition, not by development. I basically spend all of my time doing [scouting and acquisitions], and my son spends almost all of his time on acquisitions, and it's been pretty boring during the last 24 months. We looked at over 2,730 deals last year. We made three.
Q: Will there be acquisition opportunities this year? What about financing?
A: I do anticipate opportunities probably in the third and fourth quarter. [For financing] we're using a formula of about 50 percent debt and 50 percent equity. . . . We're looking for solid properties that produce a cash flow and have long-term appreciation potential. We really think in generations more than exit strategies; it's a long-term hold for us.
Q: What's your take on the general state of the industrial real estate market?<br>
A: The industrial market is actually stronger than most, mainly because [international] trade has held up better than most industries, and that's what the industrial market lives by. I think 2009 occupancy will drift down a little bit, but there's no real supply coming on to destroy the market. And it's much stronger than the retail or the office market.
Q: How long will the financial markets remain this tight?
A: The debt side of the real estate market is going to be very tight for the next three or four years . . . I think the equity will be available, but I think the transactions are going to require a lot more equity, and I think it will be good for the market. I think what got this market in trouble was the 90, 95 percent loan-to-value ratio. When property values dropped 20 percent, they were underwater. Had those transactions had 50 percent equity, we wouldn't have the problems we have today.
About The Easton Group:
The Easton Group is a family-owned, boutique commercial real estate firm with over 30 years of experience and an exceptional track record. The group is broken down into four business units consisting of commercial real estate investment, development, brokerage, and property management. The company currently has more than 5 million square feet under management. The Easton Group is headquartered at International Corporate Park in Doral. For leasing and sales information on International Corporate Park Center contact Mike Rice at 305-594-5900.
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