Writer: Max Crampton-Thomas

2 min read October 2019 —There has never been a more perfect time to invest in Tampa Bay then the present. With seemingly all sectors of the economy in expansion mode, it is not a surprise that both foreign and domestic investment has been streaming into the Bay area at a rapid rate. Invest: Tampa Bay spoke with Brian Katz, the CEO and founder of Katz Capital whose business is headquartered in Tampa Bay  and focused on investing in the real estate and financial services sectors. Katz covered the advantages of being headquartered in the region, keeping his company’s growth sustainable and what makes Tampa Bay resilient in the face of real estate market changes.  

What makes Tampa Bay a conducive environment for your business? 

From a pricing standpoint, although nationally we are in a low interest rate environment, Tampa relative to Orlando, South Florida or places like Atlanta is still an affordable market. My personal feeling is that we are soon going to have negative interest rates. Six months ago, the collective mindset was that we would be in a rising rate environment, but that is simply not the case. A good analogy for what Tampa Bay is in terms of the scope of the market is that the region is a value stock. As a real estate and financial services private equity firm, this is a really great time for us to be in this market.

How does a business like Katz Capital sustain its growth in Tampa Bay’s business environment? 

Our various businesses employ different investment strategies for us to be able to remain sustainable. When I think of being an investor, I view the business world in terms of hunting and farming, so psychologically I am more of a farmer and all of these businesses are my crops that I can reap the benefits of on a regular basis. The problem with a hunter mentality is you can get the big kill, but it can be a long time before getting another kill, which is risky. To remain sustainable in this business environment, it’s better to diversify your business so that you’re not reliant on one source of income.

How susceptible is Tampa Bay to fluctuations in the real estate market? 

The fact that real estate pricing in Tampa is still relatively attractive versus other markets, I believe insulates Tampa Bay to a degree from real estate sector cycles and general market cycles. This is the opposite of South Florida, where there tends to be more dependency on these market cycles. When the South Florida market is hot, there is tons of money pouring in and prices push up. Although it’s increasingly on investors’ radar, Tampa Bay still has a lower modulation in these cycle waves. The big concern is that asset values keep rising. If we look at real estate development in the region, land values are up, labor costs are up and material prices are up. That means to achieve the same return for the amount of risk an investor is taking, you have to raise the exit price. This is going to be one constraint that Tampa Bay is going to face, and will have to figure out how to navigate that. 

 

To learn more about our interviewee, visit:

https://katzcapital.com/