Investing in Florida: Want to buy land in the OC and other bits of Florida? Alanna Gallagher reports on the Irish businessmen with a new investment offer
As the profit in Florida's liquid sunshine, orange juice, continues to dwindle, investors are turning to property. The Orlando Lakes Residential Development Fund is targeting anyone interested in assisting in the purchase of land in central Florida residential market. The fund, backed by an Irish company, is a four-year investment scheme.
The team includes Garrett Kenny, president of Feltrim Developments NA Inc, which has already successfully developed Toscana, Lake Annie Reserve and Valencia at the Champion's Gate golf resort, all of which have proved popular with the Irish market. To date the company has been involved in €160 million worth of investments.
Conor Carrigan, director of SWS Corporate Services Ltd, a member of SWS Group, and Michael Scully of Castle Carbery Properties Ltd, together launched the Polska Fund last year, creating investment opportunities for Irish farmers in the single family home market in Warsaw.
Its success led Garrett Kenny to contact the Cork-based pair with a view to creating a similar investment package for property in central Florida.
"Feltrim's president, Dubliner Gary Kenny, is well-regarded by local authorities in the state and sits on a number of committees," says Carrigan.
This, coupled with the fact that he's already done numerous land deals and has a following of Irish investors, was reason enough for the three men to enter into a partnership agreement - creating opportunities for developer, financier and investor.
"The idea is to design a product that offers high returns but with low risk to the investor," says Carrigan.
"Investor funds will be used to purchase sites that meet strict selection criteria. Using the expertise of Feltrim Developments this land will be entitled with planning for the construction of residential communities to a horizontal build stage and then sold to large-scale publicly quoted home builders.
"With wealth management being one of the growth areas in Ireland, we felt that the potential for growth was much more visible in the Florida jurisdiction than elsewhere," says Carrigan
The fund will acquire land in the area surrounding the strategic corridor of Route 27, in the Four Corners area of the State, which takes in Orange, Osceola, Lake and Polk counties with the greatest emphasis on Polk County.
Kenny has already acquired a 575-acre site at Lake Hatchinanna, in Polk,and currently has another 200 acres identified for the fund.
Entry level to the programme is €100,000 for a term of four years. The return on investment for the minimum entry level amount will be approximately €181,000 before tax, assuming a four-year commitment to the fund, says the company.
The developer also promises to take all of the currency risk. While the scheme is in a US dollar environment investment, receiving return, both capital and interest, is in euro. In addition, the developer is introducing a land bank worth €12.5 million to the enterprise.
The Orlando Lakes, Residential Development Fund is worth €25 million, which means that immediate cover of 150 per cent is provided to the investor, says the company.
Orlando's environs have a population of 1.9 million with 60,000 people per year expected to be added to the population of the city limits.
According to the Real Estate Research Consultants, the city's population is expected to reach 2.2 million by 2010. Also, 25,000 new jobs are anticipated in the next five years. A 70 per cent capital appreciation in the past years coupled with 49 million visitors to the state last year and a land supply currently standing at only one year as opposed to a traditional two-year supply should further strengthen the case for investment.
The State's growing population base (at the rate of 1,000 people a day), inexpensive mortgages with low-interest rates, a healthy employment rate, and unemployment at about 3 per cent all offer would-be investors further reasons to be cheerful.
Central Florida is lake country, with around 362 lakes, some natural, others the fruits of several hurricane season run-offs. They set the scene for many waterfront opportunities for property development. Blend this with the track record of SWS and garnish with due diligence, outlined in detail in the investor memorandum, and you have a juicy financial cocktail that may appeal to a broader subscription base than just asset-rich, cash-poor farmers.
So, if you fancy the idea of rubbing fiscal shoulders with Tiger Woods, Justin Timberlake and Wesley Snipes then central Florida might be the place for your money.
"Prices Are Jumping, Invest Now!" is an early 20th century claim made on an old real estate poster displayed in the Orange County Regional History Center in downtown Orlando. And now, as then, many investors are hoping the claim is still ture.
The Orlando Lakes Residential Development Fund Road Show launches on Monday, May 8th from 8pm-10pm in the South Court Hotel, Limerick and then travel to venues nationwide.
