Ram Realty CEO isn’t buying into Opportunity Zones

Casey Cummings spoke to The Real Deal's publisher Amir Korangy during a fireside chat at ULI's West Palm Beach Development and Investment Forum

May.May 10, 2019 05:45 PM
L-R: Casey Cmmings and Amir Korangy

L-R: Casey Cummings and Amir Korangy

Opportunity Zones are top of mind in the real estate industry today, with funds raising north of a billion dollars.

But Ram Realty Services’ CEO Casey Cummings isn’t buying in. “I don’t see the potential that other buyers are seeing,” said Cummings, whose Palm Beach Gardens company invests in distressed properties across the Southeast.

“Anyone who has [Opportunity Zone properties] for development thinks they’re sitting on gold, but if you are trying to underwrite and make sense of the project with today’s rents and costs, it’s very challenging for these areas,” he said.

Opportunity Zones were among the topics Cummings discussed with The Real Deal‘s publisher Amir Korangy in a fireside chat during Urban Land Institute’s West Palm Beach Development and Investment Forum on Friday at the Hilton West Palm Beach.

As a developer and investor in retail and multifamily developments across the Southeast, Cummings spoke more about the broader real estate market than about West Palm Beach. Ram Realty specifically focuses on distressed and value-add properties in high-growth markets like West Palm Beach, Charlotte, and Atlanta.

In South Florida, the company owns Mainstreet at Midtown in Palm Beach Gardens, a mixed-use project on about 47 acres with 96,000 square feet of retail, restaurant and office space and 225 luxury condominiums. It also owns Indigo Station, a project with 7,675 square feet of retail and 226 apartments in Deerfield Beach.

Despite owning retail and a mall in Chapel Hill, North Carolina, Cummings sees the broader retail market facing greater challenges. But he believes there are still some good opportunities in the asset class, especially with the right mix, such as grocery stores and fast casual restaurants.

Cummings said he also sees opportunity in development near public transportation such as Light Rail in Charlotte and Virgin Trains in South Florida. The high-speed train formerly known as Brightline attracts developers to urban centers rather than expanding west in the Everglades, according to Cummings.

The issue, however, for developers, he said, is that often cities don’t allow density around train stations or public transportation. “If you are going to invest in mass transit, why would you allow someone to only build a five-story building?” he said.

When it comes to dealing with city governments, though, Cummings doesn’t complain about government officials who are apprehensive about development. “There are municipalities that you can do anything you want pretty quickly, then someone can build crap next door,” Cummings said.

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