Help Spread the upbeat word about Southwest Florida....Things are a changin'!

I'd like to point out the Lee County was the Number 1 County in Florida for Population Growth during 2006-2007.

Lee County had a Population increase of 20,475 bringing us to a total of 590,564 in Lee County, a 3.6 percent increase, according to the U.S. Census Bureau, with Broward seeing a decrease just under 1 percent.

Lee's growth topped Pasco, the next fastest-growing county, by more than 3,600. And Lee's trend also was opposite of two neighboring counties: Charlotte for the second year in a row saw a decrease in population of 233; Collier's population increased 2,672, less than 1 percent.

Overall, the state grew by 1.1 percent during this time, to 18,251,243 from 18,057,508.

Pending sales for Lee County in the month of January registered in at 565; pending sales for February weighed in at 983 and totaled 1,050 through March 4, an increase of 86 percent over 33 days. Basically, in the last 60 days we've experienced a significant pick up in sales throughout Florida, and that's encouraging.

Markets cycles are NORMAL and ours will rebound...The silver lining is that regardless of market conditions, there have always been opportunities in Southwest Florida real estate.

It's just a matter of identifying, recognizing and capitalizing on them.

To predict the market's future based on what's happened in the past, one must examine all of the below methods and then draw some conclusions about where the market is heading.

The most meaningful analysis and relevant comparisons will take into account an entire market, based on units of comparison that are standard in the commercial industry. Although various capitalization methods may be used in calculating the value of income-generating real estate, here are the ones that are frequently used and widely accepted:

• Income Stream. Income producing property sales prices should not be evaluated according to price per square foot. While that might provide an appropriate appraisal of user-owned property, it should not be used as the basis of valuation when comparing income-generating assets. Income streams are what make income-producing properties different from owner/end-user real estate.

Determining value based on income is fairly straightforward. Typically, the process is simply a matter of analyzing basic data (such as income and expenses) and comparing it as a ratio to price.

The decision to purchase is based on the likelihood that the income stream will either remain in place or grow. In other words, commercial investors are buying because of the future economic benefits that the income-generating asset is expected to provide.

• Percentages. As part of the income approach to value, investors may also compare common percentage relationships to the standard for the area (provided the information is available). Because this approach applies only to income-producing properties, it can provide an apples-to-apples approach to identifying market value. For example, how do the subject property's expenses as a percentage of gross income compare to similar properties in proximity?

• Cap Rate. To compare a shopping center that's fully leased with one that's vacant is flawed and misleading. Although it would be appropriate to look at a vacant space on a per-square-foot basis, the value of an occupied, rented commercial building must be calculated in terms of a multiple of its income. In our industry, that's known as a capitalization, or "cap" rate.

Capitalization is defined as the process of converting an income stream into value. For example, if I pay X number of dollars for a leased building that's producing X number of dollars in rent and I make an income-to-price ratio, that number would be the property's rate of capitalization, or cap rate.

Cap rates are this market's most popular method used to determine where income-producing real estate is valued today. When comparing cap rates in 2006 vs. 2007, my firm found values were stable to slightly down. That's why I was surprised and disappointed that cap rates were never discussed during the commercial real estate portion of the presentation.

• Cash-on-Cash. The cash-on-cash method looks at the return one receives on the cash one invests.

• Internal Rate of Return. This is the rate of return on capital that is, or could be, generated by an income-producing asset during a specific period of ownership. Often, this method is used to measure profitability after income taxes, much like an after-tax equity yield rate.

• Discounted Cash-Flow Analysis. This set of procedures specifies the quantity, variability, timing and duration of periodic income and discounts it to a present value at a specific yield rate.