2nd Quarter 2023

It is no surprise that inflation and steadily rising interest rates are impacting the Sarasota commercial real estate market. The 4%-5% capitalization rates are no longer marketable except for the most desired properties and owner users attempting to finance properties are experiencing new lending qualification guidelines. Population growth is the dominate factor buoying Sarasota and Florida above most other markets in the country as new residents to our market increase the demand for the limited real estate supply. Similar population increases would, in a stable interest rate climate, drive prices higher. However, the increased financing costs due to higher interest rates and tighter regulations are forcing price stabilization or price declines for the impatient seller. 

Downtown properties continue to receive significant attention and properties on Main, Palm or adjacent streets often receive multiple offers and unsolicited offers. The user buyer is sometimes overbid by out-of-town investors looking to secure a foothold in Sarasota downtown real estate or looking long term for assemblage opportunities. Downtown multi-family development sites remain in high demand with properties with water view achieving the highest prices. A new player has entered the market – The City of Sarasota is now competing for sites with the target of purchasing sites in the downtown core for attainable housing and the forecast is for some happy sellers.

National and regional retailers recognize the changing demographics and the area’s dynamic buying power. The former Taylor Ranch, Wellen Park in South Venice, is driving tremendous development opportunities as businesses rush to provide services to the new residents. Wellen Park is transforming the once quiet, rural area near River Road just as Lakewood Ranch has driven the transformation of all roads leading into the ranch. North Port is now the largest City in Sarasota County and the growth of Wellen Park will drive development and politics in South Venice on into the future.