State of the Market - 1st Quarter 2020

Sarasota’s commercial real estate market can best be described as healthy, strong, patient and changing. As we have stated previously in these pages, with historically low unemployment rates, our commercial real estate markets are active and robust. But not every property succeeds, even in an up market. Some struggle because of what surrounds them. Consider Westfield Corp.’s Sarasota Square Mall. Despite a multimillion-dollar renovation and the inclusion of an internal movie theatre more than a decade ago, and more recently the addition of a Costco Wholesale discount warehouse, it has been dying a slow but almost certain death, as have many enclosed shopping malls across the country. Unfortunately, neighboring businesses and investment properties have suffered along with the decrease in mall traffic. Banks, too, have changed their business models and impacted the real estate they occupy. As such, many vacant buildings that once counted banks as primary tenants of 6,000 square feet or more have sat fallow. Banks today occupy just 50% of the space they did a decade ago.  Meanwhile, retail merchants continue to be challenged by online sales and the promise of convenient and fast delivery – a phenomenon that is good for the consumer but presents challenges for retail landlords. This is the dynamic nature of our marketplace.