State of the Market - Fall 2016

Southwest Florida’s commercial real estate market continues to be very active, the result of a multi-year growth cycle that has been marked by low interest rates and a robust capital market. Sarasota, in particular, is experiencing strong pockets of growth – especially downtown – even as some areas continue to be buffeted by challenges. Several high-profile recent office transactions – including the $15.9 million sale of the PNC Building on Ringling Boulevard downtown; the $23 million deal for the BMO Building at Ringling Boulevard and Pineapple Avenue, also downtown; and the $37.1 million purchase of the four-building Gateway Professional Centre, on Cattlemen Road in Sarasota County, have demonstrated considerable investor interest. Additionally, the development of roughly 800 new hotel rooms downtown and the recent $16.77 million acquisition of the 95-room Indigo Hotel, at U.S. 41 and Boulevard of the Arts, show that the city is becoming a year-round and multi-faceted destination in which stellar beaches are just one of many draws. Retail rental rates, meanwhile, have risen to about $30 per square foot for first-generation space – a long way from the $17 per square foot to $19 per square foot rates of a decade ago. The much anticipated delivery of some 3,000 new residential units under construction in and around downtown will bring new consumers and are expected to boost retail demand and hike rental rates.