State of the Market - Spring 2015

While Southwest Florida’s commercial real estate market is healthier now than in the comparable quarter in 2014, it has yet to fully recover and the pace of recovery has been tepid. Office and industrial sectors continue to lag, a sign that employment growth has not yet gained significant momentum despite a series of positive job reports in the region. Still, pockets of downtown Sarasota – defined as Mound Avenue to 10th Street and from Lime Avenue to the Sarasota Bay – have rebounded extremely well, and many properties are now enjoying strong activity in the form of higher rental rates and sales prices. Development, too, has rebounded with numerous ventures under construction, including the 18-story Vue Sarasota Bay, which will contain 141 luxury condominiums and a 255-room Westin Hotel when completed. The St. Armands Circle retail submarket, in particular, has continued to experience robust leasing activity, and property sales there have remained strong despite the Great Recession and its prolonged aftermath thanks to the addition of new tenants. Throughout downtown properties acquired for investment – especially hotel and multifamily development – continue to be in high demand. At the same time, residential sales and development, a precursor of future retail additions, remain vigorous and many established neighborhoods have seen older housing stock razed and rebuilt. Just as significantly for future market viability, most bank- owned properties seized because of borrower defaults in the previous decade have been sold to new owners, leaving fewer distressed sales and more market-rate acquisitions.