By the Numbers - Fall 2017

Casual observers may see all the construction downtown and reflexively assume that our market is increasing in office supply. The reality is that almost all the new construction is residential in nature, following a wave of hospitality projects that began two years ago and will add nearly 1,000 new rooms to the city’s stock of lodging units. There is almost no new office being developed, save for a smattering amount that will be part of The Mark, a 12-story project downtown, and an office and retail building along State Street. The largest new office building developed in Sarasota in years, at 1936 Ringling Blvd., contains just 40,000 square feet. Why? It’s simple: The demand for new office space is largely insignificant, while demand for residential units is considerable. . Apartment rents in downtown’s new projects are ranging or are projected to range from $1.90 per square foot to $3 per square foot per month. This equates to a modified gross annual lease rate of $22.80 per square foot to $36 per square foot. The numbers show that residential rents are generally much higher than those of comparable Class A office rates. More importantly, the residential demand among consumers who wish to live downtown is proving to be both strong and consistent.