State of the (Office) Market - Spring 2017

Downtown’s Class A office vacancy stands at 15.3%, with the available space at 17%. This unacceptable high vacancy is the result of some significant new vacancies – most notably the former Herald-Tribune building, at 1741 Main St.; a full floor at Five Points Plaza; and the soon-to-be vacant top floor at Ringling Square. One positive trend, though, are sales: Four major downtown buildings have sold within the last two-plus-years, despite a marked change in office use since the Great Recession. While some businesses continue to need office space, technological improvements and morphing sociological norms are combining to reduce overall footprints, as virtual offices and electronic business evolve obviating bricks and mortar. Banking has had the most obvious evolution, as large lobbies are a luxury of the past and their office space continues to be streamlined. Looking forward, the new residents coming to downtown should result in some increased demand for office space. The question remains whether that demand will be enough to bring vacancies back to the 3%-5% level that Sarasota experienced in the 1990s.