2018 Is History – What Did We Learn and What Did We Experience? - Winter 2019

Throughout 2018, Southwest Florida’s commercial real estate market was both strong and disciplined, and the region experienced historically high employment. Confidence remained high across various sectors. Cash buyers continued to be a heavy influence on the market, particularly when short contingency purchases gave them a leg up in competing for key properties. Construction costs also continued to climb by as much as 20%, impacting many facets of the real estate market. Lending institutions, meanwhile, increased their activity, though with a careful and disciplined approach that stood in stark contrast to that of slightly more than a decade ago. Newly developed multi-family rentals and for sale properties dominated the market despite a recurring question – will all this new product be absorbed in a timely fashion and at pro forma prices? We at Harshman & Co. contend the answer to those inquiries will come to light before the end of 2019. In other sectors of primary interest in the Sarasota market –industrial and office – office leasing and sales showed a strong rebound in 2018, pushing vacancies to approximately 11% and sale prices near $300 per square foot. Industrial property sales and leasing continued at an acceptable clip, albeit at a slower pace than in recent years.