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Is this market sustainable?

This real estate market is truly incredible! Residential condominium sales from $400 to $800 per square foot are the norm rather than the exception, office buildings sell for over $275 per square foot, and industrial buildings sales surpassed $70 per square foot. Who would have anticipated this market and are prices going to continue to rise? Forecasting out  nine months, we can expect continued strength in the real estate market. We can also expect sales prices to continue to increase as demand remains strong, interest rates remain low and the economy remains solid. Thinking of selling your commercial real estate? Should you sell now or wait? No one can pick the top of the market, but if you are thinking of selling, this is the best time to be a seller.

Inflation?

There is talk of inflation particularly when the conversation is focused on the increasing prices for fuel, concrete and steel. The big picture tells us that product prices often fluctuate, basic economic indicators are inline and the national economy is healthy and growing. Now real estate prices have increased dramatically over the past 4 years, but are real estate prices inflating or are they simply appreciating? Well, that depends on if you are a buyer or seller.

Perspective.

Construction in Sarasota is at an all time record pace.  Sarasota is not alone !   Look around the state and nation and you will see that almost every major city in the country is experiencing unprecedented building.

Is Real Estate a good investment?

Many investors have been able to quickly turn their properties into profit.
- A 7,962 square foot parcel zoned C-CBD at Ringling Blvd. and Osprey Avenue sold in March 2003 for $275,000 and then resold in May 2004 for $510,000.
- A 2.07 acre parcel with a 30,000 square foot building zoned ILW on Cattleman Road sold in April 2003 for $1,320,000 and then resold in April 2004 for $2,200,000.
                                                        
Investment Real Estate.

In today’s escalating market, investors often look to real estate for appreciation rather than annual return are 6%-8% with few on the higher end. Some investors are converting  average real estate purchases into great long term real estate investments. Case in point; 4380 Independence Court, an 8,000 sq ft industrial building sold for a respectable $70 per square foot and the new owner leased the property for $8 per square foot triple net after only one month on the market. That’s an 11.5% return! Not bad in today’s market.

Changing North Trail. 

Even with historic anchors like New College, Ringling Museum, Ringling School and Sarasota Bay Club, north Tamiami Trail real estate never really took off. Clearly that has changed,  largely due to the strong market of the past few years. The Alanari, Broadway with a Publix, and San Marco are just a few projects soon to come out of the ground and many of the smaller sites are the focus of keen eyes for redevelopment. How does this activity translate into dollars? Land zoned “North Trail” now sells for approximately $35 per square foot when just three years ago the prices were in the $8 per square foot range.

Changing Rental rates.

Rental rates in industrial space has increased over the past 3 years from $4 per square foot to $8 triple net.    I-75 corridor office rates have increased from $16 per square foot gross to $22 gross and retail rates have increased steadily over the past 5 years. The anomaly in our otherwise  booming real estate market is downtown office rental rates which have remained relatively unchanged. 

The best deal in town.

If you are interested in renting downtown office or retail space, then you are looking at the best deal in Sarasota real estate. Existing office buildings lease for 1/3 less than new buildings and retail rates are ½ to ¼th the price of retail space on U.S. 41 and in Southside Shopping District and the Malls!