Real Estate Bubble?

Across the country, real estate has been the shining light in an otherwise lackluster economy.  Historically low interest rates have created buying opportunities where none existed, and all market sectors are experiencing new highs in sales prices and activity. Many tenants are now buyers—creating demand and increasing prices to record levels reminiscent of the tech stock bubble.  As long as interest rates remain low and stable the bubble should not deflate.

Projects, projects and more projects planned for downtown

The number of residential projects planned for downtown stuns even the most ardent supporters of development.  The latest count is 30 projects totaling approximately 1,700 residential units.  Prices on downtown condominium or townhouse units range from $350 to $660 per square foot.  While pricing is setting new record highs; unfortunately most of the buyers are not year round residents adding only seasonal infusion to the vibrancy of downtown. 

Office rental market is stable

The latest market data indicates some stabilizing in the downtown office market.  Vacancy in Class “A” office space increased to double digits over the past few years as the nation stepped through a recession.  Today there is a glimpse of recovery as recent office surveys indicate downtown Class “A” office vacancy at just above 10%.  However, vacancies have remained at an uncomfortable level long enough for some building owners to begin to offer rent concessions. 

Hospitality taking it on the chin

9/11 and two lackluster tourist seasons have significantly impacted the hospitality industry.  In a market like Sarasota that heavily relies on tourism and seasonal visitors, this hurts a lot. The impact is evidenced by the six restaurants in and around Main Street that have recently closed. Two new restaurants have opened. The net loss is not terrible, but indicative of the tough times in the hospitality industry.

Clark Road maturing;

New medical office centers and auto dealers are lining Clark Road.  Businesses are attracted by the available zoning, easily flowing traffic and established residential buying power.  Prices have increased significantly over the past few years with land selling now around the $15-$20 per square foot range and buildings over $150 per sq. ft.

Industrial building sales reach new highs!

Not too long ago, industrial buildings in planned industrial parks sold for $35 per square foot.  Recent sales are in the $70 per square foot range.  This can be attributed mostly to interest rates, but once prices go up, they rarely retreat.

Office condos

The feverish buying market has tenants scrambling to buy office and industrial buildings, absorbing current product inventories.  Developers are reacting by reviving office and industrial condos.  While industrial condos are priced around $100 per square foot, office condos sell for as high as $240 per square foot for well located product.

Record sale price

The corner of Gulf Stream and US 41 sold for $28.7 million or $230 per square foot, a record sale price.  Planned for this site are 128 condos.