Residential market continues to surge.

Clearly, residential is still the hottest real estate market around.  Single-family and condominium sales are keeping residential real estate brokers happy as historically low interest rates have enabled buyers to afford  higher priced homes.  However, positive home sales have taken a bite out of the apartment market as tenants are purchasing homes.  The result is the highest apartment vacancy rate in 10 years — 15% to 12%— depending on the product and market. 

Are drive-through facilities a service of the past?

Bankers will tell you that their customers demand drive-through banking facilities; dry cleaners concur.  New city zoning code changes will severely restrict drive-through facilities in the city.  Only financial institutions may have a drive-through in the downtown and only on “secondary grid” streets.  The new zoning codes — OND, OCD, ORD and SMH — that replace OPB, OPB-1, OP and MCI specifically prohibit drive-through facilities.  How will the market react?  Stay tuned.

Record sale

1549 State St. recently sold for $750,000 to H & P Realty Group.  The buyer promptly demolished the three-story building on the 5,000-square-foot site at an estimated cost of $25,000.  Extrapolating:  the land sale is a record $155.00 per square foot. 

New projects demand higher rental rates

For almost two years, office vacancy rates have steadily increased while rental rates remained the same, or in some cases even decreased.  Contributing factors: the recession and general lack of confidence in the economy.  Fortunately, we are starting to see a flicker of hope as leasing activity has increased and developer confidence is evidenced by new projects being planned.  The four planned projects downtown and near the hospital are “asking” office/retail rental rates of $22 -$29 per square foot triple net compared to current triple net rates of $14-$18 per sq ft..  While a few existing buildings are commanding similar rates, this is a threshold in our office market.  New product always demands higher rates and given the age of our existing office supply, the new rates may not be a stretch. 

Tamiami Trail continues to change

Older buildings are being replaced by new as the redevelopment of the U.S. 41 corridor continues.  North of Siesta Drive, the driving force is Sarasota Memorial Hospital as medical uses continue to take advantage of proximity to the hospital and great visibility.  Vacant land sales in the area have reached an historic high of $43 per square foot.

Tenants: Now is a time to buy

2002 was a wait-and-see year for businesses looking to lease new space.  Conversely, 2002 was a tremendous year for commercial real estate sales.  Lack of confidence in the economy curtailed many planned leasing moves while low interest rates provided an opportunity to buy not seen in 40 years.  Rates remain at historic lows as we march into 2003.  Do the math. You can buy or build a commercial office building and pay less in mortgage payments than you would in rent.  If purchase is an option, this is the best of times.