Market Study - Spring 2015

Office Market

Of the roughly 1.563 million square feet of Class A, multi-tenanted office space in downtown Sarasota (within buildings of 30,000 square feet or greater), 13.73 percent remained vacant at the close of the first quarter of 2015, a slight increase in vacancy from the previous quarter brought on by further downsizing in banking, real estate and related industries and somewhat sluggish job growth. Many tenants have benefited from reduced rental rates and landlord concessions over the past years, and while significant discounts aimed at retaining or attracting businesses have largely disappeared, Sarasota office space remains a tenant’s market. 

Industrial Market 

The region’s industrial market is slowly climbing out of the doldrums brought about by the Great Recession. Perhaps the best evidence of this is that bank-owned industrial properties have been selling, diminishing the supply of distressed properties. While this market is expected to remain constrained for some time, evidence of a full recovery will only come when we see new construction. That is the point when properties will begin to trade for above their replacement costs, a sign that industrial buildings and land have recaptured past viability. There is approximately 18.74 million square feet of industrial space within Sarasota County and roughly 927,277 square feet, or about 5 percent, on the market for sale.

Downtown Residential Market

Overall, there are just over 3,330 residential units, in the form of condominiums, within downtown Sarasota. Last year, 320 of those units sold at an average sales price of $682,385, or $363 per square foot. That represents a 13 percent increase from the 283 sales, at average sales price of $603,222, or $331 per square foot, in 2013. The nearly 10 percent jump in the per square foot price reflects the growing perception that downtown living, with the host of urban amenities that Sarasota has to offer in arts, shops, restaurants and alike, is valuable. The trend also depicts the reality that downtown residential units, despite new offerings from the Vue, the Jewel, Q and others, are finite in quantity.

Retail Market

The downtown retail submarket experienced tremendous resurgence beginning in 2012-13, with the addition of new tenants such as jeweler Alex and Ani and athletic outfitter Fit2Run in space once occupied by Patrick’s restaurant. Over the course of the past year, activity has largely been constrained and limited to a few new leases. But a few key downtown properties remain available, and could lead to a tremendous uptick in activity for the balance of 2015. Most notably, the owners of the former Golden Apple Dinner Theatre are offering 14,000 square feet for lease complete with a flexible floor plan that could accommodate a variety of businesses. Meanwhile, a total of 30,000 square feet is being marketed on the ground floor of the 13-story Ellis Building, where Bank of America leased space for years. Owner Benderson Development Co. is currently marketing the space to restaurants or other retailers.