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Sarasota Commercial Real Estate Market Status - Winter 2008
It is no secret that commercial real estate market activity has been slow for 12 months, but most experts think the current market has reached its bottom. When will we see the market rebound? No one can precisely predict when this down cycle will change, but reliable pundits expect a turn around in 8-12 months.
Even with the modest market pace, transactions are still being closed and deals are being negotiated. Some sectors like industrial leasing are hit harder than other sectors, but the market still breathes. There are bright spots in the market as leased investments with cap rates of 7% and above attract lines of buyers depending on the property location and quality of tenant. Hotels are also hot. Review the site plan notices and it seems that every developer is planning a hotel. No less than eight hotel projects are being processed by city staff. Not all eight will be developed but the few that will be developed will provide a much appreciated burst of activity to our downtown.
There is some talk about foreclosures of commercial properties. There will be a few but not enough to warrant waiting until that “perfect” steal surfaces. Many sellers have already reduced prices which will also help stimulate the market. Caution to buyer’s waiting to “time” the market for that perfect deal. Wait too long and the market will turn and the good deals of today will be a memory just like the intense market activity of two years ago.