Southwest Florida’s office market continues to be sluggish, but its performance is improving overall. Sarasota’s industrial market, meanwhile, is exhibiting incremental gains fueled largely by population influx and a perception of economic health. The area’s retail sector has mirrored a national trend. In affluent areas shopping centers, malls and retail outparcels have demonstrated resiliency amid sustained consumer confidence. In more marginal areas where housing has failed to rebound and wages have remained stagnant, however, stores have languished overall. The restaurant sector throughout Sarasota remains a healthy sub-segment, pushed forward by greater discretionary income and consumer demand for new offerings. That, too, follows a national trend in consumer spending.
In short, the market is on the weak side of healthy. There are notable exceptions, though, that belie overall trend lines. Benderson Development Co. has formally unveiled plans for Siesta Promenade, a mixed-use development consisting of residences and retail space at the intersection of South Tamiami Trail (U.S. 41) and Stickney Point Road. The project’s timing is significant in large part because it was a casualty of the Great Recession a decade ago. If Benderson is able to bring Promenade to fruition, it would demonstrate a market depth in south Sarasota that has to date been felt primarily in areas like University Town Center (UTC), Lakewood Ranch and certain city neighborhoods. Also significant are a pair of self-storage projects under construction on South Tamiami Trail, in response to the more than 3,000 new residents slated to live in Sarasota by the end of 2017.
Benderson also continues to add commercial space to UTC. The “East District” is being designed to eventually contain an iPic upscale movie theater and additional entertainment and restaurants when completed, according to company plans.
Over the next several months, look for A-quality retail spots to fill and backfill quickly upon vacancy and rental rates to inch upward. Office rental rates are rising with vacancy shrinking to 9 percent in Sarasota, as businesses vie for high-caliber space in proven locations. Harshman & Co. contends speculative industrial space could be on the horizon in Sarasota County, the result of higher sales prices that have reached replacement costs – a critical metric for development.