WHERE ARE WE AND WHAT’S NEXT
Insights into Southwest Florida’s office, industrial and retail markets
A first quarter market survey by Valbridge Property Advisors indicates that the Southwest Florida commercial market continues to improve. The office, industrial and retail markets all experienced higher occupancy levels with positive absorption of new space in almost all sub-markets and asking rents remain stable.
VACANCY LEVELS IN SOUTHWEST FLORIDA THRU Q1 2017
|OFFICE: 7.5%||RETAIL: 5.5%|
The office market continues to show slow but steady improvements, with positive absorption of vacant space and a range of asking rents between $9 to $22 per square foot. Office users downsized during the recession and cloud-based technology has allowed for more efficient work outside of the traditional office space, which has had a major impact on the demand for space. Fortunately for our local market, the positive growth in residents has helped off-set some of these factors.
Fortunately for our local market, the positive growth in residents has helped off-set some of these factors.
The industrial market industrial market has seen the strongest performance, with a vacancy level of 2%, down from almost 5% from the prior year, this market is benefiting from strong sales of existing residential units and a continual increase in new residential development. New industrial developments are proposed and under construction right now.
Once again, the continued growth of residential construction benefits the retail market and more roof tops means more demand for retail services. Improving occupancy levels and stable rents continues to strengthen this sector. As we have witnessed, e-commerce has had a significant impact on the retail market, with winners and losers. Negative news related to long time retailers has hammered the market. However, retailers and landlords are adapting. Expectations are for continued volatility as market participants react to the changing consumer behavior. Locally, we are witnessing extensive growth in grocery anchored centers as new companies, such as ALDI and Whole Foods, enter our market.
Locally, we are witnessing extensive growth in grocery anchored centers as new companies, such as ALDI and Whole Foods, enter our market.
Most market participants are bullish on the future of commercial real estate due to the expectation of continued economic growth, the availability of capital from a variety of sources and the continued investment yield advantages of commercial real estate versus other investment alternatives.