Like most real estate markets in the US today, the commercial real estate market in the Sarasota-Bradenton region is seen as a struggling one these days, compared with other markets across the country. This fact was analyzed according to a new report released by the New York-based analyst, Integra Realty Resources. Although the report says that recovery will be slow, and may not fully happen this 2008, some local experts are disputing the findings, and say that the region should not be lumped together with other weaker markets, such as those in the northeast of the country.
Office And Retail Markets Are Currently Flat, However Some Disagree
The Inegra Realty report, which is annually published for the last 18 years, verifies current market conditions for office, retail, industrial and apartment properties. IRR is made up of a network of independent appraisers and has 58 offices across the country, which includes the Southwest Florida region, Tampa and Naples. The report analyzed and ranked each market it studied as being in one of four stages: recovery, expansion, hyper-supply or recession. In analyzing the office market for 2007, the Sarasota-Bradenton area was noted as one of only three places nationwide to be in the "recession" stage, along with the cities of Detroit and Dayton, Ohio.
Majority of the other markets analyzed were either in the "expansion" or "recovery"stages. The recent report suggests that Sarasota-Bradenton region was not faring all that well with its retail market as well. Although IRR found 71 percent of markets experiencing retail expansion in 2007, the local market was analyzed to have fallen into recession in that category as well, largely in part because of the bursting of the housing bubble. The report adds that Sarasota moved from expansion into recession as the effects of the housing slump were felt.
According to the director of the Institute for Economic Competitiveness at the University of Central Florida, while he agreed with the sentiment that housing was certainly having an effect on the commercial sector, he was a bit skeptical of the report's conclusions though. According to the UCF expert, "the commercial side is definitely seeing a decline," referring to the local market. "But for Sarasota to be lumped in with a city like Detroit, that's a little shocking to me. The underlying economies of those two places are just completely different. The University of Central Florida analyst notd that it's sometimes hard to know what figures into an analysis like IRR's, and adds that he would have to take a closer look at their methodology to see how they came to that conclusion.
Some Are Not Surprised At The Report's Findings
According to local real estate analysts, with more businesses leaving Florida than moving to the state, the commercial real estate sector may be in for a tough and tricky year. The local experts says he was not surprised to see Sarasota-Bradenton's office market listed as struggling in the IRR report.
Local housing observers say that, "In Sarasota, offices are very flat and will likely be that way for some time", and that "There's already more than what's needed when it comes to office space."
Some note that when it came to Sarasota-Bradenton market as a whole, there was a long way to go, and most don't believe Sarasota is on the path to recovery yet in 2008. Many view that new construction across the board is likely to slow, with anything connected to the residential side being especially hard-hit. New condominium projects that were the norm during the boom periods are now proving almost impossible to finance.
Vanessa Arellano Doctor