Florida’s Commercial Market
While it won’t be a stellar year for Florida’s commercial real estate markets, increases in vacancy rates are likely to be moderate, according to several analysts. The state’s office, industrial and retail markets will all be affected by the national economic downturn, but a vast oversupply is unlikely due to low levels of construction in most metro areas.
Perhaps the brightest spot in the commercial market: industrial properties in international gateways like Jacksonville, Fort Lauderdale, Miami and Tampa that benefit from strong U.S. export trade.
However, the retail sector will be hard hit by a falloff in consumer spending and high household debt levels, says Wayne Archer, executive director, University of Florida’s Bergstrom Center for Real Estate Studies in Gainesville. “After seeing what’s happening to their home values and watching the news, they are deferring purchases,” he says. “As a result, most retail organizations are curtailing their expansions and consolidating their operations and stores, which is creating higher vacancies.”
In the office market, newly constructed buildings are attracting tenants from older buildings, according to Lewis Goodkin, president, Goodkin Consulting, Miami. “We see tenants playing ‘musical chairs.’ I think that 2009 will go down as a year of wheeling and dealing between tenants and owners. Fortunately, we are in far better shape in terms of inventory with office and industrial than we were in past downturns.”
Richard Westlund is a Miami-based freelance writer.