“Space is getting leased, people are moving in, and you are starting to see some rent increases,” says Brian Kennelly, chief operating officer for the Starling Group, which tracks data for the Economic Development Corporation of Sarasota County. “Concessions of years past, such as free rent, have disappeared.” We talked with three top commercial real estate agents, representing Manatee, Sarasota and South County, to find out what trends they are seeing in their markets.
DOWNTOWN SARASOTA John Harshman HARSHMAN & COMPANY Where are the area hot spots? Downtown Sarasota, particularly for residential and hospitality. There are about nine major projects under construction, including two new hotels, five new condominiums and two new rental apartment projects. The new projects will bring new residents and visitors to downtown Sarasota, attracting new retailers and dramatically changing downtown Sarasota demographics―primarily an increase in the number of permanent and transient residents and the highly anticipated increase in buying power this population increase represents for this relatively small geographic area. What types of properties are moving most quickly? Vacant residential development sites downtown are moving the fastest along with sites that have been prepared for developments that failed during the Great Recession. As always, quality locations such as those on the water-
front or with water views are the most desirable, followed by properties with easy access and close to downtown amenities. What should landlords be thinking about if they want to lease space? Landlords need to renovate older retail space, providing tall ceilings, open floor plans and updated storefronts to command the highest rental rates and attract top quality retailers. Are there any impressive newcomers? The major ones are the hotels― Aloft, Westin, Marriott and Embassy Suites. Wawa, the Pennsylvania-based convenience store chain, started opening stores in Florida last year and is looking at a downtown site near Fruitville Road and East Avenue. Where are the challenges? The office market is the most challenged sector, with industrial a close second. Office and industrial vacancies increase and decrease, relative to employment levels. Both sectors have been impacted by changing business practices. In the banking industry, for example, facilities are becoming smaller; drive-through tellers are less of a necessity and large lobbies are features of the past. Also, technology has changed how some companies conduct business and they are no longer restricted to brick-and-mortar locations, so their office needs are not as great. Where are the good deals? The market has reached a level that the only profitable option for a developer is to build a condominium or a for-sale project. To make the numbers work, an apartment developer can only pay up to about $22,000-$25,000 per unit for land. A condominium developer can and will
pay significantly more than $25,000 per unit for land. The Quay and Main Plaza are two properties to watch. Both sites are large―four acres at the Quay and about nine acres at Main Plaza―well located and will require a sophisticated developer with a vision and understanding of our market to tackle the challenge of delivering truly exceptional development. The cost of development on either parcel will require significant financial capacity and staying power. Both parcels are impacted by obstructed views, and the Quay site is impacted by its proximity to the water. Top recent sale? Our company facilitated TerraCap Management’s $37 million acquisition of the Gateway Professional Center at Fruitville Road and Interstate 75. The property has four Class A suburban office buildings totaling approximately 247,000 square feet, making it one of the biggest recent sales in Sarasota County. Who are the top commercial landlords in your area? Some of the landlords controlling the greatest amount of square feet are Osprey Management Osprey Real Estate Services, LLC, Benderson Development Company, George Spector and Mark Kauffman.
MANATEE COUNTY Janet Robinson COMMERCIAL DIRECTOR, COLDWELL BANK COMMERCIAL Hot spots in Manatee County? Anything along the I-75 corridor in the two-county area is booming. A number of companies have contacted us but
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People to Watch 2015