With the economy making a slow recovery, there are signs that the commercial real estate market in Florida is also starting to rebound from the recession. With a recovery in the commercial real estate markets, we should start seeing demand for office, industrial and retail commercial space, which equates to more businesses growing and expanding.
According to Costar, a full recovery will take time, but over the past 10 years, the changes that the commercial real estate market has experienced will hopefully not happen again -- in fact, experts believe that it is unlikely that we'll see that sort of bottom out in our children's lifetimes.
The Florida office market has seen a lot of movement with Class A tenants moving to Class B spaces to save money, while Class C tenants are moving to Class B space because the rents are more affordable and the space is nicer. Overall to date, Class A office space has the highest vacancy at 22 percent, Class B has 17 percent vacancy and Class C has the lowest vacancy rate at 12 percent.
Tenants have more options for space to choose from and the trend seems to be that tenants are demanding a quality location that has lower rents and removal of all deferred maintenance from their properties. These incentives will continue to attract new tenants in the competitive office market.
Industrial space has remained stable through the recession and the small employment gains in the area have helped the industrial rental market.
The Florida retail market is the strongest of the commercial markets, but it is also directly tied to consumer spending. Until the economy stabilizes further, retail confidence will remain in flux. When the economy does stabilize and shows consistent growth, experts believe that the Florida retail market will rebound the quickest of all the commercial markets.
Source: News-press.com, "Southwest Florida market is showing signs of recovery," Mark Alexander, Mar. 10, 2012
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