In the local paper again today. 2009 will be a tepid year in my opinion. I do believe companies, even those on an expansion path, will take more of a wait and see approach this year. With rents coming way, way down, this also may present a never-before-seen opportunity to get positioned for growth once things start turning around. When will that be? I wouldn't expect much recovery until 2010 or possibly 2011.
Surviving a tough year in real estate
With commercial sales hurting, some agents found success in leases
By Michael Braga
Published: Monday, January 5, 2009 at 1:00 a.m.
There is no denying that 2008 was an extremely tough year for commercial real estate agents and that 2009 is shaping up to be even tougher.
Sales of commercial warehouses, office buildings, shopping centers and vacant land was down markedly from a year earlier and most agents were forced to turn their attention to leasing space rather than selling it in order to survive.
"We've got 17 people here and all they all do is commercial," said Joe Hembree, who owns Hembree & Associates in Sarasota. "With sales low, they're doing a lot of leasing."
But even leasing space was difficult in 2008, Hembree and others in the commercial real estate business say.
"It's been brutal," said Michael Polk, a Punta Gorda appraiser who leases space in office buildings he owns. "I've been here 20 years and this is the worst market I've ever seen."
The commercial market improves as you drive north, Polk said.
"It's not as bad in Sarasota as in Port Charlotte because there is not that much of an oversupply," he said. "But it gets much worse as you move south. Lee County is even worse than Charlotte County."
That said, there are still commercial agents in the region who have had success in getting space filled, and the kinds of companies they are attracting says a lot about which businesses are holding their own and which are falling apart.
"We did a lease for a home health agency that is expanding," said Diane Lawson, an agent with Abbey Realty in Sarasota. "Health care is one of the industries that is still looking."
Renee Richardson Kling, an agent with Richardson Kleiber Walter in Sarasota, said she has been helping several health, nutrition and fitness companies find space in easy-to-access strip malls throughout the area. One company in particular is geared toward working mothers.
"When you're in a down economy people want to better themselves," Kling said. "They might not be able to control everything around them -- the economy and world events -- but they can control themselves. When things turn around, they're in shape, they're feeling good and they're ready to go."
At the opposite end of the spectrum are companies that benefit from the misfortune of others.
Chad Maxwell, an agent with Century21 in Port Charlotte, recently found space in Punta Gorda for a real estate attorney who is now specializing in bankruptcy law. Anthony Migliore, an agent with Coldwell Banker in Sarasota, landed a pawn shop for space next to the Rumba Lounge on US 301 in Sarasota.
"Businesses like pawn shops -- and I would hazard to guess liquor stores -- are doing pretty well in this economy," Migliore said. "But there is no escaping the fact that there are more and more vacancies out there."
The really big fish
In addition to finding space for a pawn shop, Migliore also handled his share of really big leasing deals during the past few months.
He helped Peek Traffic, a Bradenton maker of traffic control devices, move out of a 50,000-square-foot building and into a slightly larger building nearby.
"Their old building was 50 percent office and they needed more manufacturing space," Migliore said. "Rather than reconfigure, they decided to move across the street."
The deal worked out well for the owner of the building that Peek moved into -- a downsizing manufacturing company that makes gripper elevators and palletizers for the printing industry.
Migliore found 10,000 square feet of space for that company and 1,100 square feet of office space for Berlin Packaging, a Chicago-based company that makes stylish glass, metal and plastic containers for everything from perfume to shampoo.
Few Realtors in the region, however, saw more success over the past few months than Roberta Kolton.
The daughter of a longtime Michael Saunders agent, Bob Kolton, Roberta leased 90,000 square feet of industrial space to three companies during the past three months. Two-thirds of that leased space was in the 500,000-square-foot manufacturing plant that Wellcraft Marine vacated earlier this year.
One of the companies that took 40,000 square feet was Windproof Homes, an Ohio housing panel manufacturer that moved its headquarters to Sarasota. The company's Web site shows that Windproof specializes in making panels that are bug-proof and can withstand winds of 150 miles per hour.
"The current demand for affordable housing with a green mindset has made these panels almost a necessity for the builder of this day and time," the company's Web site states.
Another company to move into 22,000 square feet at the old Wellcraft operation was Legend Custom Yachts, a Sarasota yacht builder that specializes in high performance sport fishing boats.
"They were in 18,000 square feet. So they upsized," Kolton said.
What attracted both companies to the site were the extremely low monthly rents -- only $3.75 per square foot with taxes and insurance included, Kolton said.
The third company that Kolton landed was Horner Xpress Manasota, a pool cleaning supply company that took 17,000 square feet off U.S. 301 in southern Manatee County.
"The need for pool cleaning in Florida is not something that will go away," Kolton said.
Futuristic growth
Jeffrey Button, an agent with the Kleiber Group in Sarasota, also landed a whopper when he found 25,000 square feet of space for Structural Preservation Systems, a Hanover, Md.-based company that builds, repairs, protects, strengthens and reinforces concrete, masonry and other building materials.
Button said that Structural Preservation should be in a good position to take advantage of the infrastructure-related spending when Barack Obama becomes president. The company already has a contract with a power plant in Crystal River.
Structural Preservation boasts on its Web site that it has "completed more than 14,000 repair projects; 26,000 post-tensioning projects; and 10,000 chimney, stack and silo projects through the efforts of more than 2,300 people working together from operating centers across the United States."
Meanwhile at the Port Manatee Commerce Center, Button's brother, Kevin Button, said that Seabridge Freight, a Jacksonville-based company that runs a barge service from Brownsville, Texas, to Port Manatee, has rented 2,800 square feet at his company's site.
"They bring containers into Port Manatee," said Button, operations manager for the warehouse complex. "Right now it's a 10-day service, but they are planning to step that up to a four-day service."
Button added that the barges will not return to Brownsville empty. They will carry concrete poles made in Bartow that will be used for a wind farm in Texas.
With the full backing of Manatee County, Port Manatee is an exciting place to be right now, Button said.
Button added that the economy may be in a down cycle now, but that will not last forever.
"You got to give Port Manatee credit," he said. "They are using this opportunity to set us up for growth in the future."
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