LEASED ANOTHER ONE! 999 Cattlemen Road.

This one was a double header: I sold this unit at 999 Cattlemen Road (Unit A) week prior to an investor and put a new tenant in the space on Friday for three years. Congratulations to Dance Artistry, Inc. on their new 2,280SF home. They look to be open on approximately July 1, so feel free to pay them a visit. The location is perfect for them - lots of glass and an endcap unit. Thank you!

LEASED ANOTHER ONE! 8,600SF.

Many congratulations to the new tenants at 5745 and 5755 N Washington Boulevard. I leased out this 8,600SF building to two tenants within a week. Save Our Homes, LLC took the right side (approximately 3,500 sf) and Coastal Granite took the remaining space.

Latest Office Vacancy Report, Sarasota County

The numbers are in for December. Downtown vacancy edged up, University Parkway vacancy is down and the rest appear stagnant. Overall vacancy is 19.15%.

Herewith the numbers:

Downtown Sarasota: 13.74% +
University Parkway Area: 18.22% -
I-75 Fruitville South to Clark: 21.27% (N/C)
Venice: 22.03% (N/C)
North Port: 37.28% (N/C)
Suburban & South Trail: 27.84% (N/C)

Source: Sarasota EDC

In 2010, Will Investors Who Hesitate Be Lost?

Good question.

None of us has a crystal ball, so it's tough to really determine if this is the case. Judging by my own experience, there are some fairly nice deals out there if you have access to money and are willing to keep the property until things recover. The problem with all of this is, without a good ability to predict what's going to happen, are these deals looking good because we're looking through the glass at prices now vs. 2006, or prices now vs. 2001? As I've stated before, I don't think certain assets can get any cheaper (while some certainly can). Seems as if my phone rings more with potential buyers as of late than potential tenants - something I haven't experienced since 2007. The banks I deal with on REO properties are behaving a little more proactively now than at this same time last year. One thing's for sure: we will not know when the bottom is here. THIS GUY (link) seems to think those who "overwait" the market for markedly lower prices than we have now will be sorely disappointed and miss the boat. I tend to agree.

From National Real Estate Investor (link at bottom of article).

In 2010, Will Investors Who Hesitate Be Lost?

Nov 1, 2009 12:00 PM, Sibley Fleming

While German and Chinese investors are already buying assets at discounted prices, many domestic investors are hoping to time the market to pick up even better deals.

With some $1.5 trillion in commercial mortgage debt expected to mature over the next three years and only $300 billion in equity sitting on the sidelines, more distress is imminent, according to Jeffrey Rogers, president and chief operating officer of New York-based valuation and consulting firm Integra Realty Resources.

Integra's clients include pension funds such as the California Public Employees' Retirement System, and investment banks like Goldman Sachs and Morgan Stanley.

“Whenever you're in that type of environment, where you don't have the liquidity to take out the mortgage debt, prices come down,” he explains.

The imbalance should result in a further decline in commercial real estate valuations. Over the next six months, Rogers predicts that property values will decline another 4% to 9%, on top of the 39% drop that's already occured since the peak in December 2007.

Currently, 48% of Integra's valuation assignments involve distressed assets, defined as real estate owned (REO), short sales, assets refinanced with an equity infusion, failed bank assets, assets resulting from bankruptcy, and assets with significant deterioration in operating income.
Real-life scenario

What will bring more distress to market? Rogers offers up this example: An investor acquired an office building in New York at the peak of pricing two years ago and didn't sign a personal guarantee. The property is underwater and its loan matures at the end of the year, but the bank is willing to extend.

Here's the sticking point: Although the property is 95% leased, a single tenant occupying 15% of the space is coming up for renewal at year's end. The big tenant says he'll leave unless the owner provides $2 million in tenant improvements.

“As an owner, am I going to put that money into an asset that I am under water on and having to extend my loan? No, I'm not going to do it,” Rogers maintains. “With my $2 million I'm going to go and buy a distressed asset and just write off whatever equity I have in that property.”

At this point the bank will have to decide whether to let the asset deteriorate further, to become an equity investor and retain the tenant, or to simply take the asset back and try to sell it. “This has already started to happen,” Rogers observes, “and is really at the crux of starting to get these defaults rolling.”   Read more.

5203 Cortez Road - Finally 100% Leased!

Another one in the books! Leased the very last unit in Scott Paint plaza at 5203 Cortez Rd yesterday. 1,150 SF goes to Budget Signs for 6 years. Congrats, guys. Glad I was able to help. Enjoy your new home!

FYI, this center had 4,600SF+ vacant when I took over leasing duties in November. Good to end the year on such a positive note.

Great marketing = great results. :)

So Long, 2009.

What a year you were.

Business was very much like a roller coaster this past year, with most my deals occurring during the summer and within the past two months (Nov-Dec). Overall I would rate 2009 as not too bad. 95% of my sales came from leasing. Nearly 100% of my leasing deals were taking people out of high rent situations and repositioning them into lower rent opportunities.

I have more bank-owned inventory than I did last year and I am only expecting that to increase. I am also expecting those waiting in the wings for distressed assets to finally start showing up, probably in the mid to latter part of 2010.

Where's the bottom? Who knows. And no one is likely to know until things start turning around. I believe (and have always believed) Florida's geography will help it emerge a little sooner than other distressed areas. If you're looking for a sign, keep an eye on GDP and employment figures.

So here's a toast to the year that was: 2009. Don't let the door hit you in the ass on the way out.

Leased! Leased! Leased! Leased!

Two units leased since December 1 in this strip mall next door to Wal-Mart on Cortez Rd. I have one 1,150sf unit left and that one looks like it might be spoken for. Welcome to Allison's Dance Centre and Purple Coconut Hair Salon. Allison's took 2,250sf for 3 years and Purple Coconut took 1,200sf for 2 years. Out of my approx. 40 listings, this property has been the most active.

Latest Office Vacancy Report (November)

The numbers are in for 11/09. They are as follows**:

Downtown Sarasota: 13.74% (+)
University Parkway: 18.22% (-)
I-75 Fruitville S to Clark: 21.27% (n/c)
Venice: 22.03% (n/c)
North Port: 37.28% (n/c)
Suburban & South Trail: 27.84%

** = does not include sublet space.

Leased Another One! John Deere.

Moline, Ill-based JOHN DEERE, INC. (NYSE: DE) has leased 10,000SF of office and warehouse space for its landscape division at 1360 12th Street in Palmetto from HDVN, LLC. Deere, a $28-billion (worldwide sales) company, is ranked 102 in the Fortune 500, and leased the space for 3 years with options. Anthony V. Migliore of Coldwell Banker Commercial represented the tenant. The landlord was self-represented.

Is The Bottom Near? Forecast Says So.

Tough to say.

I'm of the belief that rents in certain areas of town cannot go much lower at this point. I have a few properties where, after the pass-through expenses are stripped out of the gross rental figure, the owner is maybe taking in $0.50 a foot or even less at the end of the day. Doesn't leave much room for error. And even with these record low rents, tenants are tough to come by. In some of these cases, theoretically, the property is probably worth more vacant than with a credit tenant in place. Sad but true.

Pricing anything is very difficult due to a lack of reliable comps. I get some ridiculous "drive-by" sign calls from people offering $20/ft for halfway decent downtown property. Can't blame 'em for trying, I guess!

Emerging Trends: "The Bottom is Near!" Predict CRE Forecasters
Most Market Forecasters See a Pricing Bottom Next Year, and at Least One Prognosticator Suggests that Transaction Pricing for Institutional Investment-Quality Real Estate May Have Already Bottomed in the Third Quarter

By Randyl Drummer

November 4, 2009

Having reviewed the next round of commercial real estate surveys, forecasts and emerging trends issued this past week for 2010, about the only good news appears to be that the market has hit bottom -- or will soon. Rents and values have continued to fall across virtually every commercial real estate sector and across almost every market.

However, forecasters see the prospect for near-term opportunity once the markets bottom out, bringing a long-expected deluge of loan workouts, write downs, defaults and foreclosures -- along with the time-tested rush by patient, cash-rich investors, who, with some fortunate timing, will be able to tap some very attractive buying opportunities at bottom-of-the-cycle prices.

Also, leasing activity is expected to increase as tenants seek to take advantage of sharply lowered rents, resulting in more potential commissions for brokers, but also likely resulting in more pressure on highly leveraged building owners.

At least five major surveys and forecasts have been released since late last week by such influential industry groups as Real Estate Roundtable, the MIT Center for Real Estate, the National Multi Housing Council and NAIOP. PricewaterhouseCoopers and the Urban Land Institute released one of the industry's most widely watched surveys, the annual Emerging Trends in Real Estate, on Thursday morning.

The surveys tend to confirm the 2010 projections made last month by CoStar and its newly acquired analytics and forecasting advisory firm, Property Portfolio and Research Inc. (PPR), which were among the first forecasts to be released. The office vacancy rate stood at 13% at the end of the third quarter, and CoStar forecasts several more quarters of negative absorption and another 300-basis-point increase in the vacancy rate to 16% as the office market trails what's shaping up to be a "jobless recovery." Strong demand for office space is not expected to return until 2011-12, but when it does recovery should be robust, with the national office vacancy rate expected to fall to 10.5% by 2014 if job numbers begin to pick up as expected, according to CoStar and PPR projections.

Looking ahead, CoStar forecasts that the national industrial vacancy rate will rise from 10.2% in the third quarter to as high at 11% next year, but the amount of negative net absorption -- which approached nearly 150 million square feet year to date through the end of the third quarter -- should taper off over the next couple of quarters. The industrial market will slowly resume leasing activity starting in mid-2010, generating reasonably strong positive quarterly absorption through 2013. Rents, however, likely will remain moribund for two or three more years.

Coming off an idle 2009, the next year will likely rank as the slowest year of the modern era for new development, according to projections covering US market conditions presented by CoStar in a series of webinars last month.

A record 900 people participated in this year's Emerging Trends in Real Estate 2010 survey by PricewaterhouseCoopers and ULI. The results won't do much to either comfort the pessimists or encourage the optimists.

Across the board, investor sentiment was at or near record lows. Survey respondents predicted that vacancies will rise and rents will fall in all property types before the market hits bottom next year. Only apartments rated as a "fair" prospect, with all others sinking into the fair to poor range, with respondents especially bearish on retail and hotels. Development prospects ranged from "dead" and "abysmal" to "modestly poor."

"Not surprisingly, the overwhelming sentiment of Emerging Trends interviewees remains decidedly negative, colored by impending doom and distress over prospects for an extended period of anemic demand and costly deleveraging," the report said.

On the other hand, value declines of 40% to 50% off 2007 peaks will present once-in-a-generation opportunities, respondents said. "A sense of nervous euphoria is growing among liquid investors who can make all-cash purchases” from distressed sellers and banks, said ULI Senior Resident Fellow for Real Estate Finance Stephen Blank.

Debt markets will begin to recover, but loans will be conservative, expensive, and extended only to a lender's best customers. REITs and private equity funds will get into the action, providing loans to battered borrowers at a steep price.

The survey finds near-record lows in investment sentiment in every property type. Only apartments registered fair prospects with all other categories sinking into the fair to poor range. Hotel and retail record the most precipitous falls. Development prospects are “largely dead” and drop to new depths and practically to “abysmal” levels for office, retail and hotels. Warehouse and apartments scored only marginally better at “modestly poor.”

READ THE REST OF THE ARTICLE HERE

Leased Another One!

I leased this office in Lakewood Ranch to an accountant in a short three weeks after I took the listing. The price was great and the tenant loved the space. It came fully furnished with desks, chairs and even a kitchen sink...the tenant is here for three years. Congratulations to the tenant: Cozzette Accounting Co., LLC! No outside broker was involved with the deal.

Leased Another One, #3 out of 3 for the Week!

We would like to welcome national tenant Kumon Learning Centers to their new home at Tourist Center Drive in University Park. Kumon signed a 5 year deal last Wednesday for their new home. Kumon, based out of Teaneck, NJ is actually expanding in this market. They have over 1,500 locations in 44 countries. I appreciate the business, guys. Thank you!

Leased Another One, #2 out of 3 for the Week!

We want to welcome Dish Network and DirecTV affiliates Rising Star Communications to their new home at 2436 Stickney Point Rd in Sarasota. This lease wraps up this strip center for me seeing that it's now 100% leased. I took this over from another agent in the spring where several spaces had been vacant for a very long time. I gave the landlord an analysis of what needed to be done to make the center more attractive to tenants and we were able to lease the center up with a little bit of effort and some creative marketing. Glad to be able to help. Again, motivated landlord + motivated tenant means another leased space! This is lease #3 for the week!

No recession here. No way!

Leased Another One

We want to welcome Starr Title Insurance to their new home at 100 Wallace Avenue, Suite 250. Starr has signed a 3 year lease with the landlord. We wish them all the best. The location is excellent, almost directly across the street from the Sarasota courthouse.

Took a little less than six months to find a tenant. Not bad, considering the climate. Aggressive marketing + motivated landlord + motivated tenant = another deal in an ailing economy!

More Bad News

Yeah, yeah...we know, we know.

Leased Another One - 6,400 SF to National Tenant

Boulder, CO-based Camp Bow Wow (CBW) finally moved into their new digs: a 6,400 sf air-conditioned ILW-zoned property fronting 17th Street. ILW was the only favorable zoning that could accept a dog-daycare facility without a special exception.

CBW sunk nearly $150,000 worth of capital improvements into the landlord's building. We wish them and the landlord all the best! I was glad to help them.

Local Company Absorbs 50,000 Square Feet

See? All's not totally dead around here. There are at least some bright spots here and there.

Firm rents more warehouse space on McIntosh Road

By Michael Braga

Published: Monday, August 17, 2009 at 1:00 a.m.

In the midst of the toughest market conditions that anyone can remember, the Meridian Development Group has pulled off a coup.

The Clearwater company, which owns and manages a giant, 910,000-square-foot warehouse complex on McIntosh road in Sarasota County, has convinced a local bandage manufacturer to sign up for 50,000 square feet.

ASO Corp., the subsidiary of a Japanese corporation that has made adhesive bandages and other wound care products in Florida for 25 years, is one of those rare companies with the ability to expand in the middle of a recession.

"This is an expansion," said Steven Kossoff, Meridian's managing director. "In Sarasota, there were only two facilities that were large enough to meet their needs."

ASO's choice came down to price and amenities, Kossoff said.

"We have a fully fenced facility with 24-hour guard service and high ceilings that allow for more stacking," Kossoff said.

When pressed for details about price, Kossoff would only say that the lease rate was lower than the $5.50 per square foot the company had been asking in the past.

"It was lower than we've historically seen, but it was not too terrible," Kossoff said, especially in market conditions in which warehouse owners are getting clobbered.

Calls to ASO's headquarters in the Sarasota International Trade Center were not returned.

LINK TO ARTICLE

Leased Another One

Congrats are due to Jobs, Etc for taking on 3,500sf of space at 5755 N Washington for their summer vocational and training program. The building just happened to be a perfect fit. I still have another 4,000 or so feet left in this building. Just goes to show that multifaceted marketing and having an aggressive landlord will do wonders in this kind of market. Judging by the number or properties I'm showing as of late, leasing activity is not totally dead.

Tampa Industrial Vacancy Up

The latest report from Cushman Wakefield shows a noticeable gain in industrial vacancies the Tampa Bay area. Some eye-popping numbers: the area market shed almost 54,000 jobs, nine consecutive quarters of vacancy increases and six consecutive quarters of declining rents. Link to the article and FREJ is below.

TAMPA - The Tampa industrial market continued to weaken in the second quarter of 2009 primarily due to the decrease in industrial-related jobs and the sustained deficit of demand from tenants in the market looking to lease or buy space.

Since mid-year 2008, the Tampa Bay market lost a total of 53,900 positions, with the construction industry losing 13,800 positions, manufacturing employment decreasing by 6,800 jobs and trade, transportation and utilities losing 2,700 jobs. The negative job growth, coupled with the current economic slowdown has resulted in a continued lack of new and expansion leasing activity, increased vacancy and a decline in rental rates during the quarter.

Additionally, sales activity has been nearly non-existent due to the dip in prices buyers are currently willing to pay and their difficulty to obtain financing.

At the close of the second quarter, Tampa’s industrial market fundamentals continued to grow weaker, following the trend which began over a year and a half ago when the national and local economy both took negative turns.

For the ninth quarter in a row, overall vacancy throughout the market increased. The marketwide overall vacancy rate of 9.5% at the close of the second quarter of 2009 increased a full percentage point from the initial quarter of 2009 and increased an astounding 3.4% from the vacancy documented at mid-year 2008.

As can be anticipated with such a significant increase in vacancy throughout the market, overall absorption posted negative 623,026sf over the past three months, bringing the year-to-date total to negative 943,309sf. Although the current negative absorption total appears dramatic, when compared to the year-to-date total recorded this time last year, year-to-date 2009’s negative absorption increased just 107,207sf or 11.5%.

The feeble tenant demand currently being experienced in the market has resulted in a decrease in asking rents for the sixth straight quarter, bringing average asking net rental rates down to levels that haven’t been recorded in the market since the first quarter of 2006.

Marketwide, the direct net asking rental rate averaged $5.95 psf at quarter-end, a decrease of $0.41 psf since last quarter and $1.10 psf from this time last year. Warehouse/distribution space, which accounts for 70.4% of the industrial space in the Tampa market, experienced the largest decrease in asking rents, declining $0.44 psf since last quarter and a much more substantial $1.09 psf since this time last year to an average of $4.89 psf by the end of the second quarter of 2009.

Forecast

Clearly, this economic downturn has lasted much longer than originally anticipated. While much of the fallout in the industrial market can be traced to companies tied to the construction and manufacturing sectors, Cushman & Wakefield believes that the fallout from these segments is largely, if not almost completely, behind us.

Though the effects of the prolonged slump in the economy will continue to have a negative impact on the market well into 2010, current industrial market fundamentals are definitely favoring tenants in the market. Competition between landlords will continue to drive down asking rents and increase lease concessions, decreasing the tenant’s effective rental rate costs over the term of their lease.

Article Link

How bad is it? Just look.

I recently conducted a ride-along interview...the subject was industrial vacancy. Good commercial brokers should always know what kind of inventory is available in their market and, even though I'm still fairly young and have a pretty good memory, even I was overwhelmed by the sheer number of buildings for sale or lease. The interview below was conducted in an approximate one mile radius of the Whitfield/US301 intersection. Expand this area to the entire Manatee/Sarasota MSA and you can imagine it's nearly impossible to remember every single available building and price. A good portion of this inventory isn't even online anywhere.

Selling or leasing industrial property is truly a huge challenge for all agents and owners. This video underscores those challenges.