Great news folks ? we?ve had another positive quarter of results in the office and retail leasing sectors. Our commercial real estate market has been working its way toward a recovery for the third straight quarter.?
An additional 18,350 SF of office and an additional 3,635 SF of retail have been positively absorbed in our market.? Together that is 21,985 SF of space that has been chopped away leaving the total available office and retail space at 1,571,149 SF?representing a modest 1.38% reduction.? The number of listings in the office sector decreased by a solid 4.87%, and while the number of listings in retail increased only slightly by 3 total listings, the overall square footage decreased.? These numbers are impressive when viewed in the context of the last four years.
Gainesville Outlook
We estimate that over 80% of the deals being done in commercial real estate are leasing and over 80% of those deals are office leases.? Sales are happening, but the availability of capital still makes leasing the preferred action.? Office leasing is inmost common?because of the improved employment locally and the all time low, yet stable, leasing rates.
The typical office deal is a very attractive, very clean, move-in ready space between 1,000-3,000 SF and closing at about $12-13/SF gross and are almost all located in the Northwest.?? As we pointed out last quarter, leasing will continue to be strong, rental rates will remain flat through 2012, and vacancies will?show a modest drop in office and a slow drop in retail.
National Outlook
The office sector is improving mirroring our local uptick.? Vacancies are expected to drop by 1.0% in 2012 and another half a?percent in 2013.? Rates are expected to increase 1.7% in 2012 and 2.4% in 2013. The office market is?showing improvement because of the improved employment rate.? The retail sector continues to struggle because of suppressed consumer spending and some experts think vacancies won?t improve much in 2012, but will show small signs of improvement in 2013.
According to UF Bergstrom Center?s Survey of Emerging Market Conditions,?the experts??overall sentiment in commercial real estate has hit a five year high.??The outlook for occupancy,?rents, and investment property are improved, cap rates and yields are expected to remain stable, and most of the respondents felt like the availability of capital will only continue to improve.
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