Although there has been a tremendous change in the South Florida real estate market over the last couple of years, many of our readers may not realize that commercial real estate has been playing catch-up to the residential market. For years office buildings, warehouses and retail space have been fairly cheap to come by, with many areas simply sitting empty for long stretches of time. However, according to a recent report, the commercial property market appears to be bouncing back.
But there doesn’t appear to be a need for a victory parade in this sector of the market just yet. Recent reports of a turnaround in the commercial market appear to be based mostly on what real estate agents, tenants and landlords are seeing in everyday transactions. The actual data shows little to no change in at least two South Florida counties.
In Broward County, the commercial vacancy rate was at 16.7 percent in the second quarter of this year, which was a slight decrease from 2012. Palm Beach County, however, showed no change in the vacancy rate.
Nonetheless, optimism abounds. The key may be that landlords and commercial property owners believe that the wave of layoffs and closings that spread through America during the worst of the economic downturn is definitely over. Just having companies stay in place and renew leases is viewed as a victory, and when businesses are looking for commercial space landlords no longer feel compelled to offer cut-rate monthly rent quotes. For those companies looking to actually buy instead of rent, prices in the South Florida area may be quite a bit more competitive than they have been in recent years as the surge in the residential real estate sector makes the area more attractive to all types of businesses.
Source: Sun Sentinel, “Commercial real estate market recovering,” Paul Owers, Aug. 2, 2013