Florida Commercial Real Estate Market Recovers Slowly But Surely In The Third Quarter Of 2012
Thursday, November 22 2012 @ 04:09 PM MSK
It has been quite a slow recovery for the Florida commercial real estate market ever since things started becoming sluggish in 2006. Nevertheless, people are still looking forward to the improvements to continue in the upcoming years.
In the third quarter of 2012, office vacancies had dropped but remained elevated to a certain degree. Regional and national retailers have been seen working on expansion projects, but small-businesses are still struggling to make it big within the region.
Meanwhile, office building owners are working hard at keeping their current tenants and bringing in new ones for future occupancy. However, owners are less inclined to offer concessions to tenants due to the fact that there remains to be a lot of uncertainty on the market.
In the Broward County area, the office vacancy rate was 14.3 percent in the third quarter of 2012 which marks a slight decrease from the 14.6 percent vacancy rate from the third quarter of 2011. In the Palm Beach County area, the vacancy rate fell from 19.5 percent in the third quarter of 2011 to 18.7 percent in the third quarter of 2012.
According to real estate experts, the ideal vacancy rate for a strong market should be in the 8 percent to 10 percent range.
Broward County area experienced a drop in office rental rates from $24.65 to $23.75 while the rates in Palm Beach County’s drop went from $26.00 to $25.75 in the third quarter of 2012.
A lot of businesses are hesitant about making long-term commitments on leases. Real estate developers have not been building new offices over the past couple of years due to the fact that there has not been much of a demand since the recession took place.
Most of the finance, legal, and technology companies that have been known to occupy a significant number of Florida commercial properties within prime areas of the region have been trying to save money by either downsizing or moving to other areas as soon as their lease contracts expire in other to cut down on their expenses.
As far as the retail sector of the commercial real estate market is concerned, vacancies are still a major issue for the Las Olas Riverfront development which is located along the New River within the city of Fort Lauderdale. Also, a lot of small-business owners who are looking for available opportunities are struggling with the fact that they have been unable to acquire bank loans for their businesses.
Despite all of the decreasing percentages, the region is still experiencing growth now that there are more Florida commercial real estate options that await many different types of businesses who will surely be needing options that will provide suitable offices, retails spaces, and other types of commercial properties within prime areas of the region.