Full Review of the Commercial Real Estate in Southwest Florida
The commercial housing market in SW Florida is more desirable than any other real estate in the country. Real estate data trends in the region suggest that the main contributors to this enviable position include the availability of vast lands for future constructions, lower tax rates for doing business, new road constructions, and a growing population.
Commercial real estate market reports predict that the growing rent prices, vacancies, and absorption rates will make this market segment more resilient in 2021.
According to these reports, the industrial warehouse market ranks as the healthiest sector due to the increasing number of online shoppers and new home developments. The retail segment is ranked second.
Here is a quick market breakdown for the commercial real estate market in SW Florida.
A rise in rent prices for the industrial space
Logistic companies dealing with retail and homebuilding affairs scarfed up warehouse spaces in SW Florida, lowering the local vacancy rate to 3.6% and increasing costs for new constructions.
Real estate analysts in the region claim that this new trend will potentially hike industrial rents. Market forecasts for this segment estimate that rent prices for industrial spaces in SW Florida will increase by a 15% to 20% margin for the next five years.
Despite the tight vacancy rates, supply still seems to be balancing well with the demand for these spaces. This trend projects that the industrial market will continue expanding steadily for the next ten years.
SW Florida was one of the top destinations for people moving from the highly congested and costly cities in the country. These movements mean that the region is experiencing a surge in population.
Housing markets throughout Southwest Florida are still experiencing staggering inventories due to a short supply of new listings. This deficiency coupled with economic downturns due to the pandemic resulted in the escalation of home prices.
As the most preferred home type in SW Florida, prices for a single-family home increased to a level that’s no longer affordable to many. This trend means that the region has an increasing number of renters than before.
Reports indicate that places such as Lee County get a monthly average of 2,000 newcomers, and nearly 20% of the new residents are renters. Areas such as Colonial Boulevard and Fort Myers have a significant number of new apartments under construction, which means that SW Florida will have continued strong demand into the second half of 2021.
Real estate analysts and economists are keenly following trends in the current job markets, especially in the service industry. Any slight change in the job market can directly affect the affordability level of resident workers.
Office spaces and corporate relocations
As the world embraces the work-from-anywhere technology, many corporate firms and companies are now shifting towards low-tax regions such as SW Florida. As these businesses continue to move their physical addresses, the region’s commercial real estate market will continue booming than most similar neighborhoods in the nation.
Other than low taxes, other reasons why SW Florida is a top destination for corporate relocations include lower office lease rates, higher availability of class A block spaces, and very little congestion.
From a corporate’s point of view, this is an excellent opportunity for struggling companies to save more and survive the recession. Since none of these companies will relocate back to the busy and congested cities, the distribution of the COVID-19 vaccine is an indication that the commercial real estate market in SW Florida will have fewer office sublease spaces for the rest of 2021.
Fewer retail vacancies
Unlike the struggling shopping centers in the country, the retail market in SW Florida is relatively more resilient and has a lower vacancy rate of 3.6%.
As the ravaging pandemic continues to plummet everyday store traffic, social outings, and casual eat-outs at restaurants, SW Florida’s tenants are more optimistic that this will improve later in the year.
The winter tourism season in SW Florida had a considerable increase in highway traffic, suggesting that things might return to normal later this year. Based on such assumptions, commercial real estate market forecasts project that vacancies and rent for retail space will remain stable until June.
Future estimates continue to suggest that consumer confidence will increase by early July, only if the COVID-19 vaccine plays out well.
Even though the commercial real estate market will improve this year, it’s important to note that real estate costs are cyclical and depend on numerous factors. Top-rated real estate companies such as Woodruff property managers can help you identify and assess how specific variables can potentially affect both property values and availability. Call or email us now to learn more about the commercial real estate market in SW Florida.
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