Bubble? What Bubble?

The vibe at a recent commercial real estate conference on the condition of markets from Tampa to Naples was upbeat and energetic, with dozens of slides to back it up.

“These were the most active six months we've had in the last seven years,” says Adam Palmer, managing director of the office division at Fort Myers-based LandQwest Commercial. Palmer's general area is Lee County, but he could have been talking about nearly every county on the Gulf Coast to a large extent. “It's been a very positive six months. Every submarket is better than it was in the previous six months or even 12 months.”

Yet while market rebounds and specific projects are seen in pockets from downtown Naples to central Pasco County, some unease looms. Palmer didn't specifically bring up the B-word in his presentation — bubble — but it's not far from the conversation, either. Palmer, instead, talked about the threat of a correction. If that happens, he predicts, it won't be like it was before, when the credit crunch prolonged the downturn.

Palmer's speech was one of several during the 2014 CCIM Mid-Year Market update held July 18 in Sarasota. Other highlights, broken down by geography, include:

Lee-Collier: A few parts of Naples, especially east and north, have outperformed the market, says Fred Kermani with CRE Consultants. Several projects in development in downtown Naples have generated buzz, says Kermani. Those include Naples Square, a luxury condo project at the corner of Fifth Avenue South and Goodlette-Frank Road, and a 186-room Hyatt hotel.

“Naples is a primary market,” says Mike Doyle, past president of the Southwest District of the Florida CCIM chapter, who moderated the event. “Rates are very high.”

Hot spots in Lee County, says Palmer, include the Hertz corporate headquarters and Florida Gulf Coast University. The Hertz complex is a $70 million project, and FCGU officials seek new space for an increase in student enrollment.

A good sign in retail, Palmer says, comes from Publix. The Lakeland-based grocer recently acquired some properties in the region. Says Palmer: “We are starting see Publix get a little more bullish on purchasing centers where it has a location.”

Charlotte-Sarasota-Manatee: The general feeling for the region mirrors what Palmer sees in Lee County: on the upswing. “Vacancy rates are starting to go back down,” says Coldwell Banker Commercial NRT broker Ron Struthers, especially in Sarasota County, “and rental rates are starting to come back up.”

Struthers focused mostly on Charlotte and Sarasota counties in his presentation. The retail vacancy rate in Sarasota is 6.5%, industrial is 6.2% and office is 11.5% — all low numbers based on past quarters. Land purchases, says Struthers, are also front and center for deals. He specifically cites the Mattamy Homes deal from May, when the homebuilder bought the 9,650-acre Thomas Ranch property in south Sarasota County for $86.25 million.

Retail is mostly in a holding pattern, says Struthers, while the $315 million mega mall under construction in north Sarasota County, The Mall at University Town Center, gets ready for its October opening.
That project is a partnership between Bloomfield Hills, Mich.-based Taubman Centers and University Park-based Benderson Development. Says Struthers: “What Benderson does affects the rest of the market.”

Tampa: Prominent Tampa land-use attorney Ron Weaver says several markets within Tampa are doing well, from office to industrial to retail. For example, more than 1.2 million square feet of industrial space was sold in the last six months, says Weaver, for a total of $48 million.

Weaver says other buzz-worthy projects include development possibilities in Channelside; the Trader Joe's that opened in Tampa in March; and the recent announcement that Studio Movie Grill, a Dallas-based chain that has first-run movies with a food menu and full bar, will open its first Florida location at the University Mall later this year. Says Weaver: “There have been some very positive indicators over the last six months in Tampa Bay.”

Follow Mark Gordon on Twitter @markigordon