Sunday, January 13, 2008

Commercial real estate caught in slowdown

Katy Bishop writes:

In 2005, developers built shopping centers and the tenants came knocking.

But now, Southwest Florida’s robust commercial real estate market is slowing. Retail and office vacancies are increasing and rents are decreasing.

Commercial properties are valued largely on how much income they produce, so property values are affected, according to about a dozen Collier and Lee Realtors, developers and property appraisers interviewed for this story.

Commercial real estate shadowed residential real estate on the way up, and developers built shopping centers to catch up to the area’s population boom.

But some of that population growth indicated by new home construction turned out to be speculative, and the residents – and business customers – never came.

Commercial projects that opened in 2007, and those slated for 2008, were planned two to three years ago when the residential market was booming and it was hard to find a commercial space empty.

Now that the residential market has slowed, commercial property owners face a more challenging rental market because tenants have many more options.

No comments: