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Manatee-Sarasota
Business Observer Monday, Jan. 3, 2011 10 years ago

Still Grim

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The 2011 real estate market will be no place for the weak-hearted. Opportunities could be scarce.
by: Mark Gordon Managing Editor

INDUSTRY OUTLOOK: REAL ESTATE

Commercial real estate brokers on the Gulf Coast have searched for reasons to be positive about a new year since 2009 with little success.


More frustration is on the menu for 2011.


“We just see a ho-hum year,” says Gary Tasman, a broker with Commercial Property Southwest Florida, a Cushman and Wakefield alliance member. “There might be a slight increase.”


Andrew Wright, CEO of Tampa-based Franklin Street Financial Partners, has a similar view. Wright, like many others in the industry, looks into the future and sees a glut of foreclosures and distressed properties that block any hint of sunlight.


“There is still no way around the de-leveling process Florida is going through,” says Wright. “It has been painful coming down and will continue to be.”


In the Sarasota-Manatee market, however, the light of optimism shines a little brighter for some. Ian Black, a longtime commercial real estate broker in town, points out he's so positive about 2011 he wrote a Dec. 4 blog entry on just that topic.


“After a mid-term lull in activity there is a whiff of optimism in the air from all sectors of the business community,” writes Black, who goes on to mention some of the positive elements of a recent conversation he had with Economic Development Corp. of Sarasota County officials. “From my little 'bully pulpit' things are looking better than they did this time a year ago.”


Still, even Black's optimism has a caveat: He says 2010 might look better than it really was based on 2009, which many brokers consider one of the worst years ever. Black's firm did at least grow in 2010, both in gross fees and agents.


Moreover, Black says the first two weeks of 2011 could be a watershed mark for the firm, when he expects two multimillion-dollar sales will close. He calls the acquisitions substantial and investor-driven, but declined to talk specifics out of fear he would jinx the deals.


“No one has considered sales like this for a year or 18 months,” says Black.


Tasman also says his firm could close on a few big deals early next year — the type of sales rarely seen in 2009 and most of 2010. Despite his overall prognostication of a so-so year, Tasman says he's hopeful “there will be a return of entrepreneurial risk to our community.”


Wright's not so sure that will be a Gulf Coast-wide trend next year, especially given all the hurdles, from the economy to the lack of credit in the marketplace. Instead, Wright says he will bank on the long-term prospects of the Sunshine State.


“Florida will be at the top of the list when people look to get things started again,” says Wright. “It's a little more exciting here than in Detroit or Cleveland.”


Several commercial brokers, including Wright and Tasman, also agree on another oft-reported potential trend for 2011: Multifamily properties will see good, or at least, decent times. Not so much for office, industrial and a large portion of the retail sector.


The residential real estate market on the Gulf Coast, meanwhile, will have a slew of issues to deal with in 2011.


For starters, a mid-December report from real estate research and data firm CoreLogic says Florida is a national leader in home value depreciation. The statewide drop between October 2009 and this past October was 8%, according to the report, which put Florida behind only Idaho, Alabama, Oregon and Arizona.


Greg Owens, a listing specialist with Keller Williams On the Water in Manatee County, says a value depreciation problem is just one of several issues the market needs to work through. Foreclosures and short sales also rank high on that list.


Owens, like his brethren in commercial real estate, says his firm will seek opportunities on a case-by-case basis in 2011. Keller Williams On the Water will do that partially by opening new offices, possibly one in Sarasota.


Other residential real estate firms will look to find opportunities through consolidation. One of the bigger ones in that regard occurred in November, when Naples-based Premier Properties of Southwest Florida announced a partnership with Sarasota-based Signature Sotheby's International Realty. The combined entity will cover markets from north Manatee County through Collier County.


Few hold out hope that opportunities will come fast and furious.


“It took years to build the boom and it will take years to recover,” says Owens. “It's not going to happen next month or even next year.”

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