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RAY SANDELLI
CRE CONSULTANTS, FORT MYERS/NAPLES
The reality is that today we both live and operate in world that interconnects our personal and business lives in almost everything we do. We are constantly “plugged in” and so information is almost instantaneous and feedback, opinions and reactions swift. So are we in fact better informed or are there now more questions than answers...or is there in fact ... “an answer?”
The result is that there is perhaps no one event, world or domestic, and discounting the unthinkable that will most impact commercial real estate along Florida's Gulf Coast. Every day there's an inter play of factors that must be accounted for in the attempt to make responsible decisions.
Like any marketplace, Southwest Florida is not immune to changes in the political or economic platform of the world community. Technology is driving innovation at a pace that forces us to think differently and continually reinvent how we develop and use commercial space. Financial markets are interconnected, and government oversight, while in most cases well intended, too often creates ever-increasing obstacles to operating efficiency in many supply-restrained markets.
One common factor, however, is uncertainty, which challenges confidence among property owners, tenants and investors. Can we make the long-term decisions required of commercial real estate in the midst of ever changing and increasingly fast-paced sets of influences? For those who can, they will be at the forefront of shaping not only the industry but also the future of the Gulf Coast.
Ours is a resilient industry that has — for the most part — proven itself capable in the midst of challenge, and we will continue to do so.
DR. MARK KAUFFMAN
PHYSICIAN AND DEVELOPER, SARASOTA
Commercial real estate in Sarasota is extremely stable. It could withstand another significant financial turndown and would hold its value and bounce back. It could withstand a major hurricane. It would take time to recover, but real estate ultimately would return for the better. Even a significant war in the Mideast or involving Russia, though it would inflict economic damage, would not prevent the market here from rebounding.
I think the single most devastating, long-term chronic damage that could occur to the market would be if Florida's Gulf Coast were to experience an outbreak of a grave and highly contagious disease similar to Ebola — one that was untreatable, uncontainable, with devastating sequella. The fear, panic and terror from such an outbreak that would be generated would be long lasting and difficult to eradicate from public consciousness for many years — a generation or more. This area would be shunned and avoided far into the future as a
result, and the consequences to the region's commercial real estate industry would be palpably obvious.
JOHN HARSHMAN
HARSHMAN & CO. INC., SARASOTA
As we've witnessed for the past 20 years or so, national and international events both impact commercial real estate along Florida's Gulf Coast. The tech stock run up of the late 1990s ushered in new highs in commercial rental rates, encouraging new development.
The terror attacks of 9/11 hurt commercial real estate both locally and nationally. While strong recovery occurred — boosted by low interest rates — the immediate reaction slowed action in the marketplace. Most recently, the international banking crisis and economic recession that began in 2008 devastated real estate. While residential real estate was hit the hardest, commercial vacancies soared and property values plummeted.
Today, the ever-growing threat of terrorism — most recently felt in the horrible attack on the nightclub in Orlando — is an internationally frightening phenomenon. That said, terrorism has had a relatively minor impact overall on business and commercial real estate, and there would be a resoundingly positive impact on all business, and by extension commercial real estate, if major success occurred in combating terrorism and relieved the concern of future attacks. It's also important to consider that funding sources drive markets. Changes in the availability of funds, together with stepped-up inflation, would have a significant impact on commercial real estate markets regionally and beyond.
BRENT MILLER
JLL, TAMPA
Factoring in the likelihood of occurrence, I would say hurricanes remain a substantial concern for property owners and corporations along the Gulf Coast. Property managers and most large corporations in Florida must have emergency plans prepared specifically for hurricanes, as the path of destruction could potentially reach much farther than a single isolated incident — and all economic components can be affected.
Rebuilding from such an event goes far beyond brick-and-mortar properties, too. Hurricane Sandy, for instance, ended up costing the state of New Jersey $65 billion in total damages, and it will take years to recuperate that cost. For property owners teamed up with property management firms, their ability to recover from events like that is amplified by the knowledge possessed by their real estate partner. Tenants, meanwhile, can increase their capacity for business continuity by developing a strategic plan that focuses on agility in the face of such situations.
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