Our roundtable discussion of suburban Florida markets starts with a pithy quote: "Fortunately, our centers are not in Florida."
That hurts. Florida has been in pain for a while. The bursting of the housing bubble has hit hard and the state entered into a recession in advance of the rest of the country. There is lots of vacant commercial and residential real estate up and down the entire state. So had bad is it really?
A walk through some recent Marcus & Millichap market reports gives us some results to chew on. Here are stats from five Florida markets--Tampa, Orlando, Miami-Dade County, Palm Beach County and Broward County--showing vacancy and rental trends by sub-market. The numbers show declines across the board, but the pace of declines is slowing in some markets. For example, in Orlando the vacancy rate is expected to end 2009 at 10.4 percent. That's 200 basis points above where it ended 2008, which is greater than 250 basis point jump between 2007 and 2008. In Broward County, the firm is projecting the vacancy rate to end 2009 at 11.3 percent. That marks a 170 basis point rise from 2008, which is half the 340 basis point increase from 2007 to 2008.
In other markets, however, 2009 is looking rougher than 2008. In Tampa, Marcus & Millichap expects the vacancy rate to end the year at 10.3 percent--a 250 basis point jump from 2007. Between 2007 and 2008 the vacancy rate rose just 140 basis points. In Palm Beach County, the vacancy rate is expected to hit 10.7 percent, up 270 basis points from 2008. The year prior, the vacancy rate rose 250 basis points. Lastly, in Miami-Dade County, the vacancy rate is predicted to reach 8.5 percent by the end of the year. That's a 180 basis point increase from 2008 on top of a 160 basis point increase in the previous 12 months.
You can view larger versions of the charts by clicking on the images.