Whether analyzing market statistics or speaking directly to those professionals “in the trenches” in the real estate industry, opinions of the state of our market vary — often substantially. Yet, regardless of what gauge one uses to assess the current state of our market, one thing is clear — we are on the upside of recovery. Both notable shifts in forward-looking indicators, and overall outlook from prudent real estate investors, point to very positive signs of improvement.
In Florida, and particularly here in Southwest Florida, the industrial sector of the commercial real estate market is leading the pack with newly released data showing a top-three placement for lowest industrial vacancy rates in the nation. According to a recent Cushman and Wakefield market statistical report, the Naples metro area ranked No. 2 in the nation for the lowest industrial vacancy rates with 4.2 percent overall vacancy. Moreover, Florida claimed three of the top 10 metro areas with the lowest industrial vacancy rates (Lakeland at No. 1, Naples at No. 2, and St. Petersburg/Clearwater at No. 7). Lee County ranked 38th on the list with a 9.3 percent vacancy rate — slightly higher than the national average of 8.7 percent vacancy.
Housing market improvements
Improvements in the housing market are widely considered a contributing factor to positive developments in the industrial sector of commercial real estate, not unlike the correlation recognized between growth in employment and positive gains in the office sector. Both nationally and statewide, prices and home sales increased year over year in August. According to the National Association of Realtors, existing home sales jumped 7.8 percent in August to the highest level in more than two years — the highest level since May of 2010 when sales were fueled by a federal home-buying tax credit.
While many argue that Southwest Florida lags both the nation and the state with respect to spikes in housing figures, a direct comparison does not always reveal the entire picture. It is true similar spikes were not prevalent in Southwest Florida’s data, yet, when placed in proper context factoring in dwindling inventory numbers and the area’s position in the recovery cycle, important strides were unquestionably made in our local market.