The Consistent Climb toward Recovery
Many companies believe that winning government work is too complicated, too competitive and not worth the return. While there is a degree of skill in becoming an approved government vendor, many of these other concerns (myths, really) can be easily overcome through education and by taking advantage of community resources.
Earlier this year, I attended the Society of Industrial and Office Realtors (SIOR) Florida Chapter meeting in Orlando with 50 other SIORs from around the state. This is a select group of commercial real estate brokers who meet periodically to network, share ideas and work together on property/client requirements.
This was my first meeting since earning the SIOR designation, so I spent much of the time getting to know the other members from around the state. Part of every introductory discussion was, “Where are you based?” When I responded East Central Florida, they would typically say something to the effect of, “You guys are having a tough time these days with all of the space shuttle layoffs.”
Putting on my Economic Development Commission/Chamber of Commerce hat, I would immediately respond with “We are actually doing very well and have recovered over half of the jobs lost in those layoffs.” I then would talk about all of the exciting things taking place in our area, such as the success of Port Canaveral and its expansion plans, the addition of international aircraft manufacturer Embraer, the ongoing projects at the Naval Ordnance Test Unit and Patrick Air Force Base, the progress with commercial space launches and, last but not least, our quality of life.
They were always surprised by my comments, but in a positive way, and I, too, found myself very encouraged as I reiterated my belief in our economy and the improving prospects for commercial real estate in our area.
Climbing Toward Recovery
We continue our recovery from the commercial real estate downturn – which hit bottom in 2012 – as many of the financial institutions were successful in disposing of the majority of troubled assets in their portfolios. This enabled our markets to begin a slow climb in a positive direction for 2013.
This trend continues today as evidenced by the results reported in the Brevard Market Overview, published quarterly by Tuttle, Armfield & Wagner Appraisals/Research and my firm, Lightle Beckner Robison Commercial Real Estate Services. This report is a product of local in-house researchers and has been kept current for 22 consecutive quarters.
Occupancy levels in the first and second quarters of 2013 increased over fourth quarter 2012 and are beginning to show signs of a stabilizing trend in a positive direction. We are not speaking of large movements in occupancy gains; however, increases from 1 percent to 5 percent are certainly heading in the right direction.
During the most recent downturn, our commercial markets did not suffer from over-building to levels of the past or what the residential markets had experienced. With a relatively limited supply of commercial space, every gain in occupancy creates a positive result as rental rates are no longer falling. In some cases and areas, rates have not only stabilized but are beginning to rise again.
Where Are the Hot Spots?
We continue to see pockets of market improvement – the Viera area continues to be a hotspot for retail and is enjoying new additions such as Chipotle, Bonefish Grill, Pollo Tropical and Total Wine — with more on the way. Hammock Landing in West Melbourne/Palm Bay is seeing improved absorption of inline retail space and has broken ground for a new movie theatre. The addition of Bass Pro Shops in Palm Bay will certainly increase retail traffic and draw other retailers to the area.
Another factor that will help this upward trend in our commercial real estate market is that lenders are active with most looking to make new loans. Owner-occupied properties are the most desirable from the lending standpoint but funds do exist for sound investment opportunities. Even with the slight increase we have seen so far this year, rates are historically low and still attractive in most cases.
While we may not be setting any speed records on our way back to the top, most of the trends affecting commercial real estate are making positive gains, a trajectory we believe will continue.
We are blessed to live in such a unique area with both quality of life and a strong economic/high-tech base. The future for East Central Florida and Brevard County is very bright. Onward, upward, higher and higher!
Brian Lightle, CCIM, SIOR, is broker/president of Lightle Beckner Robison, Inc., an Investor of the Economic Development Commission of Florida’s Space Coast.