Commercial Real Estate

Florida's industrial market is also in good shape. Sandelli notes that businesses are clamoring for well-situated warehouse and distribution space. "Everyone wants this product," he says. "In the Tampa market, more than 40% of the new product planned for 2007 is already precommitted."

Distribution companies have been seeking new facilities that provide them with greater operational efficiencies, such as higher truck bay ceilings. However, developers are finding it difficult to accommodate the market requirements due to limited land availability -- especially since many industrial tracts were rezoned for residential use in the past decade.

Strong population growth is a major driver for the state's retail market. National, regional and "mom-and-pop" retailers are snapping up spaces in new centers, and vacancy rates are generally in the 3% to 6% range.

Meanwhile, the owners of many older centers are giving their properties a face-lift in order to compete. However, higher tax and insurance premiums are cutting into the profit margins for both retail owners and their tenants.
"As the housing market has slowed, we're seeing fewer new strip malls opening," says Sandelli. "However, major malls and power centers are coming back, and the retail market is very stable right now."

Lewis M. Goodkin is president of Goodkin Consulting in Miami.

Tags: Housing/Construction