2010 Global Market Report - NAI Commercial Real Estate

Palm Beach County, FloridaTampa Bay, FloridaContactNAI Merin HunterCodman, Inc.+1 561 471 8000Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income1,249,3921,208,909509,853$81,995The local economy continues to be impacted by negativeemployment trends. The single-family residential market hasbottomed while the condominium market has further to fall.The investment sale market in 2009 has been non-existentand too few transactions have occurred to predict whereprices will settle. A significant gap remains between bid andask as banks continue to be reluctant to foreclose on delinquentloans.The office market throughout the county is weak. Rentalrates are 15-25% below peak rates, with free rent and otherconcessions prevalent. The industrial vacancy rate for PalmBeach County has increased consistently from 8.9% in Q32008 to 12.5% in Q3 2009. Year to date net absorption isa negative 1,843,615 SF. The overall average rental ratedecreased to $7.44/SF with flex rates at $8.91/SF andwarehouse rates at $6.70/SF.Retail provides much of the same picture as the othermarkets. Boca Raton and Delray Beach have weathered thestorm best because of the density of population and strongdemographics. Discount tenants of all types have benefitedfrom the decreased rental rates and increased vacancy andhave used that as an opportunity to expand. The county ingeneral has seen retail rental rents retreat approximately20-30% from the 2006-2007 peak pricing. Along withprices losing ground, vacancy has increased to over 10%.New construction of speculative product in all property typesis at a virtual standstill and will remain there for at least thenext 12-15 months. The Northern Palm Beach office market,consistently a strong performer, suffers from the downturnin both residential real estate and financial services. TheSouth County office market has an overall vacancy of26.2%.The vacancy rates have been climbing steadily from 11.2%in Q4 2006. Overall absorption in South County, year to date,is negative 527,000 SF. West Palm Beach and its surroundingmarkets, mirror what is happening in the rest of the county.ContactNAI Tampa Bay+1 727 585 2070Metropolitan AreaEconomic Overview2009Population2014 EstimatedPopulationEmploymentPopulationHouseholdAverage Income2,771,8432,895,4841,277,414$64,708Service, retail finance, insurance and real estate are keydrivers of the Tampa Bay economy. Bio-science and other hightech industries are expanding, and the manufacturing base isgrowing as the regional economy continues to diversify.Having hit bottom in late 2008, the entire Tampa Baycommercial real estate market is rebounding at an acceleratedpace. Transaction volume has resumed to a morenormalized pace and activity levels increased during 2009.The Tampa Bay area investment apartment marketbottomed in Q1 2008, however the volume of transactionsis on the rise. REO bank foreclosures and troubled assetsare dominating the multi-family market with nearly 80% ofthe last 25 transactions closed having some sort of REOcomponent.Vacancy levels in the office market increased to 15%regionally. Sublease space continues to shadow the market.Concessions persist as the standard course of businessand tenants are looking at every space in the marketbefore committing. The sublease market is estimated at athree-year supply with the greatest amount of subleaseavailability concentrated in the suburban markets.The local industrial market suffers from an abundance offunctionally obsolescent product types with low ceilings andfixed interior components. New flex space in the I-4 corridoris the hot new market with several large facilities currentlyunder constructionThe retail market continues to be a challenging environmentbased on current economic trends. The market conditionshave stalled several new developments slated for 2009due to the credit crisis and lack of national retailer response.The new Cypress Creek Mall is currently slated for a 2011opening.The Tampa Bay investment market is a hotbed of opportunitywith values bottoming at nearly 50% of 2006 peak levels.Both institutional and local investor confidence and activityhave increased in 2009MedianHousehold Income$58,403MedianHousehold Income$47,986Total PopulationMedian Age43.2Total PopulationMedian Age41Palm Beach County At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICEPremium (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIALBulk WarehouseManufacturingHigh Tech/R&DRETAILDowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$$$$$$$$N/A19.009.0034.5022.0015.004.004.006.0017.5014.0020.00N/A$$$$$$$$$$N/A$37.5029.8539.2240.0042.009.509.5011.7550.0040.0035.00N/A$$$$$$$$$$$N/A30.0020.0536.7330.9025.036.706.708.9125.6326.5024.63N/AN/A22.7%19.3%59.4%19.0%24.4%11.7%10.5%15.4%20.0%18.5%17.5%N/ADEVELOPMENT LAND Low HighOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$N/AN/A305,000.00150,000.00400,000.00100,000.00$$$$N/AN/A525,000.00400,000.00900,000.00150,000.00Tampa Bay At A Glance(Rent/SF/YR) Low High Effective Avg. VacancyDOWNTOWN OFFICEPremium (AAA)Class A (Prime)Class B (Secondary)SUBURBAN OFFICENew Construction (AAA)Class A (Prime)Class B (Secondary)INDUSTRIAL$$$$$$25.0021.0010.0025.0021.0010.00$$$$$$35.0032.0018.0035.0032.0018.00$ 30.00$ 28.00$ 14.00$ 30.00$ 28.00$ 14.0030.0%15.0%15.0%30.0%15.0%15.0%Bulk WarehouseManufacturingHigh Tech/R&DRETAIL$$$4.504.504.50$$$6.507.509.50$$$5.255.506.5020.0%20.0%20.0%DowntownNeighborhood Service CentersCommunity Power CenterRegional Malls$$$$9.0012.0016.0024.00$$$$14.0020.0020.0045.00$ 12.00$ 15.00$ 18.00$ 35.0020.0%20.0%10.0%5.0%DEVELOPMENT LAND Low/Acre High/AcreOffice in CBDLand in Office ParksLand in Industrial ParksOffice/Industrial Land - Non-parkRetail/Commercial LandResidential$$$$$$50,000.0050,000.0040,000.0035,000.00125,000.0025,000.00$$$$$$150,000.00150,000.00125,000.0075,000.00500,000.00175,000.002010 Global Market Report ■ www.naiglobal.com 86