Lay of the land: a mixed view
By JAMES THORNER
Published November 21, 2006
Homes sales are hobbling. But block-and-stucco suburbs and condo towers aren’t the whole real estate story in the Tampa Bay area. If you’ve noticed full parking lots at Wal-Mart Supercenters and Target stores, you can see retail development is hopping. The office market isn’t doing so shabby either. Top-notch buildings are drawing rents of $30 per square foot. Industrial real estate, which includes warehouses and factories, has been fetching record prices. But signs could point to a slowdown. Times staff writer James Thorner asked a panel of prominent real estate prognosticators for their opinions of the real estate industry.
Craig Sher, president of the Sembler Co. in St. Petersburg, pointed to a sector in “great shape.” In Pinellas County, retail space is more than 95 percent occupied. Sher noted that only four of about 1,500 of his tenants, including those at downtown St. Petersburg’s BayWalk, are delinquent with payments. Fancier retailers dabble in the area — Louis Vuitton and Neiman Marcus at Tampa’s International Plaza — but the region remains a magnet for middle-of-the-road stores. “We’re a Wal-Mart and Target world in Tampa Bay,” Sher said. Land is so scarce in Pinellas that the future belongs to “knockdown” redevelopment.
Tampa’s Gary Harrod owns a portfolio of Pinellas County industrial and warehouse property, including the vacant former Eckerd headquarters in Largo. Harrod once tethered himself to a conservative strategy: Hold the property and collect the rent. But hungry buyers in the past 18 months have forced him to consider shedding property. Buyers have dropped money so eagerly they often don’t perform due diligence. Nevertheless, Harrod suspects a downturn looms: With the rise in the stock market, real estate will probably be less attractive. “I think there will be less and less money chasing our product.”
Raymond Sandelli, senior managing director at CB Richard Ellis in Tampa, said “trophy properties,” those well-equipped, newer buildings, continue to rent at a premium. A few in Tampa’s West Shore, along with places like Bank of America tower in downtown St. Petersburg, collect rents above $30 per square foot. Not everyone is thriving, though. Sandelli noted a slip in leases for Class B and C offices. They tend to be older buildings without the perks of newer construction. Downtown Tampa’s parking crunch is opening up opportunities for offices in newer markets. Anyone for Pasco County?