Published: Wednesday, May. 13, 2009

Updated: Wednesday, May. 13, 2009

Glut of commercial property stuns business owners

MANATEE — Ken Clanton has real estate signs throughout Manatee County.

The Wagner Realty agent has 32 commercial properties listed on the market, a significant number to chip away at in the current economy.

“I want fewer signs,” Clanton says. “I’d like to not have that many on the market.”

Empty commercial spaces are a common sight in Manatee and Sarasota counties. According to a market research report by Grubb & Ellis, retail vacancies in the Tampa Bay area grew from 6.1 percent in the fourth quarter of 2008 to 6.6 percent in the first quarter of 2009.

Manatee and Sarasota counties have a 6 percent retail vacancy rate. Manatee has 692,622 square feet of empty retail space, and Sarasota has 1,030,239 square feet that sitting empty.

As businesses fold or companies scale back on overhead costs, local Realtors face a challenging feat in trying to sell off the vacant retail and office inventory.

“There’s an abundance of inventory out there,” Clanton said. “There’s a tremendous amount of buildings for sale and for lease. That’s a huge challenge trying to take that inventory and move it below an acceptable level.”

To do that will take some creativity, more lending opportunities among banks and bridging the price gap between buyers and sellers, say local Realtors.

Ian Black, of Ian Black Real Estate in Sarasota, said one of the biggest things holding back some commercial purchases or leases is buyers demanding low prices.

“There’s been some unrealistic expectations by buyers,” Black said. “We’ve been having some difficulties in bridging the gap between buyers and sellers.”

Retail vacancy rates in the Tampa Bay area have been climbing since the first quarter of 2008 and is at the highest since the first quarter of 2007 when it was 5.7 percent, according to Grubb & Ellis.

Small business owners left behind in nearly vacant shopping plazas hope some mutual agreements come along quickly.

Wayne Hepburn, owner of The Frame Shop, has seen major retailers such as Sweetbay, Bealls Outlet and the Movie Gallery exit the Parkway Collection shopping plaza off North Lockwood Ridge Road.

The impact on The Frame Shop, Hepburn says, has been almost unbearable.

“Last summer I had to borrow money to stay open,” Hepburn said. “This summer I can’t do that again because I haven’t paid back what I borrowed last summer. I can’t be sure that I will be here when this season starts up again in October.”

Getting operational loans is often a deal breaker in selling commercial properties, he said.

“Everybody is concerned about am I going to get a loan if I need a loan,” Clanton said. “So far I don’t see the banks being very creative. I see them being stringent and they probably need to be because they loosened up lending priorities in the past and that’s why they’re in the trouble they’re in right now.”

As part of tighter lending measures, First Bank is taking into consideration whether the business has an existing relationship with its bank

While Fifth Third Bank says it is practicing prudent underwriting and looking at the ability to repay in an economy in which sales and profits are dropping.

Brad Lindberg, an associate with Hembree & Associates, says he works closely with the Sarasota Economic Development Council to promote the business community to those looking to relocate.

“I always draw on community,” Lindberg said. “There’s a real need for jobs here, with a great climate and affordability that’s returned.”

Office vacancies meanwhile have a higher rate in the Tampa Bay area than retail.

For the first quarter of 2009, the rate increased to 16.8 percent, from 15.8 percent in the fourth quarter of 2008. In Manatee County, the office vacancy rate is 13.2 percent with 256,833 square feet empty.

Mildred Moten-Golden, president of Moten Golden Insurance, is very familiar with that empty feeling surrounding her office. Her agency is one of two businesses that remain in a six-unit shopping plaza in the 2000 block of Manatee Avenue East.

“You don’t really want to be in a plaza by yourself, you need the traffic,” Moten-Golden said. “It’s not very comforting because a lot of times businesses tend to feed off each other. But I understand what the economy has been like for many businesses.”