MANATEE -- An increase in industrial real estate leasing and drops in vacancy during the second half of 2014 may indicate that next year will be a good one for the market segment in Manatee and Sarasota counties.
According to third-quarter statistics generated by Coldwell Banker Commercial NRT's Sarasota office, the amount of space filled by tenants and owners in the two counties jumped from earlier in the year with a combined 795,000 square feet coming off the market during July, August and September.
As space filled, lease rates edged up to $5.26 per square foot triple net in Manatee County as vacancies dropped three-tenths to 7.4 percent quarter over quarter. Sarasota County saw a bigger drop in vacancies, down to 5.5 percent from 6.2 the previous quarter. Lease rates held steady at $6.09 per square foot.
Janet Robinson, the Coldwell Banker's commercial director in Sarasota, said that activity plus an expected good fourth quarter puts the industrial real estate market in the best position it has been in since the economy collapsed in 2008. Even with 24 months of inventory remaining in the 51 million-square-foot, two-county industrial universe, she said she's optimistic.
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"Commercial is about 18 months behind residential, so we have about two years of inventory to lease up," she said.
Recent industrial deals of note in Manatee County have included last month's $900,000 sale of 17,000 square feet of industrial space near the Sarasota Bradenton International Airport to mosquito repellent company Matrix24 Laboratories. Luxury yacht maker Barker Boatworks also announced that it will lease 8,000 square feet in the new SRQ Commerce Center along U.S. 301 in southwest Manatee County.
The SRQ center, which is being built in phases, is one of a very few industrial properties in the two counties under construction. SRQ owner Benderson Development Co. was in the process
of leasing 248,000 square feet in the first phase of the development in early summer and is now building more space.
Larry Fineberg, executive director of industrial, office and warehouse space for University Park-based Benderson, said his company intends to bring another 189,000 square feet online in the near future.
Sales of industrial property are relatively brisk thanks to available financing and low interest rates. In Manatee County, industrial space sold for an average of $32 per square foot in the third quarter, while Sarasota industrial brought $38. Robinson said larger, high-ceilinged space generally went for a higher premium, but sales of less expensive flex industrial space kept the average low.
Sales are picking up for flex space, a type of real estate that can be used for industrial production, warehousing or offices.
"2015 is going to rock," Robinson said.
Both counties are in the midst of a lengthy run of good news for the industrial market. Sarasota County has notched five straight years of positive absorption of space on the market. Manatee County has a similar streak dating to the start of 2012.
Matt M. Johnson, Herald business reporter, can be reached at 941-745-7027, or on Twitter @MattAtBradenton.