COMMERCIAL REAL ESTATE OUTLOOK by Deedee Davis, Owner/Broker Nai Pensacola Commercial Real Estate
2019 was one of the best years we have seen in commercial real estate in a long time. But, 2019 is history and what can we expect from 2020? All indicators point to much of the same. One of the reasons is that our market here in Northwest Florida is different from the national and even the state scene. We do not experience the extreme peaks and valleys, other than recession driven conditions, that most of the country does. And with the leveling factor of our region, we can look to stretch out a very good run. Most of the country felt a bit of tapering off in the 4th quarter, but here in Northwest Florida, we had the busiest year end for sales and for leasing that we have seen in recent years. A lot of this was because of 1031 money that had to be placed—all very typical of a strong economy. We currently have an abundance of investors hungry for income producing properties, but an inventory that has been nearly depleted. Apartment complexes and shopping centers remain a hot ticket, and industrial is coming back strong. Industrial is positioned to be the fastest growing sector of the 2020 market as online retail continues to expand. Distribution centers are in big demand and not just Amazon-sized centers. Plenty of people are starting businesses out of their homes but need climate44 | Business Climate | 2020 / 2021 Annual Real Estate
controlled storage and shipping areas. Prices have increased significantly for such properties. Downtown Pensacola continues to prosper, but there is an abundance now of available office space. Small suites from 1500-3000 square feet, however, remain in demand. The Imperium, a newly completed project at 120 West Government Street, promises to expand the prosperity of Palafox Street. Steve and Paul Grimes have transformed this parking lot into a state of the art live/ work building. Downstairs houses three small retail/office spaces while the upstairs includes three spacious, beautiful residential units. One residential unit has closed and the others are all currently available. This is the first new downtown development since the completion of the Southtowne project. Look for more new construction on Garden Street as the former School Board administrative building gets a new look and the corner space where Property Appraiser Chris Jones had his office become a new, exciting food venue. Old buildings that have been repurposed into offices are another great option. The Seville Historic District frequently has openings in such buildings. Most seasoned real estate brokers have relationships with owners
