What’s Next, Ep. 21: 2021 Q1 Industrial Marketbeats

By Gary Tasman The Southwest Florida commercial real estate market is white-hot, and many property owners are hoping to take advantage of high values by selling their assets. While some buildings and land will be snapped up quickly by eager buyers, other properties are likely to languish on the market for months—or even longer—with little interest from potential investors. When a property is lingering on the market, it’s time for the broker and property owner to have a potentially uncomfortable conversation about the causes. Generally speaking, there are four reasons why your commercial property isn’t selling. It’s not priced to sell at market value. Properties can have many different “values.” Insurance value, estate value, tax value, and market value are all different and can vary significantly. A property’s market value, simply put, is the amount that a willing seller would accept, and a willing buyer would pay, given proper time and exposure. Market value is a moving target, changing based on the supply of properties on the market, economic conditions, the property’s features and benefits, and numerous other factors. A reliable broker uses local data and trends, combined with research and experience, to assess the market value of a property and position it to sell. People don’t know it’s for sale. Price and positioning are the two most important variables when it comes to selling a property. More than half the properties that don’t sell in any given market either aren’t priced or positioned correctly. If you’re priced at market value but your property isn’t moving, that means potential buyers may not be aware of it. Awareness is a large part of positioning. Your broker isn’t just responsible for making sure people see your property — they’re also responsible to make sure the right people see your property. In other words, you probably won’t succeed if you just drop a “For Sale” sign on your property or list it online and wait for a sale to happen. Your broker should have a vision of your ideal buyer, and use their sphere of influence to ensure they know about your property. Brokerages like Cushman & Wakefield | Commercial Property Southwest Florida have relationships in every sector of the commercial real estate market and are ready to position your property for maximum exposure to its most likely buyers. The property isn’t in ideal condition. Regardless of whether you’re selling property or land, the condition of your property is vital, and not just because you want to make a good first impression. The only reason people buy investment property is because they believe it will be worth more in the future than it is today. If an investor believes they’ll need to make a large capital infusion in your property to make it profitable, they’re likely to pass on it. To prevent buyers from worrying about your property’s condition, you need to show it in the best condition possible for its market. While this may produce short-term expenses, it will also reduce the investment risk for buyers. Property investors will recognize its long-term potential for higher lease rates and lower capital expenditures, increasing your market demand and likely offsetting your costs. You’re not truly motivated to sell. Real estate brokers define a “good listing” as one with a motivated seller. Ask yourself why you want to sell, and how important it is for you to rid yourself of this property. Perhaps you’re selling because of a life change, a new opportunity, a tax-efficiency strategy, a need for renovation, or even just a hunch that the market is about to take a turn. The level of a seller’s motivation is often closely tied to the ease a broker has in listing and selling a property. This is where the conversation between broker and seller can get uncomfortable. If it’s important for you to sell quickly and break free from the property, you may need to be more flexible. Determined sellers are often more willing to negotiate on price and more flexible in the sale terms they offer. They understand the fluidity of the market and are prepared to listen to the advice of their broker. If you’re not motivated to sell your property quickly, consider why you want to sell your property at all. You may want to consider another strategy. Full service commercial real estate agencies like Cushman & Wakefield | Commercial Property Southwest Florida have experience in leasing, property management, facility maintenance, and financing, and can help you determine the best tactics for producing revenue from your commercial property. Whether it’s time for you to sell, or you’re just considering your options in our current commercial real estate market, the commercial property experts at Cushman & Wakefield | Commercial Property Southwest Florida have the knowledge, data, and resources to determine the best strategy for you. Contact us by calling 239-489-3600 or contact-us.

By Gary Tasman Do you remember your first mobile phone? Perhaps it was a 1980s car phone, a 1990s brick phone, or a flip phone from the early 2000s. Several generations of mobile technology preceded today’s smart devices, and each advancement in tech followed a revolution in how mobile networks operate. Today, we’re on the cusp of another revolution: 5G. Simply put, 5G is the 5 th Generation of mobile networking technology. Over just a few short decades, wireless tech has evolved from basic analog audio to the incorporation of digital voice, texting, web access, and mobile streaming. 5G is poised to bring innumerate improvements to mobile networking—many of which have yet to be invented. 5G won’t just change the way we use our phones and mobile devices. This new technology promises to change our workplaces, as well as the way we design, market, and monetize commercial property. While it may seem like we’ve been hearing predictions about 5G for years, the first 5G-enabled iPhone just hit the market in October 2020. Currently 60 major cities in the U.S. have 5G Ultra Wideband access, which offers ultra-fast networking speeds. These cities include Miami, Sarasota, St. Petersburg, and Tampa. Many other areas, like parts of Southwest Florida, offer 5G Nationwide access, which is closer in speed to 4G and promises to improve. But the number of locations with Ultra Wideband is also expanding, meaning more potential for all of us to experience the immersive networking experiences that 5G boasts. The 5G revolution comes at a perfect time. More Americans than ever are working remotely and discovering both the potential of remote work as well as the challenges it presents. We’ve become accustomed to video conferencing with anyone at any time, and to working untethered from our desks on multiple devices. For those who will remain working from home or other off-site locations, 5G allows for faster streaming, less latency, and higher quality video. For the majority of people who will eventually return to the office, private 5G networks will permit employees the opportunity to work free of cables and bulky devices. Rather than being limited to working in certain areas that have network access ports or a strong wireless signal, staffers will be able to meet on the fly, seamlessly access real-time data from any device, and connect to network-enabled monitors, projectors, computers, and other devices with ease. With unlimited access to bandwidth and data, video conferencing and cloud-based collaboration will remain commonplace, and mobile apps will become even more powerful and interactive. As a result, close attention to 5G technology infrastructure will be key for builders and property owners when marketing their spaces. “Landlords and investors are increasingly viewing 5G as a ‘must have’ versus a ‘nice to have’ amenity,” explained Rob Franch, Cushman & Wakefield’s Chief Technology Officer. “We’ve been advising our clients to make sure they have the technology infrastructure in place to be able to enable 5G, and recently we’ve gone a step further, helping tenants optimize their space for 5G as well.” To ensure that property owners are prepared for the 5G revolution, Cushman & Wakefield is partnering with Verizon to help owners develop 5G strategies. “With high-speed connected buildings in place, owners and investors could potentially be offering premium connectivity to tenants,” said Arvin Singh, Verizon managing director of connected solutions. “Smart building enhancements like security enhancements could also lead to new offerings. These are the types of things that could change the economics of the investments you make in a traditional building, really adding long-term value.” 5G infrastructure also provides additional opportunities for property owners to monetize wireless technology expansion by leasing rooftops of their buildings and other structures for small cell towers. 5G relies not only on existing cell towers but on a network of smaller towers to transmit high-spectrum, high-frequency signals. Partnerships between carriers and building owners will be critical for the success and expansion of 5G. 5G promises to change the way we access data and communicate with others, just as earlier technology like texting and video streaming has evolved. As a builder, property owner, investor or tenant, are you ready for this next generation of wireless technology? Our team of professionals at Cushman & Wakefield |Commercial Property Southwest Florida are prepared to help you make this transition. Our local data, insight, and experience, combined with Cushman & Wakefield’s expertise and strategic partnerships can help you prepare for the 5G revolution. Contact us for a complimentary, no-obligation consultation by calling 239-489-3600 or contact-us.

By Gary Tasman We will all remember the year 2020 for innumerate reasons. The coronavirus pandemic, historic unemployment levels, a highly divisive election, and civil unrest all shared the headlines in a year none of us will soon forget. 2020 was also the year that many office employees and their employers discovered that they could complete their responsibilities remotely, as COVID-19 protocols limited face-to-face contact and emptied workplaces. Yet as our nation returns to normalcy with improved pandemic procedures, antiviral technologies and a rising vaccination rate, offices are once again filling with employees. Southwest Florida, in fact, is setting the pace for a resurgence in commercial office space. When the pandemic shut down offices across the nation, millions of jobs were lost either temporarily or permanently. In just two months during the second quarter of 2020, 2.86 million office-using jobs were lost, part of the biggest decline in the history of U.S. payroll employment. Since then, well over half of those jobs have been recovered, and Cushman & Wakefield projects that the office employment market will have fully recovered by July of this year. The pandemic push to work remotely left many people wondering if traditional offices would ever truly return once the world returned to normalcy. While the work from home trend certainly helped many organizations discover new efficiencies, some employers are rediscovering the purpose of the office. While technology has allowed business leaders to manage teams remotely, smartphones, notebook computers and virtual meetings have not been able to simulate other benefits of working in an office environment. While many remote employees were productive in their duties, a 2020 Cushman & Wakefield survey found half of U.S. employees who worked from home during the pandemic struggled to feel connected to their company culture, and more than one-third felt like they weren’t learning while working remotely. As a result, the purpose of today’s resurging offices has shifted away from traditional management command and control and towards innovation, knowledge-sharing, and productivity, as well as creating social and cultural connections. What does this mean for the commercial property market? Office properties are suddenly hot again. While construction ground to a halt during the pandemic, the demand for office space has continued to build. Southwest Florida currently has the hottest office market in the entire state. While Tampa and Miami currently have office vacancy rates over 15%, more than 91% of Southwest Florida offices are filled with tenants—tops in the state. And although office rents have increased in our region, our average rent of $19.34 per square foot is dwarfed by Orlando’s $24.36 and Tampa’s $29.00 average, and completely overshadowed by Miami’s average asking rent of $41.48. Southwest Florida’s relatively low rent and vacancy rates have created a landlord-friendly market which will continue to boom as the economy improves. With no large-scale speculative office projects under construction in our area, the demand for office space will continue. New businesses are already eyeing our region favorably in terms of cost, and our area’s rapid population growth over the last year will provide more available employees for companies relocating to– or expanding in– Southwest Florida. While many people and businesses are still struggling to recover from the economic downturn, Southwest Florida’s office sector has been somewhat insulated from the worst of the impact. The commercial office property market is one indication of how our region can thrive in the face of adversity. Property owners with available office space are in a prime position to take advantage of this recovery. The professionals at Cushman & Wakefield | Commercial Property Southwest Florida are available to help you understand the value of your office property and how you can position it for sale or lease in this exciting market. Contact us at info@cpswfl.com&lt, call 239-489-3600 or contact-us.