JACKSONVILLE, FL - A study recently conducted by the University of Florida found there is a growing number of "For Rent" signs on retail, office, industrial and apartment properties in Florida as the foreclosure crisis has spread into the rental market. "If our survey respondents were physicians, they would be telling us that Florida's condominium markets and some single-family development markets have pneumonia and Florida's rental real estate markets have the flu," said Wayne Archer, director of UF's Bergstrom Center for Real Estate Studies.
"That is to say the condominium markets and some single-family development markets are very sick and there may be causalities. Meanwhile, rental markets - apartments, industrial, office and retail will suffer varying degrees of pain and discomfort in the months ahead, but it will pass and they will recover."
The quarterly study was based not on actual statistical occupancy rate data, but the direction in which 275 respondents from around the state, including 34 in Jacksonville, expect the market to take.
Archer said the biggest surprise is the downturn in the apartment market, which he said could be caused by people trying to save money by doubling up and sharing accommodations with roommates, reducing demand for apartments. In the retail market, there are fewer firms going into business, coupled with others consolidating operations or closing shop.
Jacksonville respondents had mixed opinions about future occupancy rates, expecting higher rates in apartments and lower in flex space, large retail and free-standing space. They expect rental rates to increase slower than inflation in most property types except Class B office. Future absorption rates are expected to decrease in local condominium development. At 10.27 percent, required yields, or the rate of earnings from an investment, are, on average, lower than the state's 11.61 percent and decreased in all but one property type in the second quarter.
Source: Jacksonville Business Journal