"In general, our market has been holding its own," observes John Harshman, president of Harshman & Co. Inc. and a veteran commercial real estate broker in Sarasota. "We seem to have consistent demand by the same types of businesses we're used to seeing."
While the Sarasota metropolitan area is being affected by factors common to many office markets, such as sublease availability from mortgage firms, much of that space has been absorbed by financial services companies and law firms, both which maintain a strong presence in urban centers, Harshman says.
"We've had a very tight office market Downtown," he says, pointing out that only one new building has opened in the last two years, the 10-story Courthouse Centre containing 90,000 sf.
Unemployment and housing are creating uncertainty in the office sector in the early stages of 2008. While Sarasota's jobless rate has customarily ranged below 3% in recent years, it ended 2007 at 4.7%, identical to most other areas of Southwest Florida and even with state and national averages.
Asking rents for Sarasota office space remained stable over the past year at $23 per sf overall, while rising slightly for class A space to $25.75 per sf, according to Colliers Arnold.
The market's highest rental rate, just above $40 per sf, was sought late last year at One Sarasota Tower, a 12-story office building Downtown. However, current rents have been adjusted to around $35 per sf to reflect more efficient operating costs, according to the building's owner.
"We're right in the market for class A buildings," says Earl Fossum, VP of property management for Icorr Properties International in Sarasota. He points out that the 151,000-sf building's asking rent is a gross rate and reflects its prime waterfront location, along with its current 91% occupancy.
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